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NINTH ANNUAL GROTIUS LECTURE
The lecture began at 4:15 p.m., Wednesday, March 28,
and was given by !seph "tiglit# !$ %!lumbia &niversity'
the discussant was (achel )yte !$ the *nternati!nal
+inance %!rp!rati!n.
MULTINATIONAL CORPORATIONS: BALANCING
RIGHTS AND RESPONLIBILITIESBy Joseph E. Stiglitz*
THE IMPORTANCE OF CORPORATIONS AND THE
PROBLEMS THEY PRESENT
n increasing $racti!n !$ c!mmerce within each c!untry
is c!nducted by c!rp!rati!ns which are !wned and
c!ntr!lled $r!m !utside its b!rders and which !$ten c!nduct
business in d!#ens !$ c!untry. These c!rp!rati!ns have
br!ught en!rm!us bene$its-indeed, many !$ the bene$its
attributed t! gl!bali#ati!n, such as the cl!sing !$ the
n!wledge gap, the gap between devel!ping c!untries
which is even m!re imp!rtant than the gap in res!urces, isdue in n! small measure t! multinati!nal c!rp!rati!ns.
M!re imp!rtant tan the capital which c!rp!rati!ns bring 1are
the trans$er !$ techn!l!gy, the training !$ human res!urces,
and the access t! internati!nal marets.
*n recent years, especially $!ll!wing the c!llapse !$ the
initiative t! create a Multilateral greements !n *nvestment
/M*0 within the %3,2 there has been a pr!li$erati!n !$
bilateral investment treaties /*Ts0 and investment
pr!visi!ns within bilateral $ree trade agreements.64 /"!me
c!untries /such as *nd!nesia0 have even passed laws
pr!viding similar investment guarantees, !n their !wn.0
These agreements are purp!rtedly t! pr!vide greater
pr!tecti!n $!r invest!rs, thereby enc!uraging cr!ss-b!rder
)"M*7 T9& r!tius %(M9
)uliah dimulai puul 4:15 s!re , (abu, 28 Maret , dan
diberian !leh !seph "tiglit# dari %!lumbia &niversity ,
pembahas adalah (achel )yte dari *nternati!nal +inance
%!rp!rati!n .
;(&"9 M&7T*"*7 : )"*MT( 9) )W*
leh !seph . "tiglit# an>ian perdagangan bebas bilateral. ?/eberapa
negara /seperti *nd!nesia0 bahan mel!l!san undang
undang memberian >aminan investasi yang sama, pada
merea sendiri.0
1< University Professor at Columbia University and chair of its Committee on Global Thought; Chairman of the Brooks World Poverty Institute at ManchesteUniversity; and President of the Initiative for olicy !ialogue" This lecture dra#s heavily from Chater $ of %oseh &" 'tiglit() Making GlobalizationWork) *e# +orkW"W" *orton) -../" The author is indebted to %ose 0lvares) !an Choate) 1uke Peterson) !aniel 'te#art) and Chantal Thomas for helful assistance" 2inancial suorfrom the 2ord) Macarthur) and 3ockefeller Brothers 2oundations is gratefully ackno#ledged" 0fter the first of this lecture #as #ritten) Gus 4an ublished his imortanstudy)Investment Arbitration Treaty and Public Law) 56ford University Press) -..$) #hich aroaches the issues from a legal ersective) but comes to much of thesame critical vie# of these treaties" 7is book rovides a more systematic and comrehensive comilation and interretation of the cases"
*ndeed, in a c!untry lie china, sitting !n 1. trilli!n !$ reserves, there is little value t! the capital itsel$.2The initiative t! create an M* c!llapsed in ct!ber in 1@@8 when the +rench ;rime Minister 7i!nel !spin ann!unced his g!vernment was
withdrawing $r!m the tals. The devel!ping c!untries were w!rried that new !bligati!ns w!uld be imp!sed !n them and that the agreements w!uld themlittle bene$it. +!r additi!nal details, see . de !nAuieres, Retreat OverOECD Pact on Investment, +*. T*M", ct. 21, 1@@8. There is an interestingparallel with the $ailure !$ the multilateral trade tals: each was $!ll!wed by a pr!li$erati!n !$ bilateral agreements that were in general even m!redisadvantage!us t! the devel!ping c!untries.
3 These s!-called $ree trade agreements are n!t really $ree trade agreements but managed trade agreements. $ree trade agreements w!uld
eliminate n!t !nly tari$$s but als! n!n-tari$$ barriers and subsidies. !ne !$ the +Ts /s!-called +ree Trade greements0 d! that. +!r a $urther discussi!nsee, e.g., ";9 . "T*7*TB C . %9(7T, +*(, T(3 +( 77 /2DD50' ";9 . "T*7*TB, M)* 77*BT* W() /2DDE0.
4The number !$ such agreements has been increasing s! rapidly that it is hard t! eep trac. cc!rding t! the & %!n$erence !n Trade and
3evel!pment /&%T30, which tries t! m!nit!r them, the numbers alm!st d!ubled between 1@@5 and 2DD5, g!ing $r!m 1,22 t! 2,4@5. 3uring 2DD5, FD*Ts were c!ncluded. This is the $ewest c!ncluded in any year since 1@@5. These $igures !nly include *Ts, which mae up slightly less than hal$ !$ al*nternati!nal *nvestment greements /**0. &nited ati!ns, Development in International Investment greements in !""#$ ** M*T( . 2 /2DDE0.
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investment. There is t! date, little evidence that have d!ne
s!.5 ;art !$ the reas!ns is that they may in $act curtail
devel!pment strategies, in ways which are adverse t!
gr!wth. s the %7% /the & c!n!mic %!mmissi!n !n
7atin merica and the %aribbean0 c!ncluded, Gc!untries
!$ten $ind that they have assumed !bligati!ns which, $urther
d!wn the r!ad, will place limitati!ns !n their !wn
devel!pment pr!grams. G
E
This paper is c!ncerned with a set !$ m!re $undamental
issues. ven i$ it c!uld be established that *Ts lead t!
increased investment, and even i$ that investment c!uld be
sh!wn t! lead t! higher gr!wth, as measured by increased
3; /gr!ss d!mestic pr!duct0,F it d!es n!t mean that
s!cietal wel$are has been increased, especially !nce
acc!unt is taen !$ res!urce depleti!n and envir!nmental
degradati!n. These agreements are t! imp!se restraints !n
what g!vernment can d!-!r at least t! imp!se a high c!stt! their undertaing certain acti!ns. "!me !$ the activities
which may be c!nstrained may be imp!rtant $!r pr!m!ting
general s!cietal well-being-even i$ pr!$its !$ particular $irms
are a$$ected adversely. *t is this p!ssibility which has made
these agreements a sub>ect !$ such c!ncern and debate.
