Unlocking Sustainable Development in Central Asian Bilateral Investment Treaties?


Recently, governments, international organizations, and investors in Central Asia have sought to take the necessary steps to achieve sustainable development (Central Asia Investment Forum (CAIF)2022UN – Second Regional SDG Summit of Central Asian countries – 2022). Generally, Central Asian countries (Uzbekistan, Kazakhstan, Tajikistan, Kyrgyzstan, and Turkmenistan) benefit from large domestic markets, relatively inexpensive and abundant labour pools, and a wealth of raw materials. In 2021, the region’s foreign trade in goods totalled USD 165.5 billion, a sixfold increase over the last 20 years.  On the other hand, Central Asia is highly vulnerable to climate change, with food, water, and energy resources particularly susceptible to climate challenges. Additionally, the region still has non-harmonized regulatory investment environments that are not yet fully aligned with the sustainable development agenda.

These concerns have been setting and backstopping the agenda for sustainable development-oriented investment treaty reform. This shift is reflected in a new generation of BITs with elements that shift the focus from economic development to the wider development implications of investment protection. According to the UNCTAD Investment Policy Hub, as of October 2023, the Central Asian states were parties to 214 BITs with countries such as the United States, China, France, Germany, Switzerland, and the United Kingdom. Most of these BITs are still in force, and their content varies despite many similarities in terms of both substantive and procedural provisions.  However, a few include sustainable development elements related to rising human rights, environmental, and labour concerns in their preambles (e.g., Austria–Kazakhstan BIT, Austria–Tajikistan BIT, Hungary–Kyrgyzstan BIT, and Republic of Korea–Uzbekistan BIT).

The United Nations SDGs are complex. The 2030 SDG Agenda addresses a wide range of concerns in a balanced and integrated manner, including economic, social, and environmental dimensions. Investments are needed to promote more sustainable and responsible agriculture and infrastructure, along with low-carbon, climate-resilient development, innovation, and technologies. Meanwhile, the Universal Declaration on Human Rights, UN Covenants, UNFCCC, together with the Kyoto Protocol and Paris Agreement, Convention on Biological Diversity, Convention to Combat Desertification, International Labour Organization Conventions, and UNCTAD Investment Policy Framework all promote a new generation of investment policies in support of the spirit of the Addis Ababa Action Agenda. They call on all states, including those in Central Asia, to reorient their national and international investment regimes toward sustainable development. In light of that, the Central Asian countries have increasingly emphasized sustainable development when negotiating investment treaties.

Despite their positive attempts, Central Asian countries face different levels and types of sustainable development challenges considering various domestic policy preferences and national contexts. Indeed, there are no uniform and fixed standards in determining the level of sustainable development orientation in investment treaties at national and international levels. Nonetheless, as the next section shows, sustainable development gaps in Central Asian BITs are substantial, and significant efforts must be made to ensure that more than preambular declarations are included to meet the region’s sustainable development challenges.

Overview of Sustainable Development-Oriented Provisions in Central Asian BITs

In comparison to the majority of European and U.S. BITs that have sought to achieve a balance by incorporating social and economic aspects, Central Asian  BITs are of an older generation that simply focus on investment protection and dispute settlement.

Firstly, despite the fact that Central Asian BITs vary from treaty to treaty, the structure of treaties and the content of investment protections are very similar.[1] Usually, sustainable development is integrated into Central Asian BITs using common approaches via provisions in preambles, human rights-related clauses, CSR clauses, and, more recently, clauses relating directly to sustainable development. There are not many cases of such provisions, however, and they appear only rarely, e.g., in the Austria–Kazakhstan BIT, Austria–Tajikistan BIT, Hungary–Kyrgyzstan BIT, Republic of Korea–Uzbekistan BIT.

Secondly, sustainable development-related provisions found in Central Asian BIT’s preambles (and linked to values such as national security, public health, labour, human rights, and the environment) are typically declaratory in nature. Whereas such treaty language in preambular or declaratory contexts has important interpretative functions according to Article 31 of the VCLT and a BIT’s meaning is to be derived, inter alia, from the treaty’s preamble, such provisions do not create operational legal content, let alone rights and obligations.

Thirdly, Central Asian BITs have been based on other parties’ model BITs and do not even define the concept of FET and expropriation.[2] It is possible that, in the absence of specific references to sustainable development or particular components thereof in BITs, tribunals can still use the methods provided for in the VCLT to interpret the treaty provisions to take into account sustainable development-related concerns.  However, given the existing practice of ISDS tribunals when interpreting even the new-generation BITs, this solution is hardly optimal.[3]

It may be said that sustainable development is a relatively novel concept in the context of Central Asian BITs, and it has only recently started finding its way into the growing discussions about the compatibility of investment regimes and broader non-economic interests. A better understanding of the status quo and the trends toward the inclusion of sustainable development-related provisions within Central Asian BITs allows revision of the old-generation BITs and FTAs, and shifting to a new generation of BITs that are more structured, with specific compliance mechanisms to ensure SDGs implementation.

