Protection of Environment in the Practice of International Center for Settlement of Investment Disputes

The desire of states for economic development on the one hand and maintaining a healthy environment, on the other, raises the issue of conflict between the economy and the environment. States have concluded many treaties to protect the environment, as well as many treaties to support foreign investment. These two legal systems have caused a conflict of interest in the development of countries. To determine the position of environmental protection against the economic interests of foreign investors, it is necessary to examine the international precedent. One of the most important practices in which the conflict between the two can be observed is the precedent of the International Center for Settlement of Investment Disputes (ICSID), which deals with disagreements between foreign investors and the host states in a specialized manner. Therefore, the main question is that in the arbitration precedent of the foreign investment center, to what extent the environment has been protected against the interests of foreign investors? The hypothesis is that ICSID, as an investment authority, takes side with foreign investors in this conflict. However, the descriptive-analytical study showed that inspite of the ICSID background i.e. the cases of Metalclad Corp. and Compañiá de Aguas del Aconquija S.A. and Vivendi Universal S.A. in which investors received priority in their conflict with environmental promoters, in recent cases the ICSID showed preference towards the environmental aspects. This change of precedent showed itself in two cases i.e. Compañía Del Desarrollo De Santa Elena, S.A. Pac Rim Cayman LLC. However, ICSID has determined the compensation for the benefit of the investor for the losses caused by the stoppage of investment, so that a part of the expected benefits of the investor is also compensated reconciling the two sides.