These agreements are, !$ c!urse, n!t all identical' what
they d! is itsel$ a sub>ect !$ s!me c!ntr!versy. 7ie any
agreements, it depends !n the interpretati!ns !$ particular
w!rds, and the >udicial pr!cesses thr!ugh which these
w!rds are given meaning are !ne !$ the s!urces !$
;er>an>ian ini !n!n untu memberian perlindungan yang
lebih besar bagi invest!r , sehingga mend!r!ng investas
lintas - perbatasan . da sampai saat ini, sediit but
bahwa telah melauannya . agian dari alasan adalah
bahwa merea mungin sebenarnya mengurangi strateg
pembangunan , dengan cara-cara yang merugian
pertumbuhan . "ebagai %7% / )!misi !n!mi ;untu meria 7atin dan )aribia 0 menyimpulan , ? negara-
negara sering menemuan bahwa merea telah
mengasumsian ewa>iban yang , lebih lan>ut di >alan , aan
menempatan pembatasan pada pr!gram pembangunan
merea sendiri . ?
Tulisan ini beraitan dengan serangaian masalah yang
lebih mendasar . ahan >ia itu dapat ditetapan bahwa
*T" menyebaban peningatan investasi , dan bahan >ia
investasi yang bisa terbuti menyebaban pertumbuhan
yang lebih tinggi , yang diuur dengan peningatan ;3
/ pr!du d!mesti brut! 0 , itu tida berarti bahwaese>ahteraan s!sial telah meningat , terutama setelah
aun diambil dari penipisan sumber daya dan degradas
lingungan . ;er>an>ian ini untu memasaan pembatasan
pada apa yang pemerintah bisa lauan - atau setidanya
untu memasaan biaya tinggi untu melauan tindaan
tertentu merea. eberapa egiatan yang dapat dibatas
mungin penting untu mempr!m!sian s!sia
ese>ahteraan umum - bahan >ia euntungan perusahaan
tertentu yang terpengaruh. *ni adalah emunginan ini yang
telah membuat per>an>ian ini men>adi sub>e perhatian dan
perdebatan tersebut .
;er>an>ian ini , tentu sa>a , tida semua identi, apa yang
5 "ee M 9allward-3remerier, 3! ilateral' *nvestment Treaties $$ect +3*H nly a it and They %!uld ite, ;!licy (esearch ;aper !. 121
Washingt!n, 3%: W!rld an, ugust 2DD. &%T3 $!und similar results in Bilateral Investment %reatiesin the &id'())"s/1@@80. While s!me studieshave c!me t! the !pp!site c!nclusi!n. The weight !$ the evidence is !n the side that these agreements have had little i$ any e$$ect. The article by .eumayer and 7. "pess, Do Bilateral Investment %reaties Increase oreign Direct Investment to Developing Co+ntries, / W(73 3I. 15EF-85/2DD500 $!und a p!sitive c!rrelati!n between *Ts and +3*. The article by . "alcuse and . "ullivan, Do BI%s Really -or, n Eval+ation o/ BilateraInvestment%reaties and 0rand Bargain/4E 9(I. *T67 7. . 4E EF-1D /2DD500, als! $!und a p!sitive c!rrelati!n. ut !ther auth!rs have $!und theresults disappear when the sample is altered, andJ!r when *T characteristics are c!ntr!lled $!r. br!ader study by T!bin and (!se-cerman, $!rinstance, $!und n! p!sitive e$$ects. "ee T!bin C ". (!se-erman, +!reign 3irect *nvestment and the usiness nvir!nment in 3evel!ping %!untriesThe *mpact !$ ilateral *nvestment Treaties, =ale %enter $!r law, c!n!mics and ;ublic ;!licy, W!ring ;aper !. 2@, 2DD4, cited in). ;. allagher CM. . 7. irch, Do Investment greements ttract Investment,Evidence /rom 1atin merica, F . W(73 *I. C T(3 @E1-F4 /2DDE0. What is clea$r!m literature is that there is n! c!mpelling evidence that these bilateral investment agreements have an ec!n!mically, !r statistically, signi$icant e$$ec!n gr!wth, let al!ne s!cietal wellbeing. This paper will pr!vide part !$ the eKplanati!n $!r why that may be s!. +!r a current bibli!graphy !n this issue
see . %!sby. G*nternati!nal *nvestment greements and "ustainable 3evel!pment: chieving the Millennium 3evel!pment !als,L *nternati!na*nstitute $!r "ustainable 3evel!pment, Winnipeg, %anada, "eptember 2DD5, availa2le athttpwww.iisd.!rgJpd$J2DD5JinvestmentNiias.pd$O.
6oreign Investment in 1atin merica and the Cari22ean !"""$"antiag!, %hile: &nited ati!ns, une 2DD1, p. 15.
7 n increase in $!reign investment might n!t lead t! higher gr!wth i$, $!r instance, $!reign investment displaced d!mestic investment. *t is
imp!rtant, !$ c!urse, t! measure gr!wth appr!priately, taing int! acc!unt the depleti!n !$ natural res!urces and the degradati!n !$ the envir!nmentM!re!ver, c!untries sh!uld $!cus n!t !n 3; /which m!st !$ the empirical studies d!0, but !n ;/et ati!nal ;r!duct0. The $!rmer l!!s at !utputpr!duced within a c!untry. *$ !utput g!es up, but all !$ the resulting increased inc!me g!es t! $!reigners, it !bvi!usly is !$ little bene$it t! the citi#ens !$the c!untry. &sing these c!ncepts, it is even easier t! see h!w $!reign investment c!uld increase but the well-being !$ the citi#ens decrease. Some othe mines in Pa!a Ne" G!inea# fo$ instan%e# %a!se& si'nifi%ant en(i$onmenta) &e'$a&ation* the )o"# r!yalties the c!untry received may n!have been en!ugh t! c!mpensate $!r this damage.
There is an!ther dimensi!n t! s!cietal well being ab!ut which we will have little t! say: $!reign investment can lead t! an increase in ineAualitystandard measures !$ 3; per capita l!! !nly at averages. Median inc!me c!uld be going down even as average increase, so most citizens on the countrycould be made worse o! "ines which #ollute can decrease incomes o #oor ishermen, even i the mines create a ew high #aying $obs!
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dissatis$acti!n with the agreements. 3i$$erent arbitrati!n
panels have interpreted even the s!me w!rd di$$erently,
creating a high level !$ uncertainty, b!th am!ng
g!vernments and invest!rs, ab!ut eKactly what these
agreements d!.8This article is $!cused n!t !n any speci$ic
agreements, which g!es substantially bey!nd pr!tecti!n
against eKpr!priati!n.