A comprehensive evaluation of the BIT regime in the Central Asia outlines the following:

Country  Country’s investment treaties profile Integrating the SDGs into BITs
Kazakhstan Kazakhstan is part of more than 52 bilateral investment treaties, as well as the ECT and Eurasian Investment Agreement, WTO. Includes BITs that Austria concluded with Kazakhstan that refer to human rights in the preamble and in Finland–Kazakhstan BIT (2007) to health, safety, and environmental measures of general application; also the Kazakhstan–United States of America BIT (1992) refers to labour rights.
Kyrgyzstan Kyrgyzstan is part of 38 bilateral investment treaties, with countries such as United States, China, and others as well as the ECT and Eurasian Investment Agreement, WTO. Recent Hungary–Kyrgyzstan BIT (2020) directly refers to the   sustainable development in the preamble,  Austria–Kyrgyzstan BIT (2016) refers   to its international obligations and commitments concerning respect for human rights,  Finland– Kyrgyzstan BIT (2003)Kyrgyzstan–United States of America BIT (1993)  to labour  rights.
Uzbekistan Uzbekistan is part of 56 BITs (out of which 45 are currently in force) as well as the ECT. The Republic of Korea–Uzbekistan BIT (2019) refers to labour rights and fostering sustainable development. The Turkey–Uzbekistan BIT (2017),  China–Uzbekistan BIT (2011),  Japan–Uzbekistan BIT (2008), United States of America–Uzbekistan BIT (1994) refer to  health, safety, and environmental measures as well as labour rights in the  preamble.
Tajikistan Tajikistan is party to more than 42 BITs,[4] the Eurasian Investment Agreement, and the ECT. The only BIT that Austria concluded with Tajikistan refers to human rights in the preamble.  Regarding this,  the sustainable development dimension of Tajikistan’s BITs could be strengthened.
Turkmenistan Turkmenistan is party to 29 BITs and several treaties with investment provisions, such as the ECT. None of Turkmenistan’s   BITs contain references to either sustainable development in general or environmental, health, or labour standards in particular. In Turkmenistan, promoting sustainable development requires more consideration of the social, environmental, and economic issues.

Challenges and Opportunities of Central Asian BITs for Ensuring Sustainable Development

As shown above, at the Central Asian level, BITs mostly do not contain references to either sustainable development in general or environmental, public health, or labour standards, in particular. However, there are still challenges to the implementation of BITs given the high level of corruption, lack of transparency of courts, poor-quality regulations, the inconsistent interpretation (and arbitrary application) of laws, and the frequent changes of the political establishment.

At a time of pressing social and environmental challenges, some investment activities may cause serious harm to the Central Asian environment and local communities and give rise to international disputes and political conflicts.[5]  Many of the cases related to sustainable development, like environmental protection, human rights, and public health, concern the regulatory autonomy of host states and involve indirect expropriations and the FET standard.

Much of the current criticism of BITs in Central Asia has to do with their alleged impact on the right to regulate. The Central Asian states have tried to prevent this phenomenon by attempting to restrict the scope of BITs using domestic laws. That is especially true in the cases of Turkmenistan, Tajikistan, and Uzbekistan via their procedures for the admission of foreign investment and restricted list approaches (for example, sectoral quasi-monopolies by the state in oil, energy production, gas pipelines, ports, and airports services). In practical effect, however, the Central Asian national investment law instruments can be regarded more as a reiteration of the supremacy of national laws, thus setting them apart from existing BITs.[6]

Moreover, while reform efforts have been taking hold in new-generation treaties, the large stock of old-generation BITs is becoming an increasing source of friction in the modernization of the investment regime in Central Asia. Aligning existing treaties with the SDGs raises different opportunities and challenges than designing future treaties. Renegotiations of existing BITs are undertaken hesitantly, and when renegotiations occur, BITs are replaced by new BITs or FTAs that contain similar investment protection standards.

There are numerous possibilities for Central Asian governments to adapt their investment treaties to fit their individual needs in the context of sustainable development. Accordingly, BITs can no longer be designed in isolation but also need to be harmonized with the SDGs by using exceptions and reservation approaches. Moreover, well-drafted agreements can achieve more than their inherent goals by using a bottom-up approach with the involvement of the public rather than a top-down manner.


In general, the SDG agenda suggests that foreign investment and sustainable development are closely linked allies that may mutually reinforce each other. Sustainable development requires economic development that focuses on the well-being of all people while at the same time not jeopardizing the interests of future generations. Meanwhile, determination of the content of sustainable development has turned out to be a complex and much contested issue.

The BIT crisis triggered a wide-ranging reform process to reconcile investment promotion, protection, and sustainable development in one fell swoop. Concluding sustainable development-oriented BITs is a sensible policy option for Central Asian countries in confronting the challenges of sustainable development. As it stands, however, sustainable development gaps in the Central Asian BITs are substantial, and significant efforts need to be made to ensure that more than preambular declarations are included to meet the region’s challenges.


Aida Bektasheva, PhD candidate, University of Miskolc and independent investment law expert on Central Asia


[1]Such as investment protection standards (MFN, FET, expropriation, right to regulate, clauses for investment dispute settlement).

[2] Aldiyarova, A. (2019). BIT planning for Central Asia: The problem of negotiations and definitions. https://www.transnational-dispute-management.com/journal-advance-publication-article.asp?key=1777

[3] See, e.g., Eco Oro Minerals Corp. v. Colombia, ICSID Case No. ARB/16/41, Decision on Jurisdiction, Liability, and Directions on Quantum (9 September 2021); Alschner, W. (2022). Investment arbitration and state-driven reform: New treaties, old outcomes. Oxford University Press.

[4] UNCTAD, International Investment Agreements Navigator, https://investmentpolicy.unctad.org/international-investment-agreements/countries/206/tajikistan

[5] See, for example,  Centerra Gold Inc. and Kumtor Gold Company v. The Kyrgyz Republic, PCA Case No. 2007-01/AA278

[6] Sattorova, M. (2015). International investment law in Central Asia: The making, implementation and change of investment rules from a regionalist perspective, Journal of World Investment & Trade 16, 1089–1123.