Bolivia, Venezuela and Nicaragua withdraw together from the ICSID

2 May 2007

DECISION OF ALBA-PTA ON ICSID ICSID The International Centre for the Settlement of Investment Disputes (ICSID) is a World Bank arbitration mechanism for resolving disputes that may arise between States and foreign investors. It was established in 1965 when the Washington Convention of that year entered into force.

Contrary to some opinions defending the fact that ICSID mechanism has been widely accepted in the American hemisphere, many States in the region continue to keep their distance: Canada, Cuba, Mexico and Dominican Republic are not party to the Convention. In the case of Mexico, this attitude is rated by specialists as “wise and rebellious”. We must also recall that the following Caribbean States remain outside the ICSID jurisdiction: Antigua and Barbuda, Belize, Dominica (Commonwealth of) and Suriname. In South America, Brazil has not ratified (or even signed) the ICSID convention and the 6th most powerful world economy seems to show no special interest in doing so.

In the case of Costa Rica, access to ICSID system is extremely interesting: Costa Rica signed the ICSID Convention in September, 1981 but didn’t ratify it until 12 years later, in 1993. We read in a memorandum of GCAB (Global Committee of Argentina Bondholders) that Costa Rica`s decision resulted from direct United States pressure due to the Santa Elena expropriation case, which was decided in 2000 :
"In the 1990s, following the expropriation of property owned allegedly by an American investor, Costa Rica refused to submit the dispute to ICSID arbitration. The American investor invoked the Helms Amendment and delayed a $ 175 million loan from the Inter-American Development Bank to Costa Rica. Costa Rica consented to the ICSID proceedings, and the American investor ultimately recovered U.S. $ 16 million”.

Member countries (Bolivia, Venezuela and Nicaragua) of the Bolivarian Alternative for the Americas (ALBA) and Peoples’ Trade Agreements (PTA) have emphatically rejected legal, diplomatic and media pressure exercised by some multinational companies, which having made vulnerable constitutional rules, national laws, contractual obligations, regulatory environmental and labour resolutions, resist the application of sovereign rules by threatened countries by initiating international arbitration against national states for example within ICSID, the International Centre for the Settlement of Investment Disputes.

As a result, the States who form ALBA-PTA have decided to withdraw together from the ICSID convention in order to guarantee the sovereign right of countries to regulate foreign investment on their national territories.

Source: Pablo Solon (chief negotiator on integration for the Bolivian Government) This paragraph was approved in the Fifth ALBA-PTA summit.




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