Many !$ the greements-including s!me !$ their m!st
c!ntr!versial aspect-are c!ncerned with the $ar br!ader
issue !$ what happens when changes in regulati!n !r !ther
g!vernment p!licies adversely a$$ect the value !$ a $!reign-
!wned asset.@ The agreements d! n!t, !$ c!urse, st!p
g!vernment $r!m changing regulati!ns, taKes, !r !ther
g!vernment p!lices' but they may reAuire that the
g!vernments c!mpensate th!se that are adversely
a$$ected, and in d!ing s!, they increase the c!sts !$
g!vernments changing regulati!ns and !r !ther
g!vernments p!licies. /*t sh!uld be clear that these
agreements are n!t symmetric: many g!vernments p!liciesand investment lead t! unanticipated increases in the value
!$ assets. ut while c!mpanies demand c!mpensati!n
when there is a change that l!wers asset values, they d!
n!t !$$er t! give the g!vernment bac the increase in value
$r!m these p!sitive changes. *ndeed, attempts by the
g!vernment t! capture the increase in value that result $r!m
g!vernment acti!ns that might p!sitively impact the value !$
the assets might themselves be sub>ect t! invest!r suits,
unless such recapture is guaranteed in the treaty itsel$.1D0
!vernments, !$ c!urse, are c!nstantly changing
regulati!n, and !ther p!licies, and maing investments
which have a variety !$ impacts !n $irms. The general
stance in all s!vereigns, especially in dem!cracies, is that it
sh!uld be the right !$ each g!vernment t! maes these
merea lauan itu sendiri merupaan subye beberapa
!ntr!versi . "eperti per>an>ian apapun, itu tergantung pada
interpretasi dari ata-ata tertentu , dan pr!ses peradilan d
mana ata-ata ini diberi mana adalah salah satu sumbe
etidapuasan dengan per>an>ian . ;anel arbitrase berbeda
telah mena$siran bahan beberapa ata yang berbeda
menciptaan tingat etidapastian yang tinggi , bai d
alangan pemerintah dan invest!r , tentang apa per>an>iantersebut dilauan. rtiel ini tida ber$!us pada per>an>ian
tertentu , yang ber>alan secara substansial di lua
perlindungan terhadap pengambilalihan
anya ;er>an>ian - termasu beberapa dari merea yang
paling !ntr!versial aspe - prihatin dengan masalah yang
>auh lebih luas dari apa yang ter>adi etia perubahan
peraturan atau ebi>aan pemerintah lainnya
mempengaruhi nilai aset mili asing. ;er>an>ian tida , tentu
sa>a , menghentian pemerintah dari perubahan regulasi
pa>a , atau ebi>aan pemerintah lainnya , tetapi merea
mungin meminta pemerintah meng!mpensasi mereayang terena dampa , dan dengan berbuat demiian
merea meningatan biaya pemerintah mengubah
peraturan dan atau ebi>aan pemerintah lain . / 9arus >elas
bahwa per>an>ian ini tida simetris : . )ebi>aan banya
pemerintah dan investasi menyebaban enaian ta
terduga dalam nilai aset Tapi sementara perusahaan
menuntut !mpensasi bila ter>adi perubahan yang
menurunan nilai aset , merea tida menawaran untu
memberian pemerintah embali enaian nilai dar
perubahan-perubahan p!siti$ . Memang , upaya pemerintah
untu menangap enaian nilai yang dihasilan dar
tindaan pemerintah yang mungin berdampa p!siti$ nila
aset mungin sendiri dienaan paaian invest!r , ecual
merebut embali seperti di>amin dalam per>an>ian itu sendir
. 0
;emerintah , tentu sa>a , yang terus berubah regulasi , dan
%The m!st n!t!ri!us eKamples inv!lved arbitrati!n !$ cases in rgentina and %#ech (epublic. "ee $n. @ bel!w. n!ther eKample is pr!vided by
decisi!ns c!ncerns standards !$ c!mpensati!n. While m!st panels have ruled against c!mpensati!n $!r l!st pr!$its, in the $am!us )araha !das case in*nd!nesia, a "wiss ;anel awarded P1@ milli!n t! the private party /including P58 milli!n interest0. while the !riginal investment was !nly P111 milli!n/"ee )urniawan, M!ch. G;ertamina sh!uld pay c!mpensati!n t! )araha: eKperts.L Jaarta Post, March 2D, 2DD2 and 7*=, 9 and T&+9*3=T. G;ertamina settles p!wer dispute.L %he inancial %imes, March 22, 2DDF. %!mpanies6 *nternati!nal p 1E. /The l!st pr!$its may have been
particularly large in this case, because p!ssible c!rrupti!n in the award !$ the c!ntract under "uhart!-!ne !$ several aspects !$ the case that might itparticular galling t! *nd!nesians. "! t!! was the view that they had been enc!uraged by !utside advisers t! cancel the disadvantage!us, and p!ssiblec!rrupt, c!ntract. +!r additi!nal in$!rmati!n, seehttp:JJwww.arahab!-das.c!mJ legalp!int.phpO0.
&There are imp!rtant Auesti!ns even !$ what that means, !n which * shall c!mment brie$ly bel!w, ls!, as * have already c!mmented, and * eKplain
in greater detail bel!w, there is !ng!ing c!ntr!versy ab!ut what these agreements really d! entail. The persistence !$ this ambiguity is itsel$ a $law, inpart related t! de$ects in the dispute res!luti!n mechanism, als! discussed bel!w.
1'+!r imp!rtance, i$ the g!vernment builds a highway near a piece !$ land, the value !$ the land may increase en!rm!usly: a wind$all gain t! the
land!wner. *$ the g!vernment is unable t! appr!priate $!r itsel$ these gains, it my have insu$$icient incentives /!r res!urces0 $!r undertaing these valueenhancing investments. =et while $irms insist !n being c!mpensated when the g!vernment taes acti!ns which decrease the value !$ their pr!perty,they are less enthusiastic ab!ut sharing that arise $r!m g!vernment acti!ns' investment agreements may even preclude such attempts, unless theg!vernment has imp!sed /in a presumably G$air and eAuitableL and Gn!n-discriminat!ryL manner0 a capital gains taK. *mp!sing taKes that w!uld recapturethe gains w!uld have the $urther advantage !$ disc!uraging l!bbying /!r !utright c!rrupti!n0 t! pass legislati!n !r t! mae investments that increaseasset values.
