Givings and ISDS
Foreign investment is associated with efficiency, economic growth, and jobs. Investors emphasize the benefits of potential projects, but also ask for regulatory givings to ensure economic returns and to minimize their exposure to host-country risks. At times, international organizations have likewise highlighted both the benefits of foreign investment and the importance of incentives to attract new projects. If states were to implement these business-friendly regulations, investors might then come in, but many would count on investment treaties and ISDS to interpret and enforce sectoral regulation, representations, or specific commitments. Disputes related to the 2001 Argentine crisis and the Spanish solar energy industry show that in such circumstances, when a controversy leads to ISDS cases, arbitrators often put foreign investment relations within a transactional model, making regulatory reforms more difficult if projects fail, local expectations are disappointed, or circumstances drastically change.