The World Bank Guidelines as a Foundation for a Global Investment Treaty: A Problem-Oriented Approach
21 December 2005
by Dr. Claudia Wendrich, LL.M.
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This thesis
focuses on the law on foreign direct investment (FDI). It addresses
international rules on the protection and treatment of FDI and does not deal
with any domestic or regional investment regime. The dissertation argues that a
multilateral convention on investment (Convention) is necessary in today's
interdependent world economy. It demonstrates that the current bilateral and
multilateral treaty regimes on foreign investment and rules of customary
international law on the treatment of aliens are not sufficient to protect
foreign investors and to promote investment flows. The thesis also explains why
the World Bank Guidelines on the Treatment of Foreign Direct Investment
(Guidelines) should serve as the foundation for a multilateral investment
treaty.
The paper - following the structure of the Guidelines - addresses admission and treatment of FDI, expropriation of foreign investments, inter-State and investor-State dispute resolution as well as the proposed Convention's scope of application. In addition, it contains an overview of numerous past attempts multilaterally to regulate FDI. Each chapter selects key problems which often arise out of investment transactions, such as restrictions on admission of foreign investors, monetary transfers and compensation for expropriated investments. The thesis outlines the approach of the Guidelines to each of these issues, demonstrates strengths and weaknesses of such approaches, reveals certain inconsistencies within the Guidelines and suggests how a Convention should address the problems.
The dissertation concludes that a multilateral investment treaty is a necessity in a globalised world economy. It summarises the reasons for past failures to negotiate a Convention and proposes initial steps crucial for the conclusion of a future treaty. The study particularly emphasises the importance of a suitable forum for negotiation and awareness of social issues for the success of any future Convention.
This paper was published in TDM 5 (2005).
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