Trends, Challenges, and Implications for Vietnam

PHAM Xuan Phong

Abstract

The distressing state of climate change has compelled nations to take urgent action in combating ecological crises. However, realizing these commitments is far from straightforward, as many countries face significant hurdles that could lead to violations of their international obligations, especially in the protection of foreign direct investment. Therefore, it is crucial to take a step back and examine the challenges in simultaneously protecting the environment against climate change and facilitating investment. This paper will explore the complexities arising from the friction between the Investor-State Dispute Settlement (ISDS) regime and climate change policies by delving into some prominent cases in the period of 2015 to 2024. It underscores the institutional deficiencies of the current regime while explaining the fragmentation in tribunals’ approach to resolving these disputes. These analyses are pertinent to Vietnam because of its position as an investment hub in the region and an active player in promoting climate-friendly economic growth. The study finds that Vietnam should adopt a consistent approach to environmental and climate change governance and play a more proactive role in international discussions. This would help Vietnam avoid facing multiple arbitration claims and strengthen its investment environment.
   
Keywords: Investor-State dispute settlement, environmental policies, climate change, international climate change law, international investment agreements (IIA).

Résumé

La situation préoccupante du changement climatique a contraint les nations à agir d’urgence pour lutter contre les crises écologiques. Cependant, la réalisation de ces engagements est loin d’être simple, car de nombreux pays font face à des obstacles importants qui pourraient conduire à des violations de leurs obligations internationales, notamment en matière de protection des investissements directs étrangers.. Il est donc crucial de prendre du recul et d’examiner les défis liés à la protection simultanée de l’environnement contre le changement climatique et à la facilitation de l’investissement. Cet article explore les complexités découlant des frictions entre le régime de règlement des différends entre investisseurs et États (RDIE) et les politiques de lutte contre le changement climatique en analysant quelques affaires marquantes survenues entre 2015 et 2024. Il souligne les lacunes institutionnelles du régime actuel tout en expliquant la fragmentation de l’approche des tribunaux pour résoudre ces différends.. Ces analyses sont pertinentes pour le Vietnam en raison de sa position de pôle d’investissement dans la région et un acteur actif dans la promotion d’une croissance économique respectueuse du climat. L’étude conclut que le Vietnam devrait adopter une approche cohérente en matière de gouvernance environnementale et climatique et jouer un rôle plus proactif dans les discussions internationales. Cela aiderait le Vietnam à éviter de faire face à de multiples demandes d’arbitrage et à renforcer son environnement d’investissement.
   
Mots clés: Règlement des différends entre investisseurs et États, politiques environnementales, changement climatique, droit international relatif au changement climatique, accords internationaux d’investissement (AII).

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Tensions between climate change efforts and the investment regime raise serious concerns, particularly the “regulatory chill” effect.^[1] Recent developments in the climate change law landscape and the arbitral awards have further solidified this concern. As of 2021, 185 jurisdictions have adopted climate action policies after the Paris Agreement.^[2] However, the introduction of climate change provisions in domestic law and IIAs did not offer much help^[3] to States’ defense in investment disputes as Tribunals still hold divergent views on this matter. The critical question left unanswered is why tribunals are divided in their approaches. Are the tribunals themselves the reason for the divide, or is it the nature of international investment law? This paper seeks to answers these questions by reassessing the entire international investment regime in connection with other fields of international law and exploring the tribunals’ narratives in arbitral awards. In light of these assessments, this article answers the question of what approach Vietnam, a developing country with a strong commitment to fighting climate change and adopting the best global mitigation and protection standards and practices,^[4] should take to reduce these risks. As a country that heavily relies on foreign direct investment (FDI) for economic growth, Vietnam must strike a delicate balance between climate change mitigation and obligations towards foreign investors.

Accordingly, Section 2 examines the underlying principles of international investment law (IIL) and international climate change law (ICCL) and their complex interactions. Subsequently, Section 3 walks through the twists and turns of the investment arbitration regime, focusing on how tribunals deal with environmental aspects, particularly climate change in disputes, and why tribunals are generally reluctant to adopt pro-climate approaches. Section 4 presents strategies for Vietnam to better protect itself against potential claims. Section 5 concludes.