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changes, with!ut paying c!mpensati!n $!r any resulting
changes in the value !$ assets. *n the &nited "tates, the
debate has cantered !n regulat!ry taings, with anti-
envir!nmentalists arguing $!r c!mpensati!n. They n!w
that by increasing the c!st !$ envir!nmental regulati!ns,
they will reduce their sc!pe. 11They have argued that the
%!nstituti!n pr!tects against the arbitrary taing !$ pr!perty
with!ut $ull c!mpensati!n, and they have c!ntended thatsuch taings sh!uld even then be highly restricted, e.g. t!
the c!nstructi!n !$ r!ads. 9!wever, c!urts have
c!nsistently re>ected that view.12 *ndeed, in a highly
c!ntr!versial case, the "upreme %!urt sustained the right
!$ eminent d!main t! taings !r land $!r devel!pmental
purp!ses, in which the land taen w!uld subseAuently be
used by private parties. 1 3isapp!inted with these %!urt
rulings, c!nservatives and anti-envir!nmentalists have
turned elsewhere. *n s!me states, they have success$ully
passed initiatives t! pr!vide c!mpensati!n $!r regulat!ry
taings,14 th!ugh such initiatives have n!t yet been $ully
tested in the c!urts. They have intr!duced legislati!n int!%!ngress, but s! $ar, such legislati!n has $ailed t! pass,
th!ugh legislati!n reAuiring the dministrati!n analysis !$
any regulat!ry taing has been appr!ved.15 * was in the
%lint!n dministrati!n /as a member, and later, %hairman ,
ebi>aan lainnya , dan membuat investasi yang memili
berbagai dampa pada perusahaan . "iap umum dalam
semua penguasa , terutama di negara-negara dem!rasi
adalah bahwa hal itu harus men>adi ha masing-masing
pemerintah untu membuat perubahan ini , tanpa
membayar !mpensasi atas perubahan yang ter>adi dalam
nilai aset . 3i meria "eriat , perdebatan telah cantered
pada pengambilalihan peraturan , dengan anti - lingunganhidup berdebat untu !mpensasi . Merea tahu bahwa
dengan meningatan biaya peraturan lingungan , merea
aan mengurangi ruang lingup merea . Merea
berpendapat bahwa )!nstitusi melindungi terhadap
pengambilan sewenang-wenang pr!perti tanpa !mpensas
penuh , dan merea telah berpendapat bahwa
pengambilalihan tersebut harus bahan emudian men>ad
sangat dibatasi , misalnya untu pembangunan >alan
amun, pengadilan telah secara !nsisten men!la
pandangan itu. Memang , dalam asus yang sanga
!ntr!versial , Mahamah gung berelan>utan ha d!main
teremua untu pengambilalihan atau tanah untu tu>uanpembangunan , di mana tanah diambil emudian aan
digunaan !leh piha swasta . )ecewa dengan putusan
Mahamah ini , !nservati$ dan anti - lingungan hidup
telah berubah di tempat lain . 3i beberapa negara , merea
11T! be $air, s!me !$ the adv!cates !$ regulat!ry taings pr!visi!ns see it as n!t >ust instrumental /i.e. reducing the sc!pe $!r regulat!ry taings wil
enhance ec!n!mic e$$iciency0 but believe that such pr!visi!ns are necessary $!r a >ust s!ciety /it is +n/air$in s!me $undamental sense, t! deprive pe!ple!$ their pr!perty' partial deprivati!n thr!ugh regulati!n is als! $undamentally un$air0. We shall discuss these brie$ly bel!w /c$. discussi!n !$ endangeredspecies0.
12The supreme c!urt has utili#ed a three-pr!ng test, devel!pment in ;enn %entral Transp!rtati!n %!. v. %ity !$ ew =!r, 48 &.". 1D4 /1@F80
/which reviewed and upheld a landmar preservati!n law which placed restricti!ns !n the ability !$ !wner !$ landmar buildings appearances in anumber !$ ways0 t! analy#e when regulati!n has g!ne Gt!! $ar,L c!nstituting a taling and there$!re reAuiring c!mpensati!n $r!m the !vernment. These
$act!rs are: the character !$ the g!vernment acti!n, the ec!n!mic impact !$ the regulati!n !n the land!wner, and the distinct investment-bacedeKpectati!ns !$ the land!wner. 7aws and regulati!ns that $!cus !n restricting public nuisance, and pr!tecting the health and sa$ety !$ the c!mmunityhave n!t reAuired c!mpensati!n. "ee, e.g., 9adachec v. "ebastian, 2@ &.". @4, 41D-12 /1@150 /barring bric manu$acturers $r!m residential areas0Iillage !$ uclid v. mbler (ealty %!mpany /1@2E0 was the $irst case t! review and uph!ld municipal #!ning regulati!ns. "ubseAuently, in erman v;arer /1@540, the "upreme %!urt ruler that private pr!perty c!uld be taen $!r public purp!se rather than simply public use. This case led t! !thecases which all!wed cities t! eKercise eminent d!main !ver blighted neighb!rh!!ds.
13"ee )el! v. %ity !$ ew 7!nd!n, %!nn., 545 &.". %!nstituti!n, in the c!nteKt !$ eminent d!main. The %!urt6s decisi!n that taing !$ private
pr!perty t! trans$er c!mpanies /primarily ;$i#er0 in !rder t! b!!st ec!n!mic devel!pment in the %ity was c!ntinues t! generate great !pp!siti!n.
14These regulat!ry taings initiatives have $!und success in reg!n in 2DD4, with the passing !$ Measure F, reAuiring >ust c!mpensati!n $!r any
land use regulati!n passed a$ter the statute was implemented' and als! in ri#!na in 2DDE, when v!ters !verwhelmingly supp!rted ;r!p!siti!n 2DF/cited as the G;rivate ;r!perty (ights ;r!tecti!n rcL0,. 9!wever, initiatives $ailed t! garner su$$icient v!ter in Washingt!n /*nitiative @0, %ali$!rnia/;r!p!siti!n @D0, and *dah! /;r!p!siti!n 20.
The initiative in reg!n has $aced legal challenge in reg!n %!urts. lth!ugh plainti$$s attempting t! !verturn Measure F gained success in the
l!wer c!urts, the reg!n "upreme %!urt $!und measure c!nstituti!nal, and reversed this decisi!n, there$!re clearing the way $!r the initiative t! c!ntinue$uncti!ning. "ee Mac;hers!n v. 3ept. !$ dministrative ;urp!se, 4D r. 11F, 1D ;.d D8 /r. 2DDE0.
