The project 2023-2024 «Legal framework for overcoming inequality»

Track 1. Integrating SDGs in International Investment Law

International investment law regulates the attraction of foreign direct investment and its subsequent protection. The law encompasses the set of 2800 and more international investment agreements, providing for normative guarantees for investors and a recipient-state’s obligations to ensure investment’s integrity from unwanted regulatory actions. The problem is, however, that while designed to increase the investment attractiveness of the state-parties, agreements thus restrict state regulatory freedom in protecting its essential interests: public order and health, human rights, and social and ecological protection. Consequently, international investment agreements restrain the sustainable development of states, precluding the adoption of necessary social- and ecology-oriented measures. As a result, vulnerable groups en masse and across the world suffer from the states’ regulatory incapacity to address challenges of the modern world, posed, in no small part, by the attracted investors themselves.

Partly to implement the SDGs, the global community has initiated the reform of the international investment agreements. Yet the proposals’ efficiency and reasonability in addressing the named challenges remain criticised. Scholars and practitioners argue that the reform is, on the one side, well positioned to become the notorious example of massive greenwashing and, on the other, to lead to the system’s functional degradation via undermining its very purpose ‒ the attraction and protection of investments.

The dichotomy of posed challenges to the reform requires a complex approach to its successful resolution. The proposed strand of research provides for the analysis and valuation of the system’s functional potential in light of the SDGs. The methodology of such research will comprise different methods of various international law schools of thought: legal positivism, critical legal studies, political analysis, law and economics analysis and other interdisciplinary theories. Based on the analysis results, reform proposals shall be assessed as to how they ensure (i) the operational capacities of the system and (ii) the SDGs achievement. The results of the multi-stepped research will contribute to the formulation of the amended proposals to the reform, retaining the system’s functional capacity and achieving its congruence with sustainability considerations.

Track 2. Clean Energy: Legal Dimension of the Energy Transition

The Energy Transition issue has got a practical meaning for the Russian Federation in 2019 after accession to the Paris Agreement. The problem is that ‘greening’ of energy requires interconnection with other SDGs implementation, as well as with national interests and needs of our country.

The objective of developing and implementing an action plan to harmonize the Russian legislation with International Law and best practices of environmental protection in energy industry is provided for in paragraph 72 of the section “Environmental protection and combatting the climate change (reducing the negative impact of the activities of fuel and energy complex organizations on the environment)” of the action plan for the implementation of the Energy Strategy of the Russian Federation for the period till 2035 (approved by the order of the Government of the Russian Federation dated 1 June 2021 No. 1447-r).

In this regard, as well as considering the prospect of the EU carbon border adjustment mechanism (the EU Green Deal) entering into force, it is essential to develop a Russian regulatory framework for the implementation of low-carbon certificates confirming the production of Russian goods using green energy. These goals can be achieved both through the development of renewable energy sources, nuclear energy, and by increasing the energy efficiency of fossil fuels usage.

At the same time, industrial consumers demand the authorities to provide them with different frameworks and standards, not only energy certificates to prove the environmental friendliness of their products. The largest exporters already refer to alternative carbon accounting frameworks and standards, using legal mechanisms contemplated by foreign jurisdictions. The carbon emissions volume is not yet of significant importance for producers focused on the domestic market. Thus, international legal regulation of ‘green energy’, as well as a comprehensive analysis of the practices of foreign states and regional unions to regulate the energy sector are quite topical, taking into account the agenda of ‘green energy’ and the concept of sustainable development for creating the most convenient conditions for exporters and maximum protection of their interests.

Track 3. Information Technologies for Peaceful and Sustainable Development

Sustainable development of the international community is impossible outside the context of peaceful and open dialogue between states, as reflected in SDG 16: Peace, Justice and Strong Institutions. In a situation where malicious use of information and communication technologies (ICTs) and, occasionally, actual damage to critical infrastructure are reliably detected on a daily basis, ensuring international information security has become a priority agenda item for all humankind. Information space is an area of collision of states’ interests and, no less importantly, it poses challenges to the expert community that have not yet been resolved. Elaboration of positions on application of International Law in the so-called ‘cyberspace’ is complicated not only by legal (doctrinal) reasons, but also by different political and ideological approaches to the problem itself.