This research primarily employs case law analysis. The cases were sourced from the UNCTAD Investment Policy Hub and limited to the period of 2015-2024 to reflect the post-Paris Agreement legal landscape. Selection was then based on one key substantive criterion: the disputed measure must be related to environmental protection or climate change. To demonstrate the widespread and systematic nature of the issue, the selection deliberately ignored the investor’s economic sector and the host state’s development level. From this initial pool, cases were categorized into a four-part typology based on the tribunal’s degree of deference to environmental concerns: (i) dismissal or non-consideration, (ii) nominal acknowledgement, (iii) substantive consideration, and (iv) determinative upholding. Five representative cases were then selected from each group for detailed analysis.

1. The interplay between international investment law and international climate change law

It is essential to first conceptualize these two areas of international law and their intrinsic connection by revisiting some fundaments of the two legal system. It answers the question of what obligations the international commitments impose on States and why foreign investors are caught up in the race of regulatory changes of the host States.

1.1. Obligations of States under the current international climate change law

International climate change law (ICCL) only became a “policy consideration” at the end of the 1980s^[5], marked by the establishment of the Intergovernmental Panel on Climate Change (IPCC) in 1988. In the following years, key instruments shaping today’s legal framework for climate change, namely the 1992 Rio Declaration on Environment and Development, the 1992 UN Framework Convention on Climate Change (UNFCCC), and the 1997 Kyoto Protocol, were formulated. The UNFCCC establishes the ultimate objective of the entire climate change regime, which is the “stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.”^[6] It did not stipulate specific obligations towards Member States, but it paved the way for further dialogues and obligations on climate change.^[7] Therefore, Soltau argues that the Convention lies “somewhere between a framework and a substantive convention, establishing more comprehensive obligations than the bare-bones form of a treaty […] yet falling short of the detailed commitments.”^[8] Subsequently, the Kyoto Protocol officially imposed obligations for countries to take actions to limit their greenhouse gas emissions,^[9] primarily focusing on the obligations of developed states.^[10]

The recent prominent instrument is the 2015 Paris Agreement, a mega climate agreement with 196 parties at the time of its signing.^[11] This is because all parties are involved^[12] to keep “the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels.”^[13] Moreover, contrary to the Kyoto Protocol, the obligations under the Paris Agreement follow a bottom-up approach instead of a top-down.^[14] The nationally determined contributions (NDC) must be progressive and reflect the highest possible ambitions considering different national circumstances.^[15]

In conclusion, under the current ICCL, countries must take all possible measures, to the best of their national development status, to combat climate change as a whole and to achieve specific goals established in international legal instruments. Accordingly, environmental policies discussed in this paper are defined as a set of rules and regulations in any form imposed by the host States in pursuit of their respective international climate change goals.

1.2. The roles of foreign direct investment in achieving climate change goals

On nations’ path to address climate change threats, FDI is a “powerful” force that cannot be overseen.^[16] The potential contributions of FDI in fighting climate change are also highlighted by academics.^[17] However, these efforts are rarely recognized in official instruments. One can hardly find any reference to the roles of the private sector, let alone foreign investment. Thus, while looking for hints of the private sector in climate change instruments, a worth mentioning case is the 2030 Agenda for Sustainable Development and its integral part, the Addis Ababa Action Agenda (“AAAA”).^[18] Under the 2030 Agenda, three key goals concerning food security, energy, and inequality between countries specifically emphasize the importance of promoting investment.^[19] In addition, target 17.5 calls for “adopting and implementing investment promotion regimes for least developed countries”.^[20] Likewise, the AAAA recognizes that “private international capital flows, particularly FDI, along with a stable international financial system, are vital complements to national development efforts” to solve sustainable development challenges.^[21] Therefore, this might be the most significant embodiment of the possible synergies between foreign investment and sustainable development, including climate change combat so far.^[22]

The limited recognition of the roles of FDI can be attributable to the nature of the legal regime itself. International investment law (IIL), at its core, is a system of agreements between countries to protect foreign investors’ expectations.^[23] Some of the key rights offered by these agreements are the prohibition of expropriation without proper compensation, fair and equitable treatment (FET), and minimum standard of treatment (MST). On the other hand, investor obligations clauses are rarely incorporated into the text of investment treaties.^[24] The system often lays stress on the interests of the investors while overlooking the interests of the host State, especially their rights to regulate. This asymmetrical approach in IIAs resulted in a preferential outcome for investors in dispute settlements.^[25] The problem was even exacerbated by the fact that ICCL was non-existent at the birth of IIL, leading to a lack of climate change regulations in the majority of IIAs. In other words, the investment regime was made to protect the foreign investors’ rights and interests, not the climate. These factors collectively create a genuine fear of costly compensation^[26] and the arbitrary outcomes^[27] following the implementation of pro-climate measures of the host States. Therefore, FDI and its legal regime might complicate the climate change battle by increasing the costs of implementing greener climate policies^[28] and limiting the possible options that governments can choose from.^[29]

