Reconciling Islamic Environmental Doctrine with International Investment Law:

An Analysis of State Practice

Mostafa Abadikhah

 

Abstract: The inherent tension between environmental protection and economic interests is manifested in the intersection of environmental law and international investment law. Host states, obliged by domestic and international regulations, seek to preserve their natural environments, while foreign investors pursue economic benefits, often leading to regulatory challenges. This dynamic presents a distinctive legal complexity in Islamic states, where environmental stewardship (khalifa) and the prohibition of corruption (fasad) are basic religious duties. This study, therefore, aims to answer the central question: How do the principles of Islamic environmental law, derived from the higher objectives of Islamic law (maqasid al-Shari'ah), influence the formulation of investment treaties and defences in arbitration proceedings within leading Islamic jurisdictions? Employing a qualitative analysis of case law and treaty evolution, this paper examines the approaches of Saudi Arabia, Bahrain, Kuwait, Qatar, Oman, Malaysia, and Indonesia. It argues that Islamic doctrines, including stewardship (khalifa), balance (mizan), the prohibition of waste (israf), and public interest (maslaha), make a substantive legal mandate for environmental regulation. This Islamic doctrinal framework increasingly shapes these states' positions in the treaty-making process. It forms the basis for maslaha-centric defences in investor-state dispute settlement (ISDS), representing a significant trend in the reform of international investment law.