Balancing Needs and Legal Obligations
THE AUTHORS:
Niharika Raizada, Director I/C, SCLML, at the Rashtriya Raksha University
Harshit Singh, Research Officer, Vice Chancellor’s Office at the Rashtriya Raksha University
An unsettled conflict between the protection of the environment and the rights of investors is increasingly gathering importance, more so with the ongoing race towards ‘green’ economic development. Central to this debate is the Human Right to Water and Sanitation (“HRWS”), which is increasingly under pressure from investor-state relations and global trade agreements. For instance, recent developments provide evidence of how such trade treaties can restrain countries from fulfilling their responsibilities of protecting their water resources, which further complicates the equilibrium between environmental responsibilities and investors’ entitlement.
The Emergence of Human Rights to Water and Sanitation
In recent years, the HRWS has garnered considerable attention, with numerous international treaties and documents affirming its significance. The journey commenced in 1979, with the Convention on the Elimination of All Forms of Discrimination against Women (“CEDAW”). This convention included the right to water, as a component of adequate standards of living, and so initiated the right to water advocacy.
This was succeeded by General Comment No. 15 issued by the Committee on Economic, Social and Cultural Rights in 2002, which underlined the importance of HRWS as part of the international human rights law. In 2010, the United Nations General Assembly (“UNGA”) incorporated the HRWS into its Resolution 64/292 adopted on 3 August of that year and described access to safe and clean water as a basic human right which is, in fact, necessary for the full enjoyment of life. After that, many other resolutions have reiterated that these rights are crucial for a decent standard of living.
Yet, the main issue remains their implementation. These are accepted in the international arena. Ultimately, it depends on the laws existing in each country. This means that states have the onus of compliance and therefore must pass appropriate laws, secure and implement the HRWS using appropriate administrative options, budgets and policies.
Investor-State Dispute Settlement (“ISDS”) Mechanisms and Environmental Constraints
An inherent contradiction often arises between protecting the environment and safeguarding the investor whenever such situations are looked at in the backdrop of the ISDS mechanisms. These mechanisms are usually included in most international trade and investment treaty regimes, providing measures to allow investors to sue states over policies that are deemed to threaten their profitability. In cases regarding HRWS, for instance, such ISDS mechanisms would prevent governments from formulating and implementing policies aimed at protecting water rights or water resources.
Argentina is another country which embodies this paradox. Following its economic collapse in the period from 1998 to 2002, strategies were implemented towards affordable water provision in the country. However, many investors filed ISDS suits against the government of Argentina claiming that they suffered losses as a result of these strategies. The Tribunals settling these disputes had different attitudes. At some point, they disregarded Argentina’s concerns about the HRWS entirely. They issued directives requiring Argentina to balance its commitments to the investors and its HRWS obligations. Cases like Azurix v. Argentina (I) and Vivendi v. Argentina (I) illustrate how ISDS can be abused to circumvent environmental protections. In the end, it restricts the course of action that the countries can employ towards the preservation of the HRWS.
Barriers to Advancing HRWS in International Law
It has to be borne in mind that one of the difficulties that the HRWS faces, is the imbalance between the HRWS obligations and the policy legal framework introduced by international trade law. Many scholars in the respective fields have argued that such pacts tend to convert water into property for the gain of the investors as opposed to giving it recognition as a basic human right. This shift in the understanding of water resources can have the effect of weakening HRWS. Instead of viewing water as an irreplaceable component of human existence that deserves legal protection as a human right, it is now viewed as a product that can be bought or sold and therefore governed by rules of trade and investment.
This redefinition, motivated by structural economic incentives, may discourage governments from implementing water conservation policies or ensuring the availability of clean water for the local population. For example, cases of ISDS allow corporations to object to government action in enforcing policies on environmental conservation that they allege violate their rights as foreign investors. This creates a legal environment in which countries are forced to strike a precarious balance, as the defence of HRWS may entail compensation to the investors, thus threatening the financial viability of the country.
The Role of Domestic Legislation in Advancing HRWS
It is correct that international law provides an essential structure, but the responsibility for the realisation of the HRWS mainly lies with domestic law. Consequently, to effectively promote HRWS, it is crucial that states take actions such as enacting laws primarily designed to conserve water, implementing systems that prioritise access to and quality of water for the country’s population over all investors and profit-making policies.