The interaction between these two divergent regimes inevitably causes challenging tensions, which are best illustrated by the number of climate-related investment disputes in recent years. Until now, there has not been a universally agreed definition for this term. Markell and Ruhl define climate change litigation as “lawsuits […] that raise issues of law or fact regarding the science of climate change and climate change mitigation and adaptation efforts.”^[30] ICC refers to the term as “any dispute arising out of or concerning the effect of climate change and climate change policy, the UNFCCC, and the Paris Agreement”^[31]. UNCTAD has a different approach, in which climate-related investment disputes are cases relating to measures or sectors that are of direct relevance to climate action, divided into 3 groups: environmental cases, fossil fuels, and renewable energy cases^[32]. Based on these definitions, the author uses the term climate-related investment disputes as any dispute that arises from policy changes from the host State to protect their environment against climate change or to directly fulfill their international climate change commitments that allegedly affect the rights of investors under an IIA.

To summarize, the inevitable clash between ICCL and IIL is a major impediment to the global effort to fight climate change. Thus, before searching for any feasible solutions, it is crucial to thoroughly understand this complex relationship and identify other variables within itself.

2. The fragmentation in resolving climate-related investment disputes

Statistics point out that climate-related disputes have appeared for a while now.^[33] The notable thing is the exponential growth of such cases in recent years. Cases initiated from 2016 to 2022 were reported to be twice as many as cases initiated before October 2015.^[34] Collectively, there are at least 447 cases relating to the environment, fossil fuels, and energy transition, accounting for 37.5% of all reported cases up to 2022.^[35]

These numbers were presented to demonstrate that climate-related disputes are likely to further develop in the future and it is necessary to analyze these cases carefully. As this section unfolds, one can see the different levels of integration of climate change considerations into legal arguments. The findings will be presented in ascending levels of tribunals’ awareness of climate change aspects in the dispute, specifically (i) complete disregard, (ii) limited and biased recognition, (iii) moderate awareness, and (iv) robust application. Regardless of the outcomes, the fragmented approach of different actors in the ISDS proceedings would sadly deter the unwavering efforts of the international community.

2.1. Utter negligence of climate change concerns

First, the Tribunal in the Clayton/Bicon v. Canada case surprised the world in 2015 by rendering an award that completely disregarded environmental matters. This dispute concerned the rejection of a project to develop and operate a mining area following a decision by the Joint Review Panel, revealing the significant and adverse environmental impact on the “community core values.”^[36] This decision was ruled to be a breach of the investors’ legitimate expectations under NAFTA’s Article 1105. The award faced criticisms over the fact that the tribunal ignores wider public policy issues and does not consider the investors’ expectations relating to the goals of sustainable development, such as climate change and environmental protection. Additionally, the tribunal raised doubts about the legality of the idea of “community core values.”^[37] The Tribunal blatantly pointed out that “the mere fact that environmental regulation is involved does not make investor protection inapplicable”^[38] in an obiter dictum appeared as a “last-hour addition reacting to the dissenting opinion appended by one of the arbitrators.”^[39] In short, the deference given to investors’ expectations and the minimal standard for determining arbitrariness is taking a concerning turn, clearly moving away from the ongoing reform trends at the time.

