This chapter examines the rules that place limits on the negative externalities of international energy transactions. It begins with a discussion of certain rules which appear in the very instruments enabling and protecting the transaction (investment, trade and transit). The advantages and disadvantages of including these ‘special’ externality-relevant rules in such instruments are analysed in the light of some illustrations. Subsequently, it examines the ‘general’ externality-relevant rules, namely those laid down in instruments whose main purpose is not the organisation of international energy transactions but the regulation of their negative externalities. The discussion is organised in four steps based on whether the relevant rules focus on cost-internalisation, prevention, response or reparation.

This chapter explores the obligations of states to hold companies accountable for their human rights impacts. It focuses squarely on the obligation of home states to increase the accountability of companies operating abroad, since the critical open questions and issues in BHR arise predominantly with regard to companies’ extraterritorial conduct. Discussions around such “home-state solutions” have become a signature feature of the BHR discussion. The chapter first takes a general conceptual look at the state duty to protect and at the state's extraterritorial obligations. It then assesses different instruments that states can use to meet such obligations in the policy, legislative, and adjudicative spaces. The discussion on legislative approaches provides an overview and assessment of different types of BHR laws with extraterritorial effects that various states have adopted in recent years. The subsection on adjudicative approaches provides a brief introduction to BHR litigation and an overview of recent seminal cases in various jurisdictions. The chapter concludes with a discussion of criticisms of such extraterritorial state measures.