There is No Freedom Without Solidarity: Towards New Definition of Investment in International Economic Law

Abstract

This paper does not focus on the legalistic and formalistic analysis of the definition of investment in the international investment law. The approach adopted is broader as it touches upon the very foundations of the international economic law.The paradigm of IEL hasn't changed much since the inception of the modern international legal order in the era of geographical discoveries in XVIth Century, through colonization period and up to the decolonization process which has focused on political rather than actual independence of newly created States. The emphasis has therefore been put on the free trade, freedom of investment or free flow of capital. The legal system based on such paradigm is disappointing from the perspective of both particular subjects of international relations and international community as a whole. That is why this paper calls for inclusion of 'solidarity' element into the discussion about investment law. The argument is to make an obligation of 'solidarity' one of the basic elements of the regulatory mechanisms in the investment policy. Including the obligation to contribute to the host State into the definition of investment seems the most favorable path to achieve such a change. Efforts to create legally formulated New International Economic Order were not as successful as one would like them to be. The voluntary taken declarations of behavior have not been satisfactory either as they do not provide for efficient mechanisms of enforcement. One can see also the hostility of the developed countries towards any attempt to include the 'solidarity' condition into the text of the Bilateral Investment Agreements. Arbitration tribunals acting under the ICSID Convention adopted a somewhat different approach, which to some extent deserves the approval. However, this paper suggests going even further. First, it is necessary to make that condition an element of universally applicable definition of investment. Second, the meaning of development should be broadened so to cover not only economic sphere of State activities but also other areas, such as social policy and human rights.