CPEC under the lens of public international law: legal accountability, treaty compliance, and investment governance

This thesis conducts a critical legal analysis of the China-Pakistan Economic Corridor (CPEC) in the context of international investment law, treaty obligations, and human rights frameworks. The legal foundation of CPEC is devoid of the formal characteristics of binding international agreements, despite its geostrategic significance and integration into China's Belt and Road Initiative (BRI). Memoranda of Understanding (MoUs), framework agreements, and project-specific contracts are among the core instruments that are draughted in aspirational language and fail to demonstrate a clear intention to establish enforceable obligations, as required by Article 2(1)(a) of the Vienna Convention on the Law of Treaties (1969”). As a result, these instruments are classified as "soft law" rather than treaties, which means that they are not eligible for the application of pacta sunt servanda or invocation before international adjudicatory tribunals like the ICJ or ICSID. This thesis contends that the legal framework of CPEC is inconsistent, opaque, and lacking in the institutional safeguards that are present in modern economic treaties such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the United States-Mexico-Canada Agreement (USMCA). CPEC instruments generally lack the essential features of treaty-based investment frameworks, such as transparent arbitration clauses, non-discriminatory treatment, investor-state dispute settlement (ISDS) mechanisms, and guarantees of fair and equitable treatment (FET) or most-favoured-nation (MFN) status. CPEC documents do not include uniform governing law clauses, detailed expropriation safeguards, or binding interpretive mechanisms, in contrast to BITs and FTAs. This institutional vacuum creates substantial legal uncertainty and increases the political and regulatory risks for both domestic and foreign stakeholders. The thesis also critiques Pakistan's limited capacity to make treaties, pointing out that no binding investment treaty has been concluded to regulate the CPEC framework. Although the China-Pakistan Free Trade Agreement (CPFTA, 2006) includes a general investment chapter, its provisions are non-binding, feeble, and do not address the intricacies of large-scale, high-risk infrastructure projects like CPEC. CPFTA does not expressly include CPEC, and it does not provide a comprehensive ISDS framework or treaty-level recourse for private investors. Its failure to adhere to international investment protection standards established in ICSID jurisprudence is a result of its reliance on ambiguous language, such as "shall encourage," which undermines legal enforceability. Additionally, the CPFTA conditionalizes ICSID access on the completion of domestic remedies, which is in direct opposition to the unconditional consent principle outlined in Article 25 of the ICSID Convention. Furthermore, the thesis reveals the fragmented governance model of CPEC. In contrast to the centralised and treaty-backed institutional frameworks of the CPTPP or USMCA, which include compliance commissions, arbitration panels, and appellate bodies, CPEC operates through domestic bodies such as the CPEC Authority. These bodies are not legally bound by international law and lack neutrality and transparency. Extreme jurisdictional variability is manifested in project-specific contracts, which are frequently executed between Pakistani public entities and Chinese state-owned enterprises (SOEs). The majority of them either incorporate obscure arbitration clauses, defer to Pakistani domestic law and tribunals, or omit regulating law provisions entirely. Investor protections are compromised, and legal predictability is impaired by this contractual ambiguity. Additionally, this thesis investigates the pervasive non-disclosure of CPEC agreements, arguing that such opacity is in violation of binding constitutional and international legal standards. Pakistan's Right of Access to Information Act, 2017, and Article 19A of its Constitution ensure that the public has access to state-held information, particularly in the arenas of public finance and national development. Nevertheless, the CPEC agreements are protected from public scrutiny by a system of executive secrecy. This concealment is also incompatible with international transparency standards, including the Aarhus Convention and Article 19(2) of the International Covenant on Civil and Political Rights (ICCPR). The thesis contends that nondisclosure not only violates human rights obligations but also undermines institutional legitimacy and investor confidence. The implications of executive opacity are further complicated by the involvement of prohibited Chinese firms in CPEC projects. These firms have been debarred by institutions such as the World Bank for procurement violations. Their inclusion violates the standards of equal treatment and due process in public contracting and undermines the integrity of Pakistan's procurement processes. The thesis observes that these practices have the potential to initiate investor-state arbitration under the FET and MFN obligations that are enshrined in Pakistan's bilateral investment treaties with third countries. The democratic deficits in the governance of CPEC have been further underscored by the disenfranchisement, lack of legislative supervision, and regional inequity that provincial assemblies, particularly those of Khyber Pakhtunkhwa and Balochistan, have expressed concerns about. Pakistan's ad hoc approach to victim compensation under the CPEC framework is another substantial legal deficiency that the thesis examines. A policy vacuum that violates constitutional guarantees of equality (Article 25) and international standards for due process and non-discrimination is revealed by the absence of a codified compensation regime for victims of terrorism, forced displacement, and environmental degradation. Compensation decisions are not subject to judicial or administrative supervision and are still subject to executive discretion, such as those issued by the Economic Coordination Committee. This framework violates the obligations of international humanitarian and human rights law, including the ICCPR and customary international norms, and undermines the rule of law. The feasibility of rights-based compensation systems that guarantee transparency, access to remedies, and equitable redress is demonstrated through a comparative analysis of the ICC Victims Fund, EU compensation directives, and U.S. victim restitution programs. Additionally, the thesis underscores the consequences of institutional withdrawal from international transparency regimes. The 2022 exclusion of Pakistan from the Open Government Partnership is indicative of a decline in public accountability and democratic commitment. It also conveys a reluctance to adhere to international norms regulating transparency, corruption control, and sovereign liability to foreign investors and treaty partners. The thesis demonstrates how effective ISDS claims against host states can result from a lack of transparency and capricious governance by referencing investor-state jurisprudence, such as Metalclad v. Mexico and Tecmed v. Mexico. The thesis's conclusion that the CPEC is governed by a non-legal framework that evades enforceability, and judicial review is further substantiated by the failure to incorporate UNCITRAL Transparency Rules and the refusal to register instruments under Article 102 of the UN Charter. In summary, this thesis posits that the China-Pakistan Economic Corridor, despite its political transformational potential, is founded on a precarious legal framework that is inconsistent with the current standards of international economic law, human rights, and treaty obligations. Pakistan's constitutional order and international legal status are both compromised by the absence of binding commitments, procedural transparency, and institutional accountability. This legal vacuum poses a threat to sustainable development, undermines investor confidence, and exposes the state to arbitral and reputational risk. In order to align CPEC with Pakistan's domestic and international legal obligations, it is imperative to implement immediate reforms that are based on binding treaty commitments, public disclosure mandates, and ISDS-compatible investment protections.

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