Cultural Heritage Regulation in the Context of Investment Promotion: A Critical Examination of Sri Lanka’s Bilateral Investment Treaties

Abstract

International investment law and international cultural heritage law have developed independently as autonomous branches of international law, with minimal normative convergence. Nonetheless, collisions are significantly more common despite the two regimes' synergy being evident in many fields, including cultural tourism and the sustainable use of cultural heritage. Collisions between two paradigms could result in a violation of the investor rights guaranteed by investment treaties on the one hand and a breach of the duty to conserve cultural heritage on the other. In this backdrop, the purpose of this paper is to critically examine the interplay between the protection and promotion of foreign investment and the host state's right to regulate the protection of cultural heritage, with a special focus on the substantive provisions of the bilateral investment treaties (BITs) of Sri Lanka. It is vital to assess this linkage at a time when the government has decided to expand Galle Harbour, located in the world heritage site of Galle, to include a leisure hub to attract more investment opportunities. If the state adopts a regulatory measure for the protection of cultural heritage that adversely impacts the interests of a foreign investor, the investor may challenge the state measure as a breach of the State’s BIT obligation. By mapping the preamble, expropriation clause, FET standard and exception clause of the BITs of Sri Lanka, the paper analyses how the protection of cultural heritage has been integrated into its BITs. Finally, the paper emphasises the reality of adopting explicit language in the second generation of investment treaties to reconcile cultural heritage concerns with investment promotion and explores how Sri Lanka may draw on this approach in revisiting its BITs.