This is evident, for example, in countries where the government has implemented controls on industries that either dispose of wastewater or protect the water. Still, these controls can be abused with ISDS when foreign investors claim that such environmental legislation affects their earnings. Thus, the legal responsibility to protect HRWS makes it so that states are not merely expected to enact laws aimed at protecting the environment but also enter trade agreements in a manner that enables them to give such laws priority without attracting compensation for losses.
Potential Solutions and Recommendations
The reform of ISDS provisions is crucial in ensuring that the obligations of investors are in line with the concerns for the environment. One suggested reform is to provide a limited scope of applicability of ISDS with respect to HRWS or critical environmental resources. By explicitly defining HRWS as exceptions in trade treaties, it is possible for states to put in place important measures for environmental conservation without risk of being attacked by investors seeking to impose such treaties.
Furthermore, social environmental conflict resolution mechanisms may be devised by the states. In the case of investment agreements, including an Environmental Impact Assessment (“EIA”) in the projects to be funded helps to broaden the debate in cases of conflicts regarding the state’s obligations to its people and their surroundings.
A Way Forward: Prioritizing Environmental Protection
The mounting recognition of environmental sustainability as an essential human right emphasizes the imperative for states to consider environmental protection even in the face of investor rights. On the other hand, however, countries should be careful because investor rights may turn out to be a hindrance to environmental protection. Non-governmental organizations like the United Nations should take up a more active position, calling on countries to embed HRWS in their provisions on commercial treaties, so that a coherent approach to addressing these competing interests can be developed.
In crafting domestic policies, it is advisable to adapt and adopt community-based frameworks of water resource management, which will allow the communities affected to participate and even influence the policies on water. Such an approach helps to develop a more holistic strategy towards the HRWS by encouraging people’s participation, which strengthens the argument that access to water is a right for all as opposed to a resource that is available in any market.
The interface between environmentalism and protection of investors’ rights is one of the most pressing issues in international law, as showcased by the situations in Argentina. HRWS must be prioritised and incorporated into investment agreements to enable countries to implement environmental protections without fearing economic losses. This way, by reformulating the mechanisms of Investor-State Dispute Settlement, enhancing the existing laws at the national level, and promoting public involvement in the management of water resources, the countries will be able to strike a better balance between the expectations of the investors and the right to access clean and safe water.
Conclusion
To conclude, the balancing of the rights of investors and environmental protection is a complex and, nonetheless, important problem of international law. The case of Argentina illustrates the challenges states face in implementing ISDS mechanisms while respecting the Human Right to Water and Sanitation. By placing an emphasis on the HRWS in trade agreements, and reconsidering the ISDS provisions, the states can protect water without incurring severe economic losses. Also, national laws, together with participatory and inclusive water governance, can enhance the realisation of the human right to water and sanitation, regarding water as a basic need for preserving people’s dignity and promoting development. As more countries around the world recognize the right to a healthy environment as a human right, it is necessary for us to strengthen our efforts to reform the existing legal regimes to promote economic development as well as environmental protection.
ABOUT THE AUTHORS
Dr. Niharika Raizada is an Assistant Professor of Law at the School of Criminal Law and Military Law, Rashtriya Raksha University, Gandhinagar. She recently completed her Ph.D. at Gujarat National Law University, following an LL.M. in Criminal Law from Sardar Patel University of Police, Jodhpur. Holding a BBA LL.B. (Honours) degree from Amity University, Lucknow, she earned her undergraduate degree with a merit scholarship.
Her research focuses on cyber law, data privacy, and healthcare security, with publications in Scopus-indexed journals on topics like personal health data protection and cyber threats in healthcare. Passionate about the intersection of technology and law, she also actively engages in faculty development programs and academic collaborations.
Harshit Singh is a Research Officer, Vice Chancellor’s Office, at Rashtriya Raksha University. He is a Gold Medalist with an LL.M. in Criminal & Security Laws from Rashtriya Raksha University.
During his time at Symbiosis Law School, Hyderabad, he held the position of President for the academic year 2021–2022. His core of research are Financial and Economic Laws.
*The views and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect.
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