"ince the )el! case 2E states have enacted bills restricting the sc!pe !$ )el!. *n states a c!nstituti!nal amendment reducing the sc!pe wasrati$ied, and additi!nal 2 states legislati!n passed bills !nly t! have them vet!ed by the g!vern!r. The ati!nal %!n$erence !$ "tates 7egislaturesmaintains a list !$ passed billsJamendments at: http:JJwww.ncsl.!rgJpr!gramsJnatresJannualmtgupdateDE.htm.s an eKample, the states !$ *llin!is "D8E:L;r!hibits the use !$ eminent d!main t! c!n$er a bene$it !n a particular private entity !r $!r a public use that is merely a preteKt $!r c!n$erring abene$it !n a particular private entity. 7imits the use !$ eminent d!main $!r private devel!pment unless the area is blighted and state !r l!cal g!vernmenhas entered int! a devel!pment agreement with a private entity.L
15%!ngress passed the Treasury, ;!stal "ervices and eneral !vernment ppr!priati!ns ct, 1@@F /;ub. 7. No. 104-208, 645, 110 Stat. 3009
(1997)) in 1997, requiring the office of anage!ent an" #u"gett! prepare a detailed analysis !$ the c!sts and bene$its !$ each regulat!ry acti!n !$the +ederal !vernment. There have been series !$ 9!use bills in the 1D@ th%!ngress attempting t! implement greater limits !n eminent d!main andregulati!n by $ederal g!vernment: h!wever, these pr!p!sals have all died in the "enate. "ee ;rivate ;r!perty (ights ;r!tecti!n ct 2DD5, 9.(. 41281D@th%!ng. /2DD50' Threatened and ndangered "pecies (ec!very ct, 9.(. 824, 1D@ th%!ng. /2DD50' ;rivate ;r!perty (ights *mplementati!n ct9.(. 4FF2, 1D@th%!ng. /2DDE0
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have !btained had there been an !pen and public
discussi!n.18 *$ the &."., in ad!pting such an agreement,
was n!t $ully aware !$ its imp!rt, this is even m!re liely t!
be the case in devel!ping c!untries.1@62D
The c!nseAuences are >ust bec!ming apparent, as the
number !$ suits under these agreements has s!ared. nerecent c!unt has the number !$ cases under arbitrati!n as
eKceeding 2DD since the mid 1@8Ds-entailing claims !$ tens
billi!ns !$ d!llars.21
*n this paper, * want t! $!cus !n s!me $!undati!nal
issue:
a0 *s there a need $!r internati!nal ec!n!mic
agreements c!ncerning the regulati!n !$ multinati!nal
c!rp!rati!nsH
b0 *$ there is, what sh!uld be the sc!pe $!r such
multinati!nal agreements, and what gl!bal instituti!nalarrangements might be m!st e$$ectiveH
c0 *n particular, sh!uld g!vernment have the right t!
restrict entry !$ c!rp!rati!ns /as !pp!sed t! pe!ple !r
capital0 $r!m abr!adH "h!uld they have the right t!
insist !n inc!rp!rati!n inside their !wn c!untryH
d0 Wh! sh!uld be pr!tected by such agreementsH
e0 What sh!uld be the eKtent !$ pr!tecti!n !$ pr!perty
against changes in regulati!n, taKati!n, !r !ther
g!vernment p!liciesH What sh!uld be the standard !$
c!mpensati!nH
$0 "h!uld these agreements be m!re balanced, imp!sing
resp!nsibilities as well as right, and enhancing the
ability !$ h!st c!untries t! imp!se sancti!ns against
th!se that $ail t! live t! their resp!nsibilitiesH
g0 re there legitimate reas!ns that a c!untry might t!
discriminate between $!reign and d!mestic $irmsH
"h!uld investment treaties be limited t! pr!hibiting
such discriminati!nH What are the c!sts and bene$its !$
such a restricti!nH
diberitahu tentang risi! pena$siran semacam itu . 3
bagian >alur cepat beriutnya di )!ngres , masalah >uga
tida mendapatan banya , >ia ada , disusi. *ni meny!r!t
satu di riti utama dari per>an>ian - bahwa merea , di alam
merea , tida dem!ratis' bahwa, memang , bahwa saya
men>adi alasan utama merea : untu menghindari pr!ses
dem!rasi yang n!rmal dan untu mendapatan
perlindungan bagi invest!r bahwa merea tida aanpernah diper!leh telah ada men>adi disusi terbua dan
publi. ia " , dalam mengad!psi esepaatan tersebut
tida sepenuhnya menyadari imp!r , ini bahan lebih
mungin ter>adi di negara-negara berembang .
)!nseuensi hanya men>adi >elas , arena >umlah paaian
di bawah per>an>ian ini telah mel!n>a . "atu c!unt baru-
baru ini memilii >umlah asus di bawah arbitrase sebaga
melebihi 2DD se>a pertengahan 1@8D-an laim - yang
melibatan puluhan miliar d!lar.
3alam tulisan ini , saya ingin $!us pada beberapa isumendasar
a0 paah ada ebutuhan untu per>an>ian e!n!m
internasi!nal tentang regulasi perusahaan multinasi!nal H
b 0 ia ada , apa yang seharusnya men>adi ruang lingup
per>an>ian multinasi!nal seperti itu, dan apa pengaturan
elembagaan gl!bal yang mungin paling e$eti$ H
c 0 "ecara husus , pemerintah harus memilii ha untu
membatasi masunya perusahaan / sebagai lawan dar
!rang atau m!dal 0 dari luar negeri H 9arusah merea
memilii ha untu menuntut penggabungan di dalam
negeri merea sendiri H
d 0 "iapa yang harus dilindungi !leh per>an>ian tersebut H
e 0 pa yang harus men>adi tingat perlindungan ha mili
terhadap perubahan peraturan , perpa>aan , atau
ebi>aan pemerintah lainnya H pa yang harus men>ad
standar !mpensasi H
$ 0 ia per>an>ian ini men>adi lebih seimbang , memasaan
tanggung >awab serta ha , dan meningatan emampuan
1% thers have c!me t! similar c!nclusi!ns. +!r instance, M. 9allward-3riemeier, op cit, $n E: G*n additi!n t! the si#e !$ the awards and the
c!nstraints placed !n p!licymaers, s!me merican critics are c!ncerned that %hapter leven is causing an Gend runL ar!und the c!nstituti!n an aredecidedly antidem!cratic-the terms and c!nseAuences !$ %hapter leven were never publici#ed !r debated pri!r t! signing' that there is n! r!!m $!public c!mment !r even public scrutiny !$ the arbitrati!n pr!cedures' and limited mechanism $!r appeal.L
1&"ee $!r instance the statement !$ ;aistan6s tt!rney eneral at *%"*3 cited in *nvestment Treaty ews, published by the *nternati!nal *nstitute
$!r "ustainable 3evel!pment, 3ecember 1, 2DDE, available athttp:JJwww.iisdJ!rgJpd$J2DDEJitnNdecN2DDE.pd$.
2'*nterestingly, as this article g!es t! press, the investment pr!visi!ns !$ the )!rea-&" bilateral trade agreement have bec!me !ne !$ the ma>!
