THE PRECAUTIONARY PRINCIPLE IN BILATERAL INVESTMENT TREATIES: BALANCING ENVIRONMENTAL PROTECTION AND FOREIGN DIRECT INVESTMENT
THE PRECAUTIONARY PRINCIPLE IN BILATERAL INVESTMENT TREATIES: BALANCING ENVIRONMENTAL PROTECTION AND FOREIGN DIRECT INVESTMENT Kadidja Said, PhD Candidate in International Law at Southwest University of Political Science and Law (SWUPL), Chongqing, China Download Manuscript doi.org/10.70183/lijdlr.2026.v04.249 This paper examines the integration of the precautionary principle (PP) into Bilateral Investment Treaties (BITs) as a legal mechanism for reconciling environmental protection with foreign direct investment (FDI). It traces the evolution of the PP from international environmental law, particularly the Rio Declaration, into international economic and investment law, with attention to its treatment in the European Union and the World Trade Organization. The paper first explains the conceptual and normative foundations of precaution, including its relevance where scientific uncertainty surrounds risks of serious or irreversible environmental harm. It then considers the WTO experience, including EC–Hormones, to show how precautionary reasoning remains constrained by requirements of scientific evidence, risk assessment, and proportionality. Thereafter, the paper assesses the gradual and still cautious incorporation of environmental and sustainable development provisions into modern BITs and related treaty models, including examples such as CETA, the EU–Vietnam Investment Protection Agreement, the BLEU Model BIT, and the Morocco–Nigeria BIT. It further analyses the tensions that may arise between precautionary environmental measures and traditional investment protection standards, particularly fair and equitable treatment and indirect expropriation, with reference to arbitral practice such as Chemtura v Canada. Through doctrinal and comparative analysis of treaty practice, arbitral decisions, and academic literature, the paper argues that these tensions are not irreconcilable. It proposes clearer treaty drafting, express recognition of States’ regulatory autonomy, and the promotion of sustainable and green investment policies. Ultimately, the paper concludes that the precautionary principle can assist in aligning international investment governance with sustainable development while preserving investor confidence and environmental protection.