Regulatory chill, corporate takeover and environmental governance

Hasrat Arjjumend

The large corporations have an inevitable presence in the modern world. Generally, all developing countries have formulated environmental standards and regulations to preserve their environment. However, the ‘regulatory chill’ by powerful companies supersedes environmental regulations. Moreover, an increasing number of global corporations prefer suing the States in international arbitration court under investor-State dispute settlement clauses of bilateral investment treaties. As a result, the States either adopt ‘regulatory chill’ or ‘race to the bottom’ principles to keep the economic investment within countries. Adding to the plight of weak States, the ‘corporate takeover’ occupies the State, and the environmental regulations are either diluted or suspended to pave way for complete economic liberalization. It is an outcome of intrusion and takeover by corporate power into governance structures and institutions, apart from financial sponsorship of election contestants. In such precariousness of domestic environmental affairs, what are future implications? May the ‘corporate environmental accountability regime’ be shaped internationally, and appreciated and enforced by already weak States? In case of perfect corporate takeover of the State, what will happen to State sovereignty or regulatory autonomy? How will the global environmental governance institutions respond to overall failure of States in fixing the corporate hegemony?

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