Content :

1. India needs an environmental health regulatory agency
2. A bilateral investment treaty with a ‘bit’ of change

India Needs an Environmental Health Regulatory Agency

Relevance: GS 3 ( Environment )

Practice question: Discuss the pros and cons of establishing an Environmental Health Regulatory Agency (EHRA) in India. (150 Words)

• Event: The 2024 Conference of Parties (COP 29) concluded in Baku, Azerbaijan.

• Key Focus for India: Pushing for ambitious climate mitigation financing from developed nations while addressing pollutants in air, water, and land posing health risks.

• Urgency: Emphasised by the increase in greenhouse gas emissions by over 6% compared to the previous year (UN Emissions Gap Report 2024).

Urgency of Integration

• Need for EHRA: The proposed Environmental Health Regulatory Agency (EHRA) to integrate and improve environmental governance focusing on pollution control and health risk mitigation.

• Health Challenges: Detrimental health effects from pollutants cause non-communicable diseases, impacting vulnerable populations like children, the elderly, and financially poor groups.

• Current Governance Model:
  • CPCB: Focuses on pollution control.
  • MoEFCC: Handles broader environmental policies.
  • MoHFW: Manages integrated disease surveillance.

• Disconnect: Lack of data flow and integration between ministries.

Proposed Solution: Establishing EHRA

Advantages :

• Integrated Governance: Unifies environmental and health data for more effective policy-making.
• Data-Driven Approach: Supports evidence-based regulations and Health Impact Assessments (HIAs).
• Economic Opportunities: Promotes sustainable practices, innovation, and green jobs.
• Public Health: Reduces pollution-related health risks, improving life expectancy and quality of life.
• Global Alignment: Helps India meet climate goals under the Paris Agreement and SDGs.
• Localised Solutions: Works with state and municipal governments for tailored, region-specific interventions.

Disadvantages :

• Bureaucratic Challenges: Potential resistance due to bureaucratic inertia and inter-departmental conflicts.
• Industry Pushback: Possible opposition from industries fearing stricter regulations and compliance costs.
• Implementation Costs: Establishing and maintaining EHRA could be resource-intensive.
• Coordination Complexity: Integration of multiple ministries and data systems could face logistical hurdles.
• Slower Response: Centralised decision-making may delay rapid action in urgent cases.

Conclusion

• India should focus on establishing an EHRA which in turn will help in fighting both pollution and health challenges with an integrated and nuanced approach

A Bilateral Investment Treaty With A ‘Bit’ of Change

Relevance: GS 2( International Relations )

Practice Question:What are the key changes in the recent Bilateral Investment Treaty (BIT) between India and the UAE, and how might these changes impact India’s future investment treaties with other countries? (250 Words )

Context :

• BIT Public Release: The Bilateral Investment Treaty (BIT) between India and the United Arab Emirates (UAE), signed earlier this year, was recently made public, replacing the 2014 treaty.

• Significance: Highlights India’s latest investment treaty practices and may influence ongoing negotiations with the UK and the EU.

• Objectives of a BIT:

1. Balance:Balance investment protection with the state’s sovereign right to regulate.

• Clarity:Contain clear provisions to limit the discretion of investor-state dispute settlement (ISDS) tribunals.

Departures from the Model BIT

Exhaustion of Local Remedies:

• Current India-UAE BIT: Foreign investors must try resolving issues in local courts for at least three years before making an ISDS claim.
  • Model BIT & Others: Previously required investors to try for five years.
  • Reason for Change: Acknowledges that the Indian court system often takes more than five years to resolve disputes, allowing investors quicker access to international arbitration.

Definition of Investment:

• Current India-UAE BIT: No longer requires that investments be significant for the host state’s development.
  • Model BIT: Included this requirement, but ISDS tribunals found it too subjective.

Treatment of Investments:

• Current India-UAE BIT: Lists specific treaty violations clearly, without using customary international law (CIL). This limits the flexibility of arbitration panels.
  • Model BIT: Linked violations to CIL, which is not clearly defined and gave too much freedom to arbitration panels.

Continuity in Investment Treaty Practice

• Absence of MFN Clause: Neither the current BIT nor the Model BIT includes the Most Favoured Nation (MFN) provision, maintaining the state’s regulatory power.
• Taxation: Excluded from the scope of the BIT, preventing foreign investors from challenging tax measures.
• Jurisdiction of ISDS Tribunals:
  • Model BIT & Current BIT: Bar the tribunal’s jurisdiction to review the ‘merits’ of domestic court decisions to avoid acting as a court of appeal.

Additional Provisions in the Current BIT

• Disallowing Third-Party Funding: The new BIT specifically prohibits third-party funding.
• Allegations of Fraud or Corruption: Bars ISDS availability if such allegations are made against the investor.

Conclusion

The new India-UAE BIT highlights India’s balanced approach to protecting investments while keeping regulatory control. However, the exclusion of MFN and taxation issues may create challenges in future negotiations.