Investment Treaty Law and Matters of Recognition: Locating the Concerns of Local Communities

Abstract

This article reconsiders the political economy of investment treaty law. It starts by focusing on the broad consensus of investors, capital-exporting and capital-importing countries, and international organizations. These constituencies diverge over matters of distribution and, to certain extent, representation. Yet, they likely agree on matters of recognition. They see many regions and local communities simply as backward or traditional. Foreign investment gets represented as a road towards modernization. However, many of the local communities disagree. Locals are not systematically opposed to investment. Rather, they are likely to have legitimate concerns beyond those of the usual constituencies of investment treaty law. They want local institutions by which to articulate their positions, and they want investment projects to be embedded within local culture and traditions. Matters of recognition complicate the job of arbitrators, calling into question whether investor-State dispute settlement (ISDS) is an appropriate mechanism to govern foreign investment involving local communities.