International Investment Policies and Public Health
This IIA Issues Note looks at public health provisions in international investment agreements (IIAs) and investor-State arbitration cases related to public health.
Public health is increasingly important for national and international investment policymaking. The COVID-19 pandemic highlights the importance of reforming IIAs to balance investment promotion and protection with regulatory flexibility to respond to today’s challenges.
Old-generation IIAs do not explicitly make room for regulatory action in the public interest, including for the protection of public health. New-generation IIAs fare significantly better in acknowledging public health as a regulatory objective. This underlines the urgency to accelerate holistic treaty reform towards a more balanced investment treaty regime.
In total, at least 33 known investor-State dispute settlement (ISDS) cases directly related to public health have been initiated against developed and developing countries. These cases cover a variety of issues and their link to public health may arise from the investment itself, the regulatory action taken by the defendant as well as the arguments raised by both parties. Investors most frequently relied on the fair and equitable (FET) and indirect expropriation standards.
Holistic reform of old-generation IIAs is needed to safeguard the right to regulate in all public policy areas. Protecting regulatory space with respect to specific objectives is important but falls short of meeting the future needs of the international investment regime. Emerging concerns relating to climate for example, require an innovative and comprehensive reassessment of the concept of State regulation in IIAs.