EU AND FOREIGN INVESTMENT

EU and Foreign Investment



EU and Foreign Investment

Part 1: Global Treaty to Regulate Foreign Investment

With its rapid evolution, international law on foreign investment has already generated a large volume of writings, including books and collections of essays, by prominent academics and practitioners. To this body of knowledge, the book under review represents a distinct contribution by offering a succinct but incisive appraisal of the emerging principles of international investment law, as elaborated through extensive investment treaty practice and arbitration. As the title suggests, a prominent feature of this volume is the perspective from which the author analyses the evolution of international instruments currently governing the protection of foreign investment and the extent to which modern investment treaty practice takes into account competing policies, such as the promotion of sustainable development and protection of human rights. In this analysis, the author offers an impartial and balanced account of the concerns prompted by the recent developments in the international law on foreign investment, whereby the interests of foreign investors are sometimes protected against the vicissitudes of divergent economic and political regimes in host countries at the expense of other important societal values (Preamble 1997).

The volume begins with a historical overview of the way in which international investment law has evolved in response to changing economic and political conditions. Using the traditional approach of most writers on the subject, Subedi focuses on the emergence of the international minimum standard and the institution of diplomatic protection for aliens abroad. This includes a discussion on the divergent views which are reflected on the one hand in the Calvo doctrine and on the other in the Hull formula, and which for many years dominated the debate on the manner and level of international legal protection to be accorded to foreign investors (Phang Hooi Eng 1998).

The historical overview of the formation of international investment law is continued, where Subedi amply illustrates the efforts by international institutions to optimize the regulation of foreign investment on the international plane. The overview discusses the various attempts to achieve some form of international agreement on fundamental principles for the international protection of foreign investment under the auspices of the UN, OECD, World Bank, and the WTO. He briefly discusses the debates which flowed from the UN Resolution on the Permanent Sovereignty of States over their Natural Resources, and the subsequent attempts to develop the law through the New International Economic Order and the 1974 Charter of Economic Rights and Duties of State (Kregal, 1996). The author offers an insight into other institutional projects to regulate the conduct of foreign investment, including unsuccessful efforts, under the aegis of the UN, to adopt an international code of conduct for transnational corporations (TNCs) and, by the OECD, to conclude a Multilateral Agreement on Investment (MAI). In outlining the various attempts by international organizations to adopt an internationally agreed instrument on the regulation of foreign investment, the author also brings to the fore an abandoned initiative on the agenda of the ...