International Investment Perspectives 2007

Freedom of Investment in a Changing World

image of International Investment Perspectives 2007
The global environment for foreign direct investment (FDI) improved in 2006 with investment inflows in OECD countries reaching US$ 910 billion – their highest level since the record year 2000. Cross-border mergers and acquisitions – a central component of FDI – continued to grow in 2007 and could be headed for their highest-ever levels. This volume of International Investment Perspectives contains two main analytic sections. The first addresses an apparent growth in discriminatory practices toward cross-border investment in recent years motivated by concerns about national security and related essential concerns. The second main section focuses on the new opportunities arising from FDI and the changing nature of the international economy in which investment takes place.

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Essential Security Interests under International Investment Law

Under many international agreements, states have negotiated language which provides that even when states have entered into treaty commitments, such commitments do not prevent them from taking measures in order to protect their essential security interests. How often are provisions on essential security interests found in investment agreements? What is their scope? Is the state entitled to be the sole judge for invoking these provisions, i.e. are they self-judging? Is there relevant customary international law on this issue? How have arbitral tribunals interpreted essential security provisions? The present article focuses on these questions. It analyses: i) the frequency and scope of these provisions in international investment agreements and instruments to which OECD members are party; ii) the way customary international law bears on this issue; and iii) the views of arbitral tribunals who expressed themselves on these issues in specific cases.

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