$!cal p!ints !$ !pp!siti!n. * have had discussi!ns with very seni!r g!vernment !$$icials !$ a small sian c!untry which is under pressure t! sign abilateral investment agreement with the &.". They t!! have gradually bec!me aware !$ the pr!blems !$ these agreements-within the regi!n, theeKperience !$ *nd!nesia, discussed earlier, seems particularly salient. They were, h!wever, n!t c!n$ident that they c!uld resist merican p!liticapressure.
21"ee the &%T3 study at http:JJwww.unctad.!rgJenJd!csJweb s ite it2DD52-en.pd$. lth!ugh investment treaties have been neg!tiated since the
late 11@5Ds, there is n! public evidence !$ their having been used in arbitrati!ns pri!r t! the mid 1@8Ds. Tw! cases al!ne th!se by the ma>!rityshareh!lder !$ =u!s against (ussia and th!se by disgruntled b!ndh!lders against rgentina inv!lve claims !$ m!re than a billi!n d!llars each.+!r a discussi!n !$ the eKp!nentially increasing r!le !$ litigati!n in addressing trade disputes, speci$ically at the WT, see . eattie, +r!m a Tricle t! a+l!!d-9!w 7awsuits are %!ming t! 3ictate the Terms !$ Trade,L inancial %imes, Mar. 2D 2DDF, at 1.
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h0 *$ the reAuisite gl!bal instituti!nal arrangements can n!t
be created /at least in the sh!rt run0, what can !r
sh!uld individual c!untries d!H
i0 When there are disputes-as there inevitably be-h!w
sh!uld such disputes be res!lvedH
The entire discussi!n is in$!rmed by m!dern ec!n!mic
the!ry, which has helped clari$y the r!le !$ marets and
g!vernment, including the imp!rtance, and limitati!ns, !$
pr!perty right. *n this sense, this paper is a c!ntributi!n t!
the general the!ry !$ law and ec!n!mic, but it lies !n
$!undati!ns that are maredly di$$erent $r!m the
pred!minant %hicag! G7aw and ec!n!micL sch!!l,22which
sees legal instituti!ns as part !$ a system designed t!
ensure e$$iciency, pr!m!ted m!st e$$ectively thr!ugh $ree
maret c!mpetiti!n c!mbined with secure pr!perty right. 2
The last Auarter century has seen a re-eKaminati!n, and are>ecti!n, !$ the ec!n!mic $!undati!ns !n which this the!ry
rests, and the creati!n !$ a new paradigm, based !n
imper$ect in$!rmati!n and inc!mplete marets. *n this new
paradigm,24 marets by themselves are n!t, in general,
e$$icient, and g!vernment interventi!n /s!metimes even
Auite limited interventi!ns, such as circumscribing c!n$licts
!$ interests, as in the case !$ auditing250can lead t! wel$are
impr!vements.2E 7aws and regulati!n are, h!wever, n!t
!nly directed at impr!ving e$$iciency but als! at pr!m!ting
negara-negara tuan rumah untu men>atuhan sans
terhadap merea yang gagal untu hidup dengan tanggung
>awab merea H
g 0 paah ada alasan yang sah bahwa sebuah negara
bisa membedaan antara perusahaan asing dan
d!mesti H 9arusah per>an>ian investasi dibatasi untu
melarang disriminasi tersebut H paah biaya dan
man$aat dari pembatasan seperti ituHh0 ia diperluan pengaturan elembagaan gl!bal yang
tida dapat diciptaan / setidanya dalam >anga pende 0
apa yang dapat atau harus dilauan masing-masing
negara H
i 0 ila ada sengeta - arena ada pasti men>adi -
bagaimana seharusnya perselisihan tersebut diselesaian H
"eluruh disusi diin$!rmasian !leh te!ri e!n!mi m!dern
yang telah membantu memper>elas peran pasar dan
pemerintah , termasu pentingnya , dan eterbatasan , ha
pr!perti . 3alam hal ini , maalah ini merupaan !ntribuste!ri umum huum dan e!n!mi , tetapi terleta pada
$!ndasi yang sangat berbeda dari d!minan %hicag!
9uum dan e!n!mi ? se!lah , yang menempatan
institusi huum sebagai bagian dari sebuah sistem yang
dirancang untu memastian e$isiensi , dipr!m!sian paling
e$eti$ melalui !mpetisi pasar bebas di!mbinasian
dengan ha eayaan aman . "eperempat abad terahir
telah melihat pemerisaan ulang , dan pen!laan , $!ndas
e!n!mi yang te!ri ini bersandar , dan penciptaan sebuah
22This set !$ the!ries has been m!st $!rce$ully articulated in the w!rs !$ (ichard ;!sner. "ee (. ;!sner, Economic nalysis o/1a3, Fth ed.
W!lters )luwer 7aw and usiness, 2DDF, and (. ;!sner and c!n!mics, I!ls *-***., c!-edited with +. ;arisi, sward lgar ;ublishing, 1@@F.
23This sch!!l typically als! sees there being str!ng ec!n!mic $!rces t! maintain c!mpetiti!n /s!, $!r instance, there is little need $!r anti-trust
acti!n0. +!r eKample, even when there is a natural m!n!p!ly /a single $irm d!minates the maret, because !$ increasing returns t! scale0, c!mpetiti!n/orthe maret-t! be that single $irm-is s! str!ng that e$$iciency is ensured. "ee W. aum!l, ;an#ar, and (. Willig, Contesta2le &aret 4 the %heory oInd+stry Str+ct+re, cademic ;ress, 1@@8. 7ie much !$ the rest !$ this the!ry, it rests !n wea $!undati!n: i$ there are even arbitrarily small sun c!ststhen marets are n!t c!ntestable' p!tential c!mpetiti!n d!es n!t su$$ice t! ensure ec!n!mic e$$iciency. "ee, e.g. . +arell, G%heap Tal, %!!rdinati!nand ntry$5 Rand Jo+rnal o/ Economics, 18/10, "pring 1@8F,, 4-@, . . "tigli#t, GTechn!l!gical %hange, "un %!sts, and %!mpetiti!n,L BrooingsPapers on Economic ctivity, , 1@8F, /als! in special issue !$ &icroeconomics, M. . aily and %. Winst!n /eds.0, 1@88, pp. 88-@4F0' and ;. 3asguptaand . . "tiglit#, G;!tential %!mpetiti!n, ctual %!mpetiti!n and c!n!mic Wel$are,L E+ropean Economic Revie3, 2, may 1@88, pp. 5E@-FF.
