Conflicts And Their Avoidance In The Area Of Environmental Regulation And Investment Protection Under NAFTA-An Analysis Of The Expropriation Clause

Chapter 11 of NAFTA provides a comprehensive series of rights for investors of one NAFTA Party by investment protection provisions. In the longer run, however, the operation of the investment protection provisions of Chapter 11 of NAFTA went beyond Parties'expectation, and challenges the sovereignty of host states. The controversy focuses on whether the environmental measure stipulated by the host state constitutes a compensable taking. This article focuses mainly on conflicts between investor rights guaranteed by NAFTA and the right and obligation of governments to enact legislation and regulations designed to protect the human environment. With analysis of the provisions of NAFTA, the judicial practice of tribunals under Chapter 11 of NAFTA and other applicable sources of international law, the article put forward how to solve the problem of the conflicts between environmental regulation and investment protection.Chapter One mainly introduces the background of the conflicts between environmental regulation and investment protection, including analyzing the emergence and reasons of the conflicts, and then seeks to the nature of the problem.Chapter Two clarifies the NAFTA Parties'opinions on the problem of environmental regulation and investment protection by analyzing the provisions of NAFTA, the judicial practice of tribunals under Chapter 11 of NAFTA, and indicates that Chapter 11 of NAFTA doesn't clarify the conflict of environmental regulation and investment protection.Chapter Three tries to settle the conflict by the other applicable sources of international law. Under this chapter the author analyses the application of police power under international law and put forwards three standards to distinguish non-compensable regulation and compensable expropriation. In addition, the author also introduces the new development on the problem of BIT models of the U.S. The future tribunals under Chapter 11 of NAFTA may draw on the elements mentioned above.Chapter Four concerns the potential conflicts between environmental regulation and investment protection confronted by China and puts forward a few of suggestion.