New Study of FDI and Human Rights

The International Finance Corporation (IFC) and the United Nations Secretary-General’s Special Representative on Business and Human Rights (SRSG), Professor John Ruggie of Harvard University, released a draft of the research paper they commissioned on foreign direct investment and human rights.  The paper focuses on stabilization clauses, designed to facilitate stability in the regulatory environment for investment contracts with foreign states.

As the press releast summarizes, "the study found that stabilization clauses are sometimes drafted so as to insulate investors from having to implement new environmental and social laws, or to provide investors with an opportunity to be compensated for compliance with such laws.  The sample of contracts gathered for this study showed that this was more likely to be the case in the contracts from countries outside OECD than in OECD country contracts."

   -TG