The Future of ICSID - Chapter 1 - Investment Treaty Arbitration and International Law - Volume 5
PDF from "Investment Treaty Arbitration and International Law - Volume 5"
Meg Kinnear, Secretary-General, ICSID
Originally from Investment Treaty Arbitration and International Law - Volume 5
I am delighted to have the opportunity not only to speak at this conference, but also to hear the panel discussion and audience comments, and to read the very thoughtful and thorough papers that serve as the basis for the discussions. ICSID is continuously seeking feedback from facility users, and a conference focused on ICSID is an invaluable source of information. Ultimately, such feedback will help the Centre to improve its service to the international investment community over the coming years.
My comments today will touch on the origins of the ICSID Convention, progress made in the past 45 years, and the main challenges currently facing the Centre.
I. ORIGINS OF ICSID
Fifty years ago this summer, Aron Broches, then General Counsel of the World Bank, wrote a note to the Executive Directors of the Bank recommending the creation of an international mechanism to facilitate the arbitration and conciliation of disputes between foreign private investors and the State hosting their investment.
Broches identified the need for such a dispute settlement mechanism due to four particular impediments to cross-border flows of private capital (FDI). The first impediment was that foreign investors with grievances against local governments were required to seek redress of such grievances under the local law of the host State and in local courts. Second, if a foreign investor wanted to seek recourse outside the domestic courts, it was compelled to seek diplomatic protection and espousal of its claim by its home government. However, diplomatic protection was of no use to the significant number of investors who had been required to waive such protection as a condition of entry into the host State. Even where an investor maintained the right to invoke diplomatic protection, the home State was frequently unable or unwilling to espouse the investor’s case.