2.2. Investor-biased approach to climate change measures

Conversely, other tribunals have shown marginal considerations for the climate. For example, the Eco Oro v. Colombia case has drawn immediate public and academic attention, igniting considerable controversy.^[40] The dispute revolves around a mining company that allegedly suffered from the ongoing delays and uncertainties in Colombia’s regulatory framework, and was forced to renounce its contract after 25 years of waiting. As a result, the investor initiated arbitral proceedings, claiming that Colombia had violated its obligations of expropriation and MST under the Canada – Colombia FTA. The Tribunal decided that Colombia’s measures did not amount to expropriation,^[41] but violated the obligation of MST.^[42] What is relevant to this paper is the tribunal’s perspectives concerning the climate exception clause and its role in the dispute. Article 2201(3) of the FTA stipulates that: “Nothing in this Agreement shall be construed to prevent a Party from adopting or enforcing […] environmental measures necessary to protect human, animal or plant life and health.”^[43] The tribunal arguably considered that this clause would not prevent the investor from claiming compensation for an allegedly breaching measure under this Chapter.^[44] The tribunal even took a step further by referring to Annex 811(2)(b) of the expropriation clause, claiming that where the treaty language unambiguously excludes certain measures from the scope of expropriation, compensation is not an option. Thus, in case Article 2201(3) took the same approach, the Tribunal would remove compensation as a remedy. In other words, it concurs that the State cannot be barred from adopting environmental measures, but this does not free the State from compensatory obligations. From their viewpoint, it is to “carefully avoid attesting primary to one over the other”^[45]. Surprisingly, the Tribunal ultimately “award[s] no damages from Colombia’s breach of Article 805, or for any remediation costs”^[46]. This award on damages indicates a significant change of attitude of the Tribunal compared to the 2021 decision, which at the time was criticized as a setback to environmental protection efforts.^[47]

2.3. Careful consideration of climate change factors

A more thoughtful approach was demonstrated in the David Avens v. Costa Rica dispute, which stems from a tourism project initiated in an environmentally sensitive area without proper permits. Following complaints from neighbors, State authorities conducted new inspections, which resulted in the complete halt of the construction site.^[48] Consequently, the claimants filed an ICSID‑administered case alleging that the inconsistent governmental decisions constituted a breach of FET and indirect expropriation of the Dominican Republic-Central America FTA (DR-CAFTA). Costa Rica also submitted a counterclaim seeking damages to restore the natural conditions at the project site. The Tribunal denied all Claimants’ claims and the Respondent’s counterclaim. To reach this decision, the Tribunal concluded that under Chapter 10 and Chapter 17 of the DR‑CAFTA the investors’ rights are subordinate to the right of the host State to ensure that the investments are carried out “in a manner sensitive to environmental concerns”^[49], noting that the states must act in a fair, non-discriminatory manner, following principles of due process.^[50] Similarly, the Tribunal took a pro-climate approach in assessing the counterclaim of the host State, finding that the DR-CAFTA provisions “implicitly imposed some obligations to investors, especially for the environmental laws of the host State.”^[51] Unfortunately, upon concluding, the Tribunal remarked that such provisions do not impose “affirmative obligations”^[52], thus failing to establish a breach of the DR-CAFTA on grounds of non-compliance with environmental obligations.^[53] Accordingly, the counterclaim was dismissed due to procedural technicality (i.e. the lack of facts in support of the alleged liability and relief sought).^[54] Despite shortcomings, the award was credited for how the Tribunal actively dealt with environmental issues in a dispute.^[55]

2.4. In-depth analysis of States’ rights to protect the environment against climate change

Finally, the two cases concerning Ecuador^[56] stand out as pieces of evidence showing the willingness to engage in climate change obligations of the Tribunal. The two cases were factually connected as the claimants were part of the same consortium.^[57] While Ecuador was concluded to violate its expropriation obligation under the BIT,^[58] the Tribunals’ handling of the climate change counterclaim was considered groundbreaking.^[59] Not only did they rule that they had jurisdiction over the counterclaims, but they also decided in favor of the State. Through an unbiased, thorough, and expert-led assessment of domestic environmental law and of instances of shortcomings of the investors, the Tribunals concluded that the investors are liable for the environmental damages, ordering the compensation of nearly 95 million USD in total to Ecuador.^[60] In both instances, environmental factors are not incorporated into the reasoning as an external aspect or as part of a forward-thinking perspective; instead, they are merely treated as a standard aspect of normal practices in the extractive industries.^[61]

To conclude, the opinions of tribunals vastly differ from one to another. Although these cases are not directly relevant to climate change obligations, they can open the door to the enforcement of investors’ climate obligations, even under domestic law, through international proceedings. While some progress is highlighted, the inconsistencies in the outcomes between these proceedings are seriously concerning.

