The clash of globalizations and the international law on foreign investment

Abstract

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 Sornarajah's 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.”