M. Sornarajah

The clash of globalizations and the international law on foreign investment

This roundtable on the international law of foreign investment illustrates the range of opinions on the subject. Professor M. Sornarajah, a Professor of Law from the National University of Singapore, addresses the topic from the perspective of developing states. He is highly critical of what he terms “a new concept of private property”. In his view the right to property has become absolute such that the right of the state to legislate in the broader public interest has been constrained. The state is required to put the rights of foreign investors ahead of domestic interests. Professor Sornarajah provides examples of this new conception of private property in reviewing dispute settlement on foreign direct investment (in particular disputes under Chapter 11 of the North American Free Trade Agreement), concerns about the restriction of state capacity to regulate in the interests of health and the environment, and the treatment by the World Trade Organization. He argues that this new understanding of private property privileges multinational corporations at the expense of individuals and undermines the capacity of states in the developing world to promote economic development in their own interests. The four commentators on the Reisman Lecture applaud Professor Sornarajahs forthrightness and some acknowledge his critique that western legal thinkers have dominated much of the thinking on international law. All take issue with his conception of property and his stance that investment disciplines should be opposed because they challenge or restrict domestic regulatory capacity. Two note that whether or not the World Trade Organization is able to negotiate a discipline on investment, the fact that the topic is on the Doha Agenda suggests some willingness on the part of developing states to discuss the subject. Taken together, the lecture and the commentaries provide a comprehensive overview of the vigorous current debate on state regulation of foreign direct investment that will be of interest to a wide range of readers. To quote Christopher Thomas, “the tensions Professor Sornarajah identifies will be with us for many more years to come.”

International Investment Law as Development Law: The Obsolescence of a Fraudulent System

Fraudulent is a strong term to describe a system of investment protection that has come about over the course of the last three decades. But, when development is made the focus of the system and it is not delivered by it, the use of the strong term is justified. The investment treaties were signed upon the promise that development will result. That has not been the case. Instead, through interpretation, arbitrators have brought about a system of absolute investment protection far more extensive than that contemplated by the parties to the treaties and far removed from the original goal of economic development. The article analyses the process through which this has been brought about.

The Return of the NIEO and the Retreat of Neo-Liberal International Law

This chapter analyses the return to the principles of the New International Economic Order (NIEO) in context of the retreat of the neo-liberal tenets that is taking place and assesses the significance of this return. It describes the norms of NIEO, giving emphasis, as is natural in case of an author whose research interests are in the area of international law on foreign investment, to those norms of the NIEO concerned with foreign investment. It is also the area that Kamal Hossain has given the greatest attention in his writings. It also describes the circumstances that led to the eclipse of NIEO. The chapter argues that the neo-liberal tenets that led to the establishment of norms contrary to those contained in the NIEO are now in retreat and that there is a resurgence of the ideas founded on the basis of the NIEO, though not in the same exact form. Keywords: foreign investment; international law; Kamal Hossain; New International Economic Order (NIEO); norms; retreat of neo-liberal tenets