CAPÍTULO I: MARCO CONCEPTUAL
3.1. Sección I: el Programa del Adulto Mayor de Pueblo Libre: descripción y
3.1.1. El Programa del Adulto Mayor de Pueblo Libre: la historia "oficial"
National treatment is a concept widely used in international economic law. As regards investment protection it means that foreign investors shall enjoy treatment no less favourable than the treatment granted by the host State to its domestic investors.® Countless investment
^ ) Guideline 111(2-4). 2) Guideline lll(5)(b).
2 ) Guideline 111(6).
4 ) Guideline 111(8). 5 ) Guideline 111(9).
6 ) See: e.g., Agreem ent for the Promotion and Protection of Investments between Singapore and the UK, dated July 2 2 ,1 9 7 5 , Arts. 2-3 for general standards of treatment and Art. 6 for monetary transfers. Agreem ent on the Reciprocal Promotion and Protection of Investments between Australia and Vietnam, dated March 5 ,1 9 9 1 , Arts. 3-4 for general standards of treatment, Art. 5 for employment of foreign personnel and Art. 9 for monetary transfers. Treaty between the US and Turkey Concerning the Reciprocal Encouragement and Protection of Investment, dated Decem ber 3, 1985, Art. 11(2-3) for general standards of treatment and Art. IV for monetary transfers. See also: North American Free Trade Agreement, Arts. 1102-1105 for general standards of treatment, Art. 1107 for employment of foreign personnel and Art. 1109 for monetary transfers. Energy Charter Treaty, Art. 10 for general standards of treatment, Art. 11 for employment of foreign personnel and Art. 14 for monetary transfers.
7 ) The Netherlands suggested separation of these various topics when commenting on earlier drafts of the
Guidelines. See: Comments from the Office of the Netherlands Executive Director to the May 6, 1992 draft of the Guidelines; published in Shihata, Legal Treatment of Foreign Investment, 423 at 424-425.
® ) National treatment clauses require treatment no less favourable than the treatment granted to national investors. The concept does not mean identical treatment. Otherwise a host State would be prevented from treating foreign investors better than its national investors. Also, in cases where differentiated treatment serves a legitimate purpose
I.e. where the different treatment is justified by the different situation of the foreign investor, the national treatment provision would not be violated if national and foreign investors are treated differently.
treaties refer to national treatment.^ A survey done by the World Bank in 1991/92 analysing 335 BITs^o indicated that 196 of these BITs guarantee national treatment to foreign investors. Numerous RIAs adopt this standard too.''^
Guideline lll(3)(a) grants national treatment to foreign investors in similar circumstances with respect to personal protection and security, property rights and interests, the granting of permits, import and export licenses, authorisations for hiring employees, issuance of visas for foreign personnel and other legal matters relevant to foreign investors.
A multilateral investment treaty will have to incorporate a national treatment clause. Such a provision minimises the extent to which foreign investors are put at a competitive disadvantage compared to national in v e s to r s .''2 However, national treatment is not a perfect concept and has
considerable limitations.
1.) It presupposes a national legal framework for investment in the host State. Many developing countries have indeed enacted national codes on foreign investment, but regulations for specific industries - particularly those involving sophisticated technology - do not always exist. Sometimes the relative standard of national treatment cannot be applied easily because it depends on the existence of a national investment regime to which comparisons can be made.^^
2.) Even if there is a sufficiently developed national framework for investment, the domestic laws of the host State may not be adequate to protect foreign investors because they may fall short of acceptable international standards. For example, State X refuses to grant legally required business licenses to any company incorporated under its laws which has a woman as General Manager (GM). National treatment would not offer suitable protection for foreign investors because
all
companies in this country have to have a male GM. Thus, discrimination on the basis of sex, race, religion, etc., cannot effectively be prevented by national treatment.9 ) For a list of investment treaties not incorporating this concept, see: UNCTAD, Series on Issues in International Investment Agreements: National Treatment (Geneya: UN, 1999), 15, UN D o c.U N C TA D /ITE /IIT/11 (Vol.IV ).
10 ) This survey was one of the four background studies done in preparation of the Guidelines. See: Khalil, Treatment of Foreign Investment In Bilateral Investment Treaties.
11 ) See: e.g., North American Free Trade Agreement, Art. 1102 and Unified Agreem ent for the Investment of Arab Capital in the Arab Countries, Art. 6(1).
12 ) National Treatm ent is rarely granted without exceptions. Treaties which guarantee national treatment to the admission stage of investments usually list exceptions in country specific negative lists in the appendices. See supra: chapter B II 2b(i). Also, numerous subject specific exceptions may be made at the post-admission stage, e.g.,
investment incentives are often excluded (See: e.g., NAFTA, Art. 1108(7)(a)) in order to allow the host State to subsidise domestic industries without having an obligation to offer foreign investors the sam e assistance. For more details, see: UNCTAD, Series on Issues In International Investment Agreements: National Treatment, 43-50.
13) UNCTAD, World Investment Report: Investment, Trade and International Policy Arrangements, 177.
3.) Domestic laws, regulations and administrative procedures of a host State may result in discriminatory treatment of investors from different States, even if investors are treated equally compared to domestic i n v e s t o r s .Such a scenario arises, for instance, if all investors (domestic
and foreign) investing in a locally incorporated company are required to provide the host State with certain documents about themselves in the local language. Some countries have rather cumbersome regulations on this issue. They require investors from a country with an official language other than that of the host State, not only to furnish certified translations of the required documents but request that such translations can only be made by specifically authorised, locally registered translators. Investors from countries where the official language of the host State is spoken have a clear competitive advantage in this respect.
4.) National treatment clauses, like the one in Guideline lll(3)(a), sometimes include the qualification that national treatment is granted to foreign investors “in similar circumstances”. This limitation, although widely used in instruments to which the US is a p a r t y ,is pointless. It mistakenly assumes that a comparison of business situations between domestic and foreign investors is possible.""6 In reality, the very fact that an investor is foreign implies that his circumstances are always different from those of a national investor. For example, a company incorporated in a host State may borrow funds from its parent company to finance its initial operations. If the parent company is also incorporated in the host State, a loan agreement between the two enterprises may easily be enforced. If, on the other hand, the parent company is foreign, an identical loan agreement may be subject to extensive governmental or Central Bank approvals, and the money needs to be sent and made available in the host State. Thus, the fact that an investor is foreign has a considerable impact on the operation of his investment. In addition, the qualification “in similar circumstances” is too imprecise.^^
What
needs to be similar? The size of the investment? The kind of investor? The sector or the location of the investment? The proposed number of employees the investors intends to hire? The environmental impact of the investment? A combination of these aspects?) Dolzer and Stevens, Bilateral Investment Treaties, 64.
15 ) See: e.g., North American Free Trade Agreement, Art. 1102 and Treaty between the US and Jordan Concerning the Encouragement and Reciprocal Protection of Investment, dated July 2 ,1 9 9 7 , Art. 11(1). Instruments to which the US is not a party do not incorporate this qualification. See: e.g.. Energy Charter Treaty, Art. 10(3), Treaty between Papua New Guinea and the Federal Republic of Germ any Concerning the Encouragement and Reciprocal Protection of Investments, dated November 12, 1980, Art. 3(1) and Agreem ent between Japan and Hong Kong for the Promotion and Protection of Investment, dated May 1 5 ,1 9 9 7 , Art. 2(2-3).
16 ) UNCTAD, Series on Issues in International Investment Agreements: National Treatment, 33. 17 ) So also: Dolzer and Stevens, Bilateral Investment Treaties, 63.