Elgar International Investment Law series
Chapter 1: Introduction. The social and legal context
On a weekly basis, international news reports cases of local populations struggling against the activities of foreign companies that are reputed to endanger both the health and environment of local populations. For many years, ecologists, politicians and economists have been highlighting the harmful spillovers of foreign direct investments, both in terms of pollution and the over-exploitation of natural resources, in particular when they are located in developing countries. Warnings have also underlined the contribution of such overspills to major global concerns, such as climate change and loss of biodiversity as well as sea and atmospheric pollution. Negative spillovers arising from the activities of transnational corporations are part of the broader theme of the undesirable effects of globalization. Arguably, global and local environmental concerns are due not only to the consequences of foreign investments, but also to various actors belonging to a host state (not only national enterprises, state-owned companies, but also families and consumers). Nevertheless, the reach of foreign investments is growing rapidly worldwide, and in many developing countries – where major environmental resources are concentrated – these investments represent the bulk of large-size economic activities. Moreover, the notion of foreign investment itself has assumed a far-reaching scope, according to prevalent legal rules on both the national and international level.