Current Approaches to the International Investment Regime in South America

Abstract

The potential negative effects of investment treaties and investment treaty arbitration on public policy issues have thus produced that many states implemented reforms within International Investment Agreements (IIAs) towards rebalancing investment protection and the right of the host state to regulate. However, this practice has not been broadly welcomed by all South American countries. This paper only aims to provide an overview on the two current approaches to tackle such concerns within this region, hereby described as a participation and a non-participation approach, by addressing innovations in IIAs and in national policies on preventing and managing investment treaty claims, respectively concluded and adopted since 2004. After a brief description of some regional factors which contributed and influenced the formation of these approaches, this study concludes that, though their few own developed contributions, the “participation approach” of some South American states mainly follows the NAFTA pragmatism in reforming substantive and procedural provisions within IIAs; while others favoured a “non-participation approach” evinced by the withdrawal of the ICSID Convention as well as the revision and the denunciation of BITs. In addition to these national developments, the Union of South American Nations (UNASUR) and to a lesser extent, the Bolivarian Alliance for the People of Our America's (ALBA), currently held the regional dialogue on seeking alternatives to the current regime for the settlement of investment disputes, without entering into the discussion of substantive and procedural issues within IIAs, which would be a more suitable strategy for dealing with the concerns initially mentioned