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Title: Contracting sustainable and responsible energy investment : trends, actors and grass-roots innovations for multi-level governance
Author: Yang, Chung-Han
ISNI:       0000 0004 7972 9098
Awarding Body: University of Cambridge
Current Institution: University of Cambridge
Date of Award: 2019
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This thesis critically examines various contractual mechanisms by which the protection of foreign direct investment (FDI) in the energy sector is reconciled with other values of sustainable development through a 'State-Investor-Population (S-I-P) Triangle' lens. FDI is a major engine of the world's economy. Both the UN's 2015 Addis Ababa Action Agenda and the 2030 Agenda for Sustainable Development call for FDI to serve as an essential financing element of sustainability efforts. However, because of the invasive nature and massive scale of cross-boundary business operations, FDI investment projects in the extractive industries are prone to have significant impacts on human rights and our natural environment. Current research in this fast-changing field mainly concentrates on international investment treaties, national regulations, and relevant energy dispute case-law. By contrast, project-specific contractual and quasi-contractual instruments have received far less attention despite their potential importance as components of a broader framework of global energy governance. These instruments are, in many ways, beyond the radar of most academics researching this field. This thesis seeks to address this research gap. It relies on fresh data sets compiled for this specific purpose and includes three primary forms of contracts, namely State-investor investment contracts ('S-I' contracts), Corporate-NGO partnerships/agreements ('I-P' contracts), and multi-actor (tripartite) investment contracts ('S-I-P' contracts), within and even beyond the S-I-P Triangle. Based on a research methodology combining socio-legal approaches and doctrinal analysis, the research conducted for this dissertation leads to three main findings: Firstly, contemporary legal frameworks for regulating international energy investment are fragmented and imbalanced (in favour of foreign investors). Recent global resistances and increasing investment disputes have also demonstrated that the conflicts between investment protection and other public policy goals - e.g. environmental protection, public health and labour rights - are becoming a key concern for energy investment projects. Thus, despite some limitations, private contractual arrangements can be a useful vehicle to prevent environmental and social damages, complement the fragmented regulatory frameworks, and enhance multi-level energy governance. Secondly, by examining the datasets of various bilateral and multilateral contracts, this research re-classified current contractual mechanisms as 'soft contracts', 'enforcement contracts', and 'innovative contracts'. Original conceptual charts have been developed to capture the changing landscape of the targeted legal phenomena, and this thesis argues that contracts, especially 'innovative contracts', play a central role in energy governance and regulatory innovation. In the context of economic globalisation and community resistance, the thesis identifies three key driving actors behind the contracting practices, namely multi-national corporations, non-governmental organisations, and commercial lawyers, and this thesis suggests that these three change agents would be well placed to use these contractual arrangements as a technology to stimulate, guide and sustain environment-driven societal change and regulatory innovation. Thirdly, the thesis uses China's outbound FDI in the energy sector as an in-depth case study to test the conceptual cartography proposed. It is clear from the Chinese case that the current 'top-down' regulatory and policy developments led by the Chinese government and other international institutions are still insufficient and may face challenges of efficient implementation. The operations of China's overseas hydropower and extractive industries illustrate that grassroots resistance can be a crucial catalyst to stimulate "bottom-up" legal innovations and strengthen the existing regulatory frameworks. Through a better understanding and management of the drivers of such resistance, Chinese overseas investment may achieve a better alignment of the different interests involved. Also, this offers China a chance to be at the forefront of the new approaches analysed in this thesis. The conclusion provides summaries of the main empirical research findings, arguments and their implications for both theoretical discussions and practical policy-making. Some recommendations for further research have also been addressed.
Supervisor: Vinuales, Jorge E. Sponsor: Ministry of Education ; Taiwan (R.O.C.)
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
Keywords: FDI ; Energy Investment ; Investment Contract ; NGO-Business Partnerships ; Multi-level Governance ; China