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52 2.4 Investment “protection” in international treaties First of all, there are many different definitions of the term foreign investment: The U.S.A., e.g., pursues a broad definition of the term, which includes foreign direct investment, portfolio investment and short-term speculative investment vehicles, in the NAFTA as well as in the FTA with Chile. The EU favors a more narrow definition, which excludes portfolio and short-term investment, also in their FTAs with Chile and Mexico. The investment rules of a (bi-)regional FTA, in contrast to those of a bilateral investment agreement, do not have any effects on third parties, i.e., any noncontracting parties. Even though the MFN principle also applies to regional FTAs, the accorded regulations do not have any validity for other international treaties, but are explicitly excluded from these – otherwise all regulations of EU treaties would automatically apply for all other states. In bilateral investment treaties that is not the case: If a BIT contains the MFN clause, then all BITs signed by this state automatically receive the same “best” (i.e., “best” for investors) conditions. On a multilateral level there were already negotiations from 1996-98 within the framework of the OECD on a multilateral agreement on investment (MAI). Above all the U.S. and the EU had pushed these negotiations within the OECD, which, however, were declared a failure in December of 1998 (due mainly to the international pressure of various NGOs who were finally able to persuade France to simply say “non”). The investment regulations already stipulated in the NAFTA had served as a model for the MAI negotiations. NAFTA is the first free trade agreement 106 which awards an international juridical status to companies, corporations and investors: Chapter 11 of the NAFTA bindingly defines this investor-to-state dispute settling mechanism. 107 The official guideline for states in their relationship with foreign investments is defined as following by the NAFTA article 1105: “Each Party shall accord to investments of investors of another Party treatment in accordance with international law, including fair and equitable treatment and full protection and security.” The so-called investor-to-state dispute settlement mechanism gives companies as recognized juridical subjects the opportunity to take legal action on the basis of 106 Bilateral investment treaties have contained this juridical construct for several years already. 107 http://www.nafta-sec-alena.org/english/nafta/chap-111.htm.
“discrimination” or “expropriation” against local, regional or national policies at an international court (ICSID 108 or UNCITRAL 109 ). This juridical construct abolishes the principle of international law of giving priority to exhaust the national course of law: In the case of investor-to-state disputes the suitor, i.e., the company, decides whether to take national or international legal action – and the business-friendly NAFTA regulatory framework seems to be more promising for companies than the domestic legal course. This means the irreversible farewell from the Calvo-doctrin, which had been valid for almost 140 years particularly in Latin America, and according to which international interventions in order to enforce private claims could only take place after completely exhausting all national legal measures. 110 According to NAFTA a “discrimination” against foreign investment can also occur by means of national legislation to protect environmental, health, employment or social rights, 111 if an investor sees his enterprise restricted or disabled according to the criteria of National Treatment defined by article 1102 of NAFTA, or by the MFN clause defined in article 1103. The term “expropriation” here does not only refer to the “classical,” direct expropriation in the form of nationalizing a company and quantifying the damage of a company for investments that have already materialized (the so-called post-establishment), but also measures equivalent to expropriation, for example, regulating business activities through political regulations and legislation (article 1110 of NAFTA). In this case measures equivalent to expropriation can also be understood as “indirect expropriation” and the possibility arises to demand compensation payments not only for already materialized investment, which can be exactly quantified, but also for expected deficits for not yet realized investment: the so-called pre-establishment. Article 1106 of NAFTA prohibits any form of conditions 112 imposed by national, regional or local governments on foreign investors. Such conditions can then also be considered as measures equivalent to expropriation and can be brought to an international arbitration court. This new positioning of transnational corporations as recognized subjects of international law, which dispose of the possibility to take legal action at an international court, but which on the other hand are not subjected to conditions, obligations or even control or sanctioning mechanisms by the same international treaties lastly 108 http://www.worldbank.org/icsid. 109 http://www.uncitral.org. 110 Calvo, Carlos: Derecho Internacional teórico y práctico de Europa y Amércia, Paris 1868. 111 See, e.g.: Peterson, Luke Eric: Research Note: Emerging Bilateral Investment Treaty Arbitration and Sustainable Development, Invest-SD News Bulletin, International Institute for Sustainable Development (IISD), August 2003. 112 “Performance requirements” or “requisitos de desempeño” [sp.]. 53
Page 2 and 3: Christian Russau Enforcement of int
Page 4 and 5: Preface Since the end of 1999 the C
Page 6 and 7: If the “Interregional Association
Page 8 and 9: 8 Chapter 5: The enforcement of int
Page 10 and 11: 10 1.1 Negotiations of the “Inter
Page 12 and 13: 12 A similar agreement of the so-ca
Page 14 and 15: 14 tute in the eyes of many countri
Page 16 and 17: 16 amaraty, where the FTAA-negotiat
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Page 20 and 21: 20 at the UN Millenium Summit to ha
Page 22 and 23: 22 on the possibility of a unilater
Page 24 and 25: 24 tual contradictions between the
Page 26 and 27: 26 fired. The workers union OGB-L,
Page 28 and 29: 28 policy and EU development policy
Page 31 and 32: Chapter 2: Foreign direct investmen
Page 33 and 34: 50% in 2002 as compared to the prev
Page 35 and 36: The reasons for propagating this co
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Page 39 and 40: promotion of domestic demand, in or
Page 41 and 42: 2.2 International Agreements and Tr
Page 43 and 44: 2.3 The World Trade Organization WT
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Page 47 and 48: 2.3.3 The GATS agreement The Genera
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Page 55: Stockholm Chamber of Commerce (SCC)
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102 countries through CC-5 accounts
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104 4.3 Brazil, foreign direct inve
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106 “Commercial Presence: The jur
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108 Providing cheaper access to wat
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110
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112 5.1 Foreign direct investment i
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114 The agreement on government pro
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116 5.2 The case of Chile: Foreign
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118 which was believed to be dead,
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120 c) The still pending Doha “De
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122 gesamtamerikanischen Freihandel
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124 · http://europa.eu.int/comm/co
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126 · http://www.citizen.org/ · h
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128 · http://www.rebrip.org.br ·
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130 um den Markt der wiederentdeckt
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132 · Torrent, Ramón: Acordos Int
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134 DIHK Deutscher Industrie- und H
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136 Lomé Lomé-Agreement between E
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