Reimagining Investment for Sustainable Development: Key Insights from Professor Surya Deva

Global investment policy is at a critical crossroads, as we confront the dual challenges of economic inequalities and unsustainable growth. At the recent International Institute for Sustainable Development's 16th Investment Policy Forum held in the Philippines, Professor Surya Deva, UN Special Rapporteur on the Right to Development, delivered a thought-provoking keynote address that emphasized the need to rethink our approach to the current international investment regime and its alignment with the broader goals of sustainable development and human rights.

Rethinking Investment: Whose Development Is It For?

In a world where the Sustainable Development Goals (SDGs) are falling behind and global inequalities are widening, Deva posed a fundamental question: Whose development is this investment for? The existing economic system often exacerbates inequalities, especially in terms of wealth distribution and access to essential resources. He noted that in many developing countries the poorest have little access to technologies like the internet. The issue is not only about promoting growth but about ensuring that the benefits of investment are equitably distributed across all segments of society.

The Flawed Sequencing of Economic Growth

Deva challenged the widely accepted notion that economic growth should precede the realization of other human rights. In many cases, this mindset prioritizes profit over people, leading to the creation of jobs that may not necessarily be decent or secure. The question is not only whether investments are creating jobs, but also whether these jobs uphold basic rights and offer long-term benefits to workers.

The Problem of Siloed Approaches

Another key issue Deva highlighted was the "siloed" approach to investment and development policies. While investment policies affect various aspects of society—from economic growth to environmental sustainability—these issues are often addressed in isolation. Deva advocated for a more coherent and integrated approach to policy-making that takes into account the cross-cutting nature of these challenges.

Opaque Processes and the Hidden Costs of Tax Concessions

A significant challenge in the current investment architecture is the lack of transparency, particularly in relation to tax concessions. Governments often grant these concessions to attract foreign direct investment (FDI), but the costs and benefits of such incentives remain obscure. Deva called for more transparent and accountable processes, where the long-term costs to society are clearly weighed against the immediate economic gains.

Power Imbalances in Investment Treaties

A central theme in Deva's address was the entrenched power imbalances in international investment agreements, particularly in the context of Investor-State Dispute Settlement (ISDS). These mechanisms, designed to protect investors' rights, often fail to consider the obligations investors should have towards the host country, particularly in areas such as labor rights and environmental protection. The imbalance between rights and obligations must be addressed to create a more equitable and just investment regime.

Intersectionality and the Impact of Investment

Deva emphasized the importance of considering the intersectional impacts of investment, particularly in terms of gender and generational divides. Investments have different consequences for different groups, and policies should be sensitive to these variations. A holistic approach to the right to development must take into account the diverse ways in which investment affects various segments of society, ensuring that no one is left behind.

Human Rights as the Foundation of Investment Policies

At the heart of Deva’s message was the idea that investment is merely a means to promote human rights for everyone, everywhere. Going even further, he argued for a planet centred economic approach which incorporates human and animal rights, sustaining the balance between economic growth and environmental sustainability. Investment policies should not only focus on financial returns but should also incorporate strong protections for labor rights and the environment, with clear penalties for breaches.

A New Generation of Investment Treaties

Deva also pointed to a shift in the global investment regime, where a new generation of investment treaties is beginning to incorporate provisions on human rights, labor standards, and environmental protection. This marks a significant departure from traditional treaties that primarily focus on investor protection. He advocated for the adoption of a legally binding instrument to hold transnational corporations accountable for their impact on human rights and the environment.

Moving Forward: Toward a Sustainable Investment Framework

Professor Deva’s keynote advocated for the need to rethink the role of investment in promoting sustainable development. He called for a shift from only an economic growth-centric model to one that centers human rights and environmental sustainability. Governments, international organizations, and corporations must work together to create an investment architecture that not only drives economic development but also advances social and environmental justice.

In the face of growing global inequalities and environmental degradation, the call for a more balanced, inclusive, and transparent investment architecture is more urgent than ever. By aligning investment policies with human rights principles and the SDGs, we can create a more just and sustainable future for all.