Home Articles posted by Güneş Ünüvar

From Protection to Governance of Foreign Investment: Vulnerability Theory as a Paradigm Shift in International Investment Law

Published on December 27, 2019        Author:  and



The international investment law (IIL) regime is experiencing a series of paradigm shifts in light of ongoing backlash against its alleged lack of interest in public concerns. Increasingly, ‘external’ stakeholders such as NGOs, locals or indigenous peoples adversely affected by the activities of a foreign investor (or the excessive protection and incentives extended to a foreign investor by the host state) are therefore given a voice in arbitral disputes and the public debates surrounding them. While foreign investors virtually never have any international obligations pursuant to international investment agreements (IIAs), there is already a significant shift towards carve-outs, policy exceptions, and provisions safeguarding the regulatory powers of states against the (excessive) limitations imposed upon them by arbitral interpretations that disproportionately favor foreign investors. A plethora of discussions have touched upon the shape of such extra-legal (or extra-economic) considerations – such as human rights, environment, and sustainable development – that might come into play in order to transform IIL into a social justice regime, responsive and reflexive of the injustices suffered by all stakeholders (Baetens, 2013; Linarelli et al., 2018; Arcuri and Montanaro, 2018). Yet, no reform proposal has realistically advocated for a raison d’être shift in IIL.

This contribution seeks to add to the existing strand of scholarship by doing precisely that, via the application of Martha Fineman’s ‘vulnerability theory’ to the IIL context (Fineman, 2008; 2017). Specifically, it elaborates on the theory’s potential for solving some of the long-standing conundrums in IIL, such as its selective protection of certain subjects of law (foreign investors), its formalistic approach to equality embodied in the ‘sameness of treatment’ principle, and its unhelpful designation of interested ‘groups’. Read the rest of this entry…