14 January 2021

Interpreting the standard-setting obligations of the state through the lens of sovereignty

In her PhD thesis in International Law, Eda Cosar Demirkol argues that state sovereignty, as conceptualised in the modern international legal context, may assist in the interpretation of standard-setting obligations of the state by way of necessary implication. To demonstrate her argument, she takes a critical look at the recent trends in investment treaty-making practice and the expanding scholarship on standard of review approaches in international investment law.

Why did you decide to focus your PhD thesis on the interaction of international standard-setting obligations and state sovereignty?

It was mainly the recent trends in investment treaty-making practice and the expanding scholarship on deferential standard of review approaches that actually led me to reflect on the nature and interpretation of standard-setting obligations. I have always been sceptical about standard of review approaches as these approaches seek to accommodate the state’s right (and sometimes duty) to act in the public interest in the adjudication of investment disputes by reference to investment treaty tribunals’ powers or some other systemic features. These approaches do not look into what the content of investment treaty obligations, being standard-setting in nature, actually envisages. Likewise, the recent treaty-making practice in this particular area seems to be too hasty in re-designing the entire investment treaty regime to affirm the state’s right to regulate and create so-called “exceptions” to investment treaty obligations for measures concerning particular policy areas. These recent efforts also seem to fail to take a step back and figure out what the actual content of investment treaty obligations entails. Such practice takes the state’s exercise of its sovereignty in the public interest as a matter of circumstances precluding wrongfulness or some form of an exception to state responsibility under investment treaties. Contrary to such understanding, however, I consider the question of the legality of the exercise of sovereign prerogatives under investment treaties as a matter of interpretation. My view was that investment treaty obligations somehow incorporate the consideration of the state’s sovereign duties and allow the assessment of the state’s compliance with these obligations by reference to these duties.

How do you confirm this view in your PhD thesis? 

The main purpose of my research is to propose a coherent theoretical framework for the consideration of the state’s exercise of its sovereign functions in the public interest in the assessment of the state’s liability under its standard-setting obligations, like those included in the human rights treaties and in international investment treaties. To put it more simply, in the contemporary international legal order, states are expected, more often than not, to take positive action by adopting necessary measures within their jurisdiction to achieve public policy goals, as well as to comply with their international obligations in various different policy areas, such as those under international environmental law. The exercise of the state’s sovereign functions to that end may become relevant to the way in which the state’s international obligations setting out certain standards of treatment are interpreted. My research examines on what theoretical ground the state’s sovereign functions can be taken into account in the interpretation of what I called “standard-setting obligations” of the state. My conclusion is that it is necessarily implied in the state’s standard-setting obligations that the state retains its ability to perform its sovereign duties without necessarily incurring liability in cases where the interests of the classes of persons protected under those obligations are adversely affected.

Can you give a topical example to illustrate your conclusion?

As the number of investment treaty claims involving regulatory disputes increases, sovereignty considerations have become a recurring theme in the recent literature on international investment law, and have even spawned new initiatives at the international level to reform the entire international investment protection regime that consists of a network of almost 3,000 international investment agreements. What is common in all of these discussions is the tendency to dichotomise state sovereignty and the protection of foreign investment. The measures adopted by the states in an effort to fight the topical COVID-19 crisis, which have triggered immediate discussions about potential investment treaty claims that might arise from such measures, may well illustrate the point. On the one hand, states are required under international health law to take necessary measures, including economic measures, with a view to preventing the spread of the pandemic for the protection of public health and mitigating its social and economic impacts; on the other hand, they must ensure their compliance with the obligations they owe to the investments of foreign investors under international investment treaties.

On the basis of the common assumption that the current investment treaty regime is not well-equipped to deal with this allegedly dilemmatic tension between these competing interests, some commentators see the solution in revising the substantive provisions in investment treaties to make room for the regulatory autonomy of the state, whilst others suggest the use of certain judicial techniques drawn from comparative public law for allowing some policy space to the states in the adjudication of regulatory investment disputes. My thesis challenges the very assumption that investment treaty obligations of the state do not allow much room for the sovereignty considerations to be taken into account in claims concerning state regulation in the public interest. I propose instead an interpretive approach that can inform the assessment of the state’s liability under international investment treaties for the measures adopted in pursuit of its legitimate policy objectives.

What are you doing now?

I have been working as a lawyer within the London-based international dispute resolution group of a US law firm for the last two years. Having now received my PhD degree, I am also planning to teach a course on international dispute settlement next semester as a visiting lecturer at my home university in Istanbul.

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Eda Cosar Demirkol defended her PhD thesis in International Law in November 2020. Professor Marcelo Kohen presided the committee, which included Professor Zachary Douglas, supervisor, and Dr Martins Paparinskis, Reader in Public International Law, Faculty of Laws, University College London (UCL).

Full citation of the PhD thesis
Cosar Demirkol, Eda. “A Theory of Interpretation of International Obligations of the State: Sovereignty as Necessary Implication.” PhD thesis, Graduate Institute of International and Development Studies, Geneva, 2020.
For access, please contact Dr Cosar Demirkol.

Banner picture: excerpt from an image by THINK A/
Interview by Nathalie Tanner, Research Office.