2.5. Understanding the divergent approaches of Tribunals to climate change policies

The above analysis of awards reveals some intrinsic reasons for their disparity. The first and foremost cause is the nature of the IIL. The one-sided imposition of obligations on States^[62] accompanied by the inability to initiate legal proceedings^[63] have paralyzed host States in the defense of their climate change commitments, much less holding investors accountable for their wrongdoings. As demonstrated in the David Avens case, the investors, despite serious violations, still got away with no liability due to the flaws of the IIA. In addition, the fact that there is no international rule of stare decisis^[64] and the entire proceeding is an “atomistic and one-off”^[65] process to determine the legality of the treaty performance discourages arbitrators from carrying on an additional task of reviewing climate arguments. Second, the drafting practice of old-generation IIAs is also of considerable importance. These treaties are virtually “climate neutral or climate blind.”^[66] This lack of climate change clauses reinforces the conservative view of some Tribunals that their only task is to assess whether the host State breaches a treaty obligation.^[67] Third, some have pointed out the reluctance to get involved in environmental considerations is primarily due to inadequate knowledge of ICCL and public international law in general^[68]. However, they are not to be blamed because the majority of the arbitrators are commercial-based and their knowledge of commercial issues are much better. Finally, investment tribunals have not established intricate or uniform approaches to address normative conflicts between international investment law and other branches of international law.^[69]

In sum, these explanations are not new to the ISDS regime,^[70] but they gradually undermine the joint effort of the international community to take robust action in safeguarding the environment from harmful economic activities. More importantly, this fragmentation may intensify the backlashes aimed at the system, which is already in a worsening position.

3. Policy implications for Vietnam

Before giving any recommendations, a brief of the current legal framework of IIAs and domestic climate change law is crucial. According to UNCTAD, Vietnam is now a Member State of 92 signed IIAs (including BITs and other treaties with investment provisions), but there are only 13 IIAs (14.1%) that have environment-considered substantive obligations,^[71] let alone climate change obligations. Notably, the different level of deference in these treaties is presented in the table below.

Table 1. Summary of Vietnam’s IIAs that contain climate change aspects

IIAs	Grounds for non-compensatory expropriation	Right to regulate clause	Environmental carve-out	Other
Israel – Vietnam (2023)	✔	✔	✔
RCEP (2020)	✔
EVFTA (2019)		✔
Taiwan (China) – Vietnam BIT (2019)			✔
ASEAN – Hong Kong FTA (2017)	✔
Korea – Vietnam FTA (2015)	✔		✔
ASEAN – India FTA (2014)	✔
Turkey – Vietnam BIT (2014)	✔	✔
Morocco – Vietnam BIT (2012)				✔ (exception in Promotion and Protection Clause)
AANZFTA (2009)	✔			✔(carve-out in Conformity Assessment Procedures Chapter)
ACIA (2009)	✔
Japan – Vietnam BIT (2006)				✔(prohibition of relaxing environmental measures as investment incentives)
US – Vietnam Trade Relations Agreement (2000)				✔(prohibition of applying requirements for investment entry unless for environmental reasons)

On the other hand, Vietnam is actively pursuing the realization of climate change commitments. The Government has approved several national strategies for climate change,^[72] green growth,^[73] promotion of renewable energy,^[74] and most recently, the transition from coal to clean energy.^[75] With clear goals and deadlines, these action plans are expected to better orientate the country’s next moves in fighting climate change. Additionally, under the current framework, there are at least 42 legal documents that oversee the conduct of individuals and businesses in protecting the environment and combating climate change.^[76] In the energy sector, 3 consecutive decrees detailing the implementation of Electricity Law 2024 are the latest updates from the Government to promote renewable energy (RE).^[77]

The misalignment between robust domestic climate policies and the IIAs’ silence on similar issues places Vietnam in an alarming position of facing multiple investment disputes without the capacity to defend itself or file counterclaims. More importantly, Vietnam is considered inexperienced in ISDS cases, as it has only been the Respondent State in 13 known cases.^[78] Consequently, the critical question is how to bridge the gap between domestic and international instruments and harmonize economic growth and sustainable development. From past experiences, it is suggested that Vietnam should (i) adopt a consistent approach in climate policy implementation, and (ii) advocate for the proactive role of climate change in the IIL regime. Renegotiation or termination of climate-obsolete treaties, or introducing climate clauses in new treaties is no longer the primary agenda as this is a “daunting” legal and political task^[79] and has minimal effects. As Cotula argues, creating a system fit for climate challenges requires new perspectives, prioritizing climate needs instead of starting from the existing IIAs approach.

