Stabilization Clauses and Human Rights [PDF]
72 pages | © May 2009 IFC | Complimentary
The purpose of this study is to examine whether stabilization clauses, a widely used risk-management device in investment contracts, may affect a state's action to implement its international human rights obligations. Specifically, this study examined whether stabilization clauses can limit the application of new social and environmental regulations to investment activities over the life of the investment, or to obtain compensation from host states for the costs of compliance with such new laws. This study used social and environmental laws (such as nondiscrimination, health and safety, labor and employment rights, and the protection of the environment and cultural heritage) as a surrogate for human rights obligations, because social and environmental laws (labor and employment, nondiscrimination, health and safety, environment, protection of culturally significant property, and the like) are some of the more easily identifiable legislative areas that can both protect rights and impact investors.
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