In order to achieve the SDGs, a substantial amount of investment is required. Foreign direct investment (FDI) has a potential to contribute to realising the SDGs, e.g. by investing in renewable energy projects needed for the transition to a low carbon economy, or by developing water and sewage infrastructure in cities. FDI can also have the objective to create green infrastructure, such as reforestation projects or restoring coral reefs. Investments in the field of natural resources and land development need to be tailored very careful, taking into account the vulnerability of ecosystems and the livelihood of local inhabitants.
The international legal regime is to ensure that FDI supports the SDGs goals of host states, and at the same time continues to protect foreign investors against arbitrary treatment by such host states. This tension is precisely the central subject of discussion in the panel session ‘Towards Realisation of SDGs on the National Level: Challenges posed by International Investment Law,’ organised by Nyenrode Business University with the cooperation of the Dutch Ministry of Foreign Affairs. Host states have to deal with these tensions every day when they wish to change their laws or policies, or have to decide about the continuation of a licence held by a foreign investor. Careful treaty drafting is one aspect, careful policy-making is a second aspect and careful investment-planning and implementation constitutes a third aspect. The panel will be discussing the question of policy coherence between complying with international investment law and implementing the SDGs.
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