TRANSNATIONAL INVESTMENT LAW AND ENVIRONMENTAL PROTECTION: RUSSIAN STATE INTERVENTION IN THE SAKHALIN II PROJECT – THE EMPIRE STRIKES BACK?

The overall legal framework for transnational petroleum development projects is arguably a conjunction between international investment law and several other fields of international law, notably environmental law and human rights. However, the relationship between these applicable fields of international law is uncertain. In particular, prospects for the application of environmental law within such projects appear to depend on the balance in political and economic power between the host State and any multinational/transnational oil companies involved in the project. This balance is usually in favour of investment protection for the economic actors involved but the enduring role of the host State as the sovereign regulatory power within the relevant jurisdiction cannot be denied. The general issues raised in this debate will be examined within the specific context of the Sakhalin II project in the Russian Far East, where the host government has intervened on the ostensible basis of ensuring environmental protection but arguably at the expense of investment protection.