The most complex theoretical issues of applying International Law in cyberspace are in the spotlight of this project. These issues include, in particular, respect for sovereignty and non-interference in domestic affairs in cyberspace, political and legal attribution of state responsibility for cyber operations and application of International Law to relations in the ICTs environment by analogy and/or in a progressive manner. Moreover, the project aims to address aspects of responsible behavior of states in the field of critical information infrastructure security, which is of enormous practical relevance.  As a separate aspect, the legality of coercive measures (the so-called ‘sanctions’) used by states, supranational (EU) and international organizations in response to cyber operations are in the focus of analysis.

In particular, conceptualization of the issues of International Law application to malicious activities in the ICTs field will make it possible to form an expert basis that can be used by public authorities of the Russian Federation (namely, Ministry of Foreign Affairs and Ministry of Justice), as well as by national think tanks that develop our country’s position on these issues. First and foremost, it will be valuable for expert support to the work of the Second Open-Ended Working Group on Security of and in the Use of Information and Communication Technologies. In accordance with the UN General Assembly Resolution 75/240, this group will, over a five-year period (2021-2025), further elaborate norms, rules and principles of responsible behavior of states and ways of their implementation, as well as examine the issues of how exactly International Law applies to the use of the ICTs by states.

Track 4. Economic Inequality in the Context of International Law, Economic Priorities and Political Realities

Despite the significant progress of the world community in reducing extreme poverty, income and wealth inequality continues to grow in both developed and developing countries. Increasing inequality is explained by a number of factors, such as the deregulation of financial markets, particularities of the taxation system, stagnation in the level of labor incomes, and underrepresentation of the most vulnerable groups of population in political institutions. At the same time, along with factors the influence of which on the inequality level is not questioned today, other reasons for the widening gap between the richest and the poorest still require analysis.

This dictates the importance of studying within-country and cross-country inequality in its economic, political and International Law aspects. This goal aligns with the targets set for achieving SDG 10: Reduced Inequalities, covering the elimination of discriminatory laws and policies, improving the regulation of global financial markets, and directing aid, including foreign direct investment, to the countries most in need. Both positivist approaches and the combination of International Law, economics and political science allow identify the causes of increasing inequality within and across countries, as well as conceptualize ways to respond to the growing concern of such inequality increase.

The search for approaches to mitigate economic inequality and ensure balance should simultaneously be carried out in the private law plane. In international business, the concept of sustainability is best implemented through a set of mechanisms of contract law and corporate legal regulation. The experience of developed countries shows that without participation of corporations, which are the most influential players in the international market, it is impossible to effectively solve global problems. In this regard, issues related to the reflection of SDGs in corporate law and corporate governance, as well as in commercial contracts, deserve close attention.

Given the great promise of using private law tools to ensure sustainable growth and overcome inequality, research is needed along the following lines. In the field of corporate law it is essential to: (a) determine the impact of sustainable development standards on the evolution of corporate law in Russia and abroad; (b) evaluate the legal impact of the rapidly growing body of ‘soft’ corporate law and corporate self-regulation; (c) explore the trend of socialization in corporate law; and (d) critically reflect on the request for harmonization and unification of corporate legal regulation within the framework of regional economic integration unions (for example, the UAEU). In the area of contract law it is needed to: (a) update the ‘sustainable growth’ agenda for contract law in Russia; (b) conceptualize the phenomenon of ‘sustainable contract’ and identify trends in the sustainable development of commercial contracts and contractual practices; (c) explore the prospects of the contract as a key legal means of regulating relations within supply chains (value chains) to address the problems of inequality; and (d) justify the role of a private law contract in achieving publicly significant goals. The obtained scientific results will be useful for improving the positive contractual and corporate law of Russia, and the applied legal mechanisms identified in the course of the study will contribute to the development of best business practices in these areas.