Hence, Vietnam should first maintain a stable, consistent, predictable climate framework to avoid triggering the violation of legitimate expectations and FET/MST obligations. In light of the current mass reform of the legal system, Vietnam should abide by Resolution No. 66-NQ/TW of the Politburo regarding innovating law-making and law enforcement in response to the Vietnam’s development demands in the new era. The Spanish Saga RE cases serve as a crucial warning not to modify their regulatory landscapes in the RE sectors too extremely, for example, unjustly retracting promised incentives or depriving investors of the necessary time to comply with new standards.^[80] Lessons from the David Avens case underscore the need for transparent and lawful investment admission procedures. Touching upon this point, the principle “environment cannot be in exchange with economic growth”^[81] should play proactive roles in preventing actions in favor of the economy but at the cost of the environment. A further note is that any policy changes should be proportionate, necessary, and directly linked to climate change mitigation. Great consideration should be given to any measures that might be perceived as “novel, sweeping, and unexpected”^[82], otherwise similar results in the case of the Netherlands’ Coal Ban Act are unavoidable.^[83] Although Vietnam has not faced a similar situation, some instances reinforce this threat. For example, the sudden drop in the feed-in-tariffs (FIT) price calculation method by half of the original price following the issuance of a new government decision^[84] can be interpreted as an unreasonable measure, backtracking from its previous commitments. Therefore, it is not an overstatement that Vietnam should be extremely cautious in changing its legal frameworks. In light of these conditions, even without clear provisions for exercising the right to regulate for environmental purposes in IIAs, it is unlikely that the Tribunal will hold a State liable for its environmental measures.

Concomitantly, Vietnam must still pay certain regard to the making of new IIAs. Needless to say, IIAs are the first instrument that the Tribunal will examine to determine the Parties’ obligation, thus having a climate-outdated system of IIAs does more harm than good. Possible solutions include the inclusion of climate-related general exceptions,^[85] specification of expropriation, FET/MST, legitimate expectation clauses,^[86] affirmation of the right to regulate for environmental purposes, and introduction of environmental conditions for the protection of investment. References can be drawn from the Israel – Vietnam FTA, which reflects some of the world’s latest treaty drafting practices. Vietnam should not remove the possibility of incorporating investors’ liabilities in case of a breach of climate obligations. Notably, these changes should be accompanied by proactive participation in the process of policy reforms. Calling for the imposition of obligations to handle climate-related cases in a just manner upon arbitrators, the universal application of the principle of systemic integration under Article 31(3)(c) of the Vienna Convention on Law of Treaties, the codification of key doctrine (i.e police power doctrine) and the recognition of the host State’s rights to counterclaim may tilt the balance in favor of States. Replacing the bedrock of IIL will open the door to a more efficient legal regime for protecting investors without the expense of the environment.

Conclusion

The study of recent climate-related investment awards is not to shy States away from adopting climate change measures. It reflects critically concerning interactions between IIL and IEL in recent times. Specifically, even if IIAs have clear climate considerations, they can still be disregarded by investment tribunals in ISDS proceedings due to the deficiencies of both frameworks, namely the skewed structure of the IIL, the absence of explicit climate provisions and the inconsiderate takings and lack of experience in climate issues of the arbitrators. As climate change continues to influence every aspect of our lives, including the cross-border flow of capital, the number of climate investment disputes will grow exponentially. Thus, immediate and urgent responses from States are required. This paper maintains that the most effective way to harmonize these two regimes is using climate imperatives as the starting point, and then finding its way into the investment regime. Consequently, it advises that Vietnam should first develop a comprehensive and reasonable domestic legal framework targeted at climate change mitigation and environmental protection. On the international scale, the country should raise its voice in discussions relating to the underlying principles of IIL such as UNCITRAL Working Group III. At the same time, it should also adopt new approaches in investment treaty drafting For example, the inclusion of exception clauses for bona fide environmental measures or compulsory pre-arbitral mediation clause should be considered. These solutions combined gradually reduce the risks of Vietnam facing climate-related arbitration case in the future. This study is limited by its case-study scope and available data, thus pointing to a need for future research. Aligning investment law with climate change law is an immediate necessity for a secure and sustainable future.

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Journal Articles

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Astapenka, Xenia. “The International Investment Regime and Climate Change Goals: Clash of the Existing Systems and Available Balancing Tools” (2023) ZEuS 311.