24+!r an eKp!siti!n, see . . "tilit# G*n$!rmati!n and the %hange in the ;aradigm in c!n!mic,G in 1es Pri6 7o2el Prizes !""(, T!re +rangsmy
/ed.0, The !bel +!undati!n, pp. 4F2-54D abbreviated versi!n in, merican Economic Revie3, @2/0, une 2DD2, pp. 4ED-5D1. "ee bel!w $!r aeKtensive discussi!n !$ the limitati!ns !$ the G!ldL paradigm.
25"ee "arbanes-!Kley ct !$ 2DD2, ;ub. 7. !. 1DF-2D4, 11E "tat. F45 /c!di$ied as amended in scattered secti!ns !$ 11, 15, 18, and 2@ &.".%.0
"ecti!n 2D1 c!ncern what !ther business the audit!r can per$!rm with an audited c!mpany. They are prevented $r!m pr!viding the Gissuerc!ntemp!rane!usly with the audit, any n!n-audit service.L
26
This revisi!nist view has als! changed perspective !n !ther n!n-maret instituti!ns. ;revi!usly, s!me had argued that n!n-maret instituti!ns
ar!se t! address maret $ailures /see, e.g. 3. !rt, Str+ct+re and Change in Economic 8istory, ew =!r: WW !rt!n, 1@81.0 +!r instance, because !m!ral ha#ard, marets pr!vide !nly limited insurance, and gaps in maret insurance are $illed in, in part, by n!n-maret instituti!ns, lie $amilies. ;uttingaside the $uncti!nalist $allacy, a cl!ser analysis !$ the interacti!ns between these n!n-maret instituti!ns and marets sh!ws that they may, in $act, bedys$uncti!nal' that is, while they may arise t! $ill in h!les le$t by the maret, marets resp!nd t! these n!n-maret instituti!ns, with the net result that the!verall level !$ insurance, and ec!n!mic wel$are, may be decreased: the n!n-maret instituti!ns, which are less e$$icient in ris sharing than the maretinstituti!ns, cr!wd !ut the maret instituti!ns. "ee (. rn!tt and . . "tiglit#, GM!ral 9a#ard and !n-Maret *nstituti!ns: 3ys$uncti!nal %r!wding ut !r;eer M!nit!ring,L merican Economic Revie3, 81/10, March 1@@1, pp. 1F@-@D. !rth6s m!re recent w!rs, Instit+tions$ instit+tional Change andEconomic Per/ormance, %ambridge &niversity ;ress, 1@@D and 9nderstanding the Process o/ Economic Change , ;rincet!n &niversity ;ress, 2DD5seem t! re$lect a rec!gniti!ns !$ the limitati!ns in the earlier view. +!r a br!ader discussi!n !$ these issue, see . . "tiglit#, G%hallenges in the nalysis!$ the (!le !$ *nstituti!ns in c!n!mic 3evel!pment,L in :illaBorsig -orshop Series !"""; %he Instit+tional o+ndations o/ a &aret Economy, udrun)!chend!r$er-7ucius and !ris ;les!vic /eds.0. erman +!undati!n $!r /3"0, 2DD1, pp. 15-28
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s!cial >ustice m!re br!adly de$ined, including pr!tecting
th!se wh! might !therwise n!t $are s! well in the maret
ec!n!my i$ le$t t! themselves. This helps eKplain legislati!n
and regulati!n designed t! pr!tect c!nsumers, w!rers,
and invest!rs. *n additi!n, there are s!me areas in which
rules are essential: every game, including the maret game,
reAuires rules and re$erees. There may be m!re than !ne
set !$ Ge$$icientL rules, but di$$erent rules have di$$erentdistributi!nal c!nseAuences. "!ciety, in selecting a set !$
rules t! regulate ec!n!mic behavi!r, has t! be mind$ul !$
these distributi!nal c!nseAuences.
*n the internati!nal setting, seeming symmetric /!r G$airL0
rules !r agreements may have asymmetric /!r Gun$airL0
e$$ects, because !$ the di$$erences in circumstances !$ the
c!untries t! which they apply, including di$$erences in their
p!litical !r ec!n!mic p!wer in en$!rcement, !r their abilityt! use p!litical p!wers t! eKtract $urther terms in an!ther
c!nteKt. When ntigua w!n ma>!r batter against &.".
restricti!ns !n !n-line gambling in the WT, there was n!
way it c!uld e$$ectively en$!rce it: imp!sing trade sancti!ns
w!uld have hurt ntigua $ar m!re than it w!uld have hurt
the &.". y c!ntrast, hat ntigua engaged in an un$air trade
acti!n against the &."., any sancti!ns t! the &.". against
ntigua w!uld have been p!wer$ul.2F$ter devel!ped and
less devel!ped c!untries have agreed t! a trade
liberali#ati!n agreement, $!r instance, the *M+ and the
W!rd an may insist that the devel!ping c!untry engage
in $urther liberali#ati!n, i$ it is t! receive a reAuested grant
!r l!an. drug c!mpany in the &.". will success$ully
pressure the &.". g!vernment t! put pressure !n a $!reign
c!untry that c!nsiders issuing a c!mpuls!ry license n!t t!
d! s!, even when the issuance !$ that license is t!tally
within the $ramew!r !$ the WT. This implies that !ne
cann!t l!! at the reas!nableness !$ any particular
agreement in is!lati!n $r!m a br!ader c!nteKt-!r even
assess its true impact.
We l!! at the laws relating t! c!rp!rate g!vernance
and banruptcy thr!ugh this perspective. We argue that
even a narr!w $!cus !n e$$iciency reAuires g!ing bey!nd
$ramew!rs that ensure shareh!lder value maKimi#ati!n,
but that when a br!ader perspective inc!rp!rating eAuity as
well as e$$iciency is taen, the case $!r alternative
$ramew!rs bec!mes even m!re c!mpelling. We argue that
*Ts may inter$ere with a c!untry6s ability t! devel!p a legal
paradigma baru , berdasaran in$!rmasi yang tida
sempurna dan pasar tida lengap . 3alam paradigma baru
ini , pasar sendiri tida , secara umum , e$isien , dan
intervensi pemerintah / adang-adang bahan intervens
sangat terbatas , seperti circumscribing !n$li
epentingan , seperti dalam asus auditing 0 dapa
mengarah pada peningatan ese>ahteraan . 9uum dan
regulasi , bagaimanapun , tida hanya diarahan untumeningatan e$isiensi tetapi >uga untu mempr!m!sian
eadilan s!sial yang lebih luas dide$inisian , termasu
melindungi !rang-!rang yang mungin tida tari$ sanga
bai dalam e!n!mi pasar >ia dibiaran sendiri . 9al in
membantu men>elasan undang-undang dan peraturan
yang dirancang untu melindungi !nsumen , peer>a , dan
invest!r . "elain itu, ada beberapa daerah di mana aturan
penting : setiap pertandingan , termasu pertandingan
pasar , membutuhan peraturan dan wasit . Mungin ada
lebih dari satu set ? e$isien ? aturan , tapi aturan yang
berbeda memilii !nseuensi distribusi yang berbeda
Masyaraat , dalam memilih seperangat aturan untumengatur perilau e!n!mi , harus sadar ini !nseuens
distribusi .
