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<p>Since gaining independence, Sri Lanka has distinguished itself from other South Asian states by providing universal access to free public healthcare. Despite the unprecedented economic crisis imperilling the sustainability of this system, the nation continues to prioritise foreign direct investment in the health sector. A pivotal example is the Board of Investment’s approval of a 400-acre pharmaceutical manufacturing zone in Arabokka, Hambantota, which is classified as a Strategic Development Project. This initiative aspires to fulfil 40% of the national pharmaceutical demand while facilitating exports valued at $1 billion by 2025, accentuating the contemporary nexus between foreign investment regulation and public health governance, particularly concerning Sri Lanka. The COVID-19 pandemic has also amplified the necessity of integrating public health priorities with investment protection measures. In this backdrop, this article critically examines the public health-related provisions present in Sri Lanka’s Bilateral Investment Treaties (hereinafter BITs) and investment chapters of Free Trade Agreements (hereinafter FTAs) to assess the effectuation of the regulatory latitude that Sri Lanka would have as a host state if any public health-related state measure is challenged in investor-state arbitration. The detailed analysis reveals that, except for the China-Sri Lanka BIT, most of Sri Lanka’s International Investment Agreements (IIAs) lack explicit recognition of the state’s right to regulate in the public health domain. Consequently, these treaties risk privileging investor protections over public welfare considerations due to their silence on safeguarding health-related regulatory measures. Nevertheless, the inclusion of explicit public welfare clauses in Sri Lanka’s recent FTAs with Singapore and Thailand raises the question of whether a similar reformist approach could be strategically applied to modernise the country’s outdated BITs, thereby reinforcing their capacity to preserve regulatory sovereignty in health governance.</p>

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Right to regulate public health in International Investment Agreements (IIAs) of Sri Lanka: Expectation to realisation?

  • 期刊论文

  • 发表日期：

    2026年6月27日

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  • Niroshika Liyana Muhandiram

摘要

Since gaining independence, Sri Lanka has distinguished itself from other South Asian states by providing universal access to free public healthcare. Despite the unprecedented economic crisis imperilling the sustainability of this system, the nation continues to prioritise foreign direct investment in the health sector. A pivotal example is the Board of Investment’s approval of a 400-acre pharmaceutical manufacturing zone in Arabokka, Hambantota, which is classified as a Strategic Development Project. This initiative aspires to fulfil 40% of the national pharmaceutical demand while facilitating exports valued at $1 billion by 2025, accentuating the contemporary nexus between foreign investment regulation and public health governance, particularly concerning Sri Lanka. The COVID-19 pandemic has also amplified the necessity of integrating public health priorities with investment protection measures. In this backdrop, this article critically examines the public health-related provisions present in Sri Lanka’s Bilateral Investment Treaties (hereinafter BITs) and investment chapters of Free Trade Agreements (hereinafter FTAs) to assess the effectuation of the regulatory latitude that Sri Lanka would have as a host state if any public health-related state measure is challenged in investor-state arbitration. The detailed analysis reveals that, except for the China-Sri Lanka BIT, most of Sri Lanka’s International Investment Agreements (IIAs) lack explicit recognition of the state’s right to regulate in the public health domain. Consequently, these treaties risk privileging investor protections over public welfare considerations due to their silence on safeguarding health-related regulatory measures. Nevertheless, the inclusion of explicit public welfare clauses in Sri Lanka’s recent FTAs with Singapore and Thailand raises the question of whether a similar reformist approach could be strategically applied to modernise the country’s outdated BITs, thereby reinforcing their capacity to preserve regulatory sovereignty in health governance.