Berge, Tarald Laudal & Axel Berger. “Do Investor-State Dispute Settlement Cases Influence Domestic Environmental Regulation? The Role of Respondent State Bureaucratic Capacity” (2021) 12:1 JIDS 1.

Brauch, Martin Dietrich. “Climate Action Needs Investment Governance, Not Investment Protection and Arbitration” (2022) CCSI Blog 1.

Cole, Matthew A et al. “FDI and the Environment” (2017) 42:1 Annu Rev Environ Resour 465.

Demena, Binyam Afrewek & Sylvanus Kwaku Afesorgbor. “The Effect of FDI on Environmental Emissions: Evidence from a Meta-Analysis” (2020) 138 Energy Policy 111.

Di Salvatore, Lea. “Investor-State Disputes in the Fossil Fuel Industry” (2021) IISD Report 1.

Frosch, Annika & Wojciech Giemza. “Current Trends in the Investment Environmental Jurisprudence and Predictions for Investment Disputes Involving Climate Change” (2023) 20:1 TDM.

Garden, Robert. “Eco Oro v Colombia: The Brave New World of Environmental Exceptions” (2023) 38 ICSID Review 17.

Gaukrodger, David. “The Future of Investment Treaties — Possible Directions” (2021) OECD Working Papers on Int’l Inv 5, DOI: 10.1787/946c3970-en.

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Gordon, Kathryn & Joachim Pohl. “Environmental Concerns in International Investment Agreements: A Survey” (2011) OECD Working Papers on Int’l Inv.

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Ipp, An et al. “The Energy Charter Treaty, Climate Change and Clean Energy Transition: A Study of the Jurisprudence” (2022), online: https://www.climatechancounsel.com/.

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Paparinskis, Martins. “Crippling Compensation in the International Law Commission and Investor–State Arbitration” (2022) 37:1-2 ICSID Review 289.

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Sharma, Mala. “Integrating, Reconciling, and Prioritising Climate Aspirations in Investor-State Arbitration for a Sustainable Future: The Role of Different Players” (2022) 23 JWIT 746.

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Tienhaara, Kyla. “Regulatory Chill in a Warming World: The Threat to Climate Change Policy Posed by Investor-State Dispute Settlement” (2018) 7:2 TEL 229.

Unuvuar, Gunes. “A Tale of Policy Carve-Outs and General Exceptions: Eco Oro v Colombia as a Case Study” (2023) 14 JIDS 517, DOI: https://doi.org/10.1093/jnlids/idad017.

Zarsky, Lyuba. “Havens, Halos and Spaghetti: Untangling the Evidence about FDI and the Environment” (1999) OECD Proceedings 47.

Zhang, Sheng & Ni Li. “The Application of International Climate Change Law in International Investment Arbitration: Addressing the Deficiencies” (2024) ACWH (forthcoming).

News

Anh, Kim. “Tổng hợp các văn bản mới nhất về môi trường” LuatVietnam, online: https://luatvietnam.vn/.

Chính phủ. “Cam kết mạnh mẽ nhất quán của Việt Nam trong ứng phó biến đổi khí hậu” Báo Điện tử Chính phủ (21 June 2023), online: https://baochinhphu.vn/.

Chính phủ. “Việt Nam tích cực chủ động triển khai bài bản các cam kết tại COP 26” Báo Điện tử Chính phủ (1 November 2023), online: https://baochinhphu.vn/.

Heath, J Benton. “Eco Oro and the Twilight of Policy Exceptionalism” ITN (20 December 2021), online: IISD https://www.iisd.org/.

Hương, Thanh. “Doanh nghiệp năng lượng tái tạo hốt hoảng lo bị thu hồi giá FIT cao” Báo Đầu tư (23 December 2024), online: https://baodautu.vn/.

Khandrimaylo, Victoria. “Tribunal Finds Costa Rica’s Measures to Protect the Environment Did Not Breach FET or Its Expropriation Obligations under CAFTA-DR” ITN (21 December 2018), online: IISD https://www.iisd.org/.

Levine, Matthew. “Substantial Damages Awarded to Perenco for FET Breach and Expropriation; Ecuador Also Awarded Compensation under Environmental Counterclaim” ITN (17 December 2019), online: IISD https://www.iisd.org/.

Meager, Elizabeth. “Cop26 Targets Pushed Back under Threat of Being Sued” Capital Monitor (14 January 2022), online: https://www.capitalmonitor.ai/.

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