Transcript Emerging International Law of Foreign Investments

Emerging International Law of
Foreign Investments
Omar E. Garcia-Bolivar
Issues of Foreign Investment (FI)
• Flow of capital
-from one country to other
-in search of economic objective
• Right of property
• Sovereignty
-of Host State regulating
-of Home State extraterritorial rule
• Diplomatic protection
• International Law
• Development/Dominance
Parties to F I
• Investor: individual or corporation,
Transnational Corporations (TNCs)
• Host State
• Home State
• International Organizations
TNCs
TNC
Country B
Country A
Sub A
Country C
Sub C
What is the nationality of TNC?
Country D
Sub B
Kind of FI
• Foreign Direct Investment (FDI)
- “Greenfield”
- Mergers and Acquisitions
• Portfolio Investment (PI)
• New forms of FI
- BOO
- Non incorporating forms.
Traditional Law of FI
•
•
•
•
State Sovereignty
Diplomatic Protection
State Responsibility for injury to aliens
UN Declaration on Permanent Sovereignty on
Natural Resources
• Calvo Doctrine
• Charter Economic Rights and Duties of States
• TNCs: a matter of domestic law
New Reality of FI
FDI INFLOW
Billions US $
1200
1000
800
Developed Countries
600
Developing Countries
400
200
0
1985
1990
1995
Years
Source: UNCTAD World Investment Report 2001
1999
2000
New Reality of FI (II)
FDI OUTFLOW
Billions US $
1200
1000
800
600
Developed
400
Developing
200
0
1990 1995
1999 2000
Years
Source: UNCTAD World Investment Report 2001
Regulatory changes on FI
Numbers
Regulatory changes on FI
160
140
120
100
80
60
40
20
0
Countries
Favorable change
Unfavorable
1991
1995
1999
Years
Source: UNCTAD World Investment Report 2001
2000
Bilateral Investment Treaties
(BITs)
•
•
•
•
•
Bilateral “lex speciali”
Protects and promotes FI
Not only FDI
Based on idea of economic liberalization
More than 1300 signed as of 1996
Non Binding
• UN draft Code of Conduct on TNCs
• OECD Guidelines to TNCs
• World Bank Guidelines
Multilateral
•
•
•
•
•
•
ICSID Convention
MIGA Convention
WTO agreements: GATS, TRIMs
NAFTA Chapter 11
Energy Charter Treaty
Others (ASEAN, CARICOM, MERCOSUR,
SADC, ANZCERTA)
• Failed OECD MAI
• Draft FTAA
International Law of FI
Multilateral
BITs
Regional
Specialized
Int’ law FI
FI
Investor Admission
Treatment
Property
Dispute
Conclusions
• International law of FI enhances investment
climate.
• Emerging law protects FI, not only FDI.
• TNCs’ nationality is determined.
• Admission.
• Treatment.
• Expropriation upon conditions.
• Investment dispute settlement mechanisms.
Omar E. Garcia-Bolivar
[email protected]
(703) 212-0300