The lack of investor accountability in Investor-State Dispute Settlement (‘ISDS’) has resulted in many instances of errant foreign investors taking advantage of the lax domestic laws and weak regulatory environments of the Host States in which they invest. From egregious violations of human rights to flagrant disregard for environmental considerations, many foreign investors have become a scourge to local communities – one for which locals have no effective panacea.
While the rights of foreign investors are extensive, the limits to foreign investor behaviour are few and far between. The sovereign right of Host States to regulate are anxiously constrained, but investors are given free rein to operate in any manner which they deem fit.
This article highlights the current lack of investor responsibility in ISDS and the impact which ensues. Based on a variety of primary and secondary sources, it proposes several possible solutions for the way forward.