The 2003 investment law: its impact and compatibility with international foreign investment law

Although during the GATT Uruguay Rounds between 1986 and 1993 there was interest in commencing negotiations for an enforceable multilateral investment agreement, this did not eventually materialise. What was achieved, however, was the Agreement on Trade-Related Investment Measures (TRIMS) whose scope is very specific, covering investments related to trade in goods, excluding many areas discussed during the Uruguay Round. In 1995 the OECD began negotiating a new Multilateral Agreement on Investments (MAI), whose main objective was to apply the WTO suggestions as expressed in the last WTO Rounds in such a way as to create a single foreign investment instrument that would replace the plethora of bilateral investment treaties (BITs) inexistence.1 This was and remains a very ambitious task. Much like other BITs, the MAI envisaged the application of the Most Favoured Nation (MFN) and equal treatment principles-discussed in the following sections below-effective dispute settlement procedures and contained a provision excluding performance requirements, whereby States would not be able to impose performance requirements on investors.2 Eventually, by 1998, public opinion had grown so hostile to this project that negotiations broke down and the project was shelved. Such issues, nonetheless, from a treaty point of view are still regulated, depending on membership, by GATS, TRIPS, TRIMS and BITs. From a domestic point of view, issues of direct foreign investment are dealt with through the passing of domestic legislation in the fields of public law (expropriations, etc), contract, tax and others, some of which simply implement obligations undertaken under a particular treaty regime. Although some countries prefer the adoption of a plethora of domestic acts to regulate these issues, others choose instead to incorporate most, if not all, under a single instrument, for the purposes of clarity and coherence. The 2003Investment Law was drafted with such a purpose in mind, and although it does introduce certain new features in contrast to previous legislation, it also brings together other relevant Laws. However, it is not the only point of reference as far as foreign investment is concerned, as much of the law on oil and gas issues has remained outside the boundaries of the 2003 Law.