The Legal Status of Sustainable Development in International Investment Law

Abstract

Developing countries seek to achieve economic development and reduce their gap with developed countries through attracting foreign investment. Despite its positive economic effects, foreign investment entails negative consequences for the environment, human rights, public health, and employment. These latter concerns are among the core issues of sustainable development, which ensures the continuity of development and prevents its fragility. The main question of this study is whether sustainable development has a normative status in international investment law. If so, what kind of normative status does it hold? There is no consensus on this matter. Various views have been proposed, such as the absence of an independent normative status, the existence of normative status through adaptation with soft law, and its alignment with general principles of international law. This study, employing a descriptive and analytical method, and with reference to international instruments, the evolution of sustainable development, international judicial practice, international treaties, and scholarly opinions, seeks to evaluate existing theories, examine the legal status of sustainable development, critique prior theories, and propose a new theory under the title of customary rule. At present, considering international judicial practice, the growing recognition of sustainable development in international instruments related to investment matters, and the legislative changes arising from the global emphasis on this concept in domestic laws of states, including Iran, sustainable development enjoys normative status within the sources of international investment law. It has moved beyond the stage of soft law and has acquired the characteristics of a customary international rule (customary international law).