3alam pengaturan internasi!nal , simetris tampa / atau
$air ? 0 aturan atau per>an>ian mungin memilii asimetris
/ atau ? tida adil ? 0 e$e , arena perbedaan dalam
eadaan negara yang merea terapan , termasu
perbedaan dalam euasaan p!liti atau e!n!mi merea
di penegaan huum, atau emampuan merea untu
menggunaan euatan p!liti untu mengambil istilah
lebih lan>ut dalam !ntes lain . )etia ntigua
memenangan ad!nan besar terhadap pembatasan "
pada !n-line per>udian di WT , tida ada cara yang e$eti
bisa menegaannya : pemberian sansi perdagangan
aan menyaiti ntigua >auh lebih dari itu aan meluai y
!ntras " , t!pi ntigua terlibat dalam tindaan
perdagangan yang tida adil terhadap " , sansi apapun
terhadap " terhadap ntigua aan men>adi uat . "etelah
diembangan dan negara-negara urang berembang
telah sepaat untu per>an>ian liberalisasi perdagangan
misalnya , *M+ dan W!rd an mungin bersieras bahwa
negara berembang terlibat dalam liberalisasi lebih lan>ut
>ia ingin menerima hibah diminta atau pin>aman . "ebuahperusahaan !bat di meria "eriat aan berhasil menean
pemerintah " untu menean negara asing yang
mempertimbangan mengeluaran lisensi wa>ib untu tida
melauannya , bahan etia penerbitan lisensi yang
benar-benar dalam eranga WT . *ni berarti bahwa
sese!rang tida dapat melihat ewa>aran per>an>ian tertentu
dalam is!lasi dari !ntes yang lebih luas - atau bahan
menilai dampanya sebenarnya
27This ;articular pr!blem c!uld be remedied by all!wing trade sancti!ns t! be maretable. "ee, e.g. %harlt!n and "tiglit#, op. cit.
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$ramew!r maKimi#ing s!ciety6s s!cial wel$are.
We view *Ts thr!ugh tw! di$$erent lenses-as imp!sing
restrictions !n the ability !$ g!vernments t! imp!se certain
regulati!ns /!r t! change certain p!lices0, and as pr!viding
ins+rance t! th!se establishing businesses within a
>urisdicti!n against l!sses that might !ccur in the event !$such changes. *mp!sing restricti!ns !n their behavi!r may
reduce regulat!ry uncertainty /alth!ugh at a high c!st0, but
it may n!t be the best way t! reduce ris. s an alternative,
sh!uld the maret pr!vide insuranceH !rmally, $ree
maret adv!cates thin !$ marets as m!re e$$icient than
g!vernment in pr!viding insurance. *s there a rati!nale, in
this case, t! rely !n publicly pr!vided insuranceH We will
argue, h!wever, that the way that m!st *Ts have been
designed may actually be increasing at least s!me aspects
!$ ris: i$ ris mitigati!n were their primary !b>ective, they
have $ailed t! d! s! in either an e$$icient !r $air way.
#a$ic %er$&ecti'e$
The basic perspective * tae in this paper is the
$!ll!wing: it is hard t! thin !$ a success$ul merican
c!n!mic with !nly state laws and n! way !$ dealing with
cr!ss-b!rder disputes. We have devel!ped a $inely h!ned
system /alth!ugh n!t with!ut its $laws0 de$ining what states
may d!. The system is designed t! ensure that states d!
n!t inter$ere with interstate c!mmerce and that they d! n!t
give business privileges t! their residents at the eKpense !$
!utsiders, but, at the s!me time, t! pr!vide them latitude t!
pass regulati!ns and laws t! pr!tect their citi#en. h!st !$
c!mplicated issues are raised: d! minimum wage laws
inter$ere with interstate c!mmerce !r !therwise restrict
basic rightsH283! state envir!nmental laws s! d!H There
is, implicitly, a care$ul balancing. bvi!usly, any law can
a$$ect c!mmerce, and any law acti!ns which individuals
might !therwise undertae,. %learly, laws designed t!
inter$ere with interstate c!mmerce are n!t all!wed, but h!w$ar can !r sh!uld !ne g! in striing d!wn laws $!r which this
is s!me incidental e$$ectH "h!uld it be a matter !r principle,
which might, $!r instance, restrict any minimum wage
legislati!n !r any lab!r legislati!nH r a matter !$ >udging
the magnitude !$ the e$$ectH "imilar Auesti!n arise in
assessing whether such laws vi!late basic right t! c!ntract.
)ami melihat undang-undang yang beraitan dengan tata
el!la perusahaan dan ebangrutan melalui perspeti$ ini
)ami berpendapat bahwa bahan $!us sempit pada
e$isiensi memerluan melampaui eranga er>a yang
memastian masimalisasi nilai pemegang saham , tetap
etia sebuah perspeti$ yang lebih luas menggabungan
euitas serta e$isiensi diambil , asus untu eranga er>a
alternati$ men>adi lebih menari . )ami berpendapat bahwa*T" dapat mengganggu emampuan suatu negara untu
mengembangan ese>ahteraan s!sial eranga huum
memasimalan masyaraat
)ami melihat *T" melalui dua lensa yang berbeda -as
memberlauan pembatasan terhadap emampuan
pemerintah untu memberlauan peraturan tertentu / atau
untu mengubah ebi>aan tertentu 0 , dan menyediaan
asuransi untu !rang-!rang mendirian bisnis dalam
yurisdisi terhadap erugian yang mungin ter>adi dalam
hal perubahan tersebut . Menerapan pembatasan pada
perilau merea dapat mengurangi etidapastian regulas/mesipun dengan biaya tinggi 0 , tetapi mungin buan
cara terbai untu mengurangi risi! . "ebagai alternati$
sebainya pasar menyediaan asuransi H iasanya , para
penduung pasar bebas menganggap pasar sebagai lebih
e$isien daripada pemerintah dalam memberian asuransi
paah ada alasan , dalam hal ini , bergantung pada
asuransi yang diberian publi H )ami aan berpendapat
bagaimanapun , bahwa cara yang paling *T" telah
dirancang sebenarnya bisa meningat setidanya beberapa
aspe risi! : >ia mitigasi risi! adalah tu>uan utama
merea , merea telah gagal untu melauannya dalam
cara yang e$isien bai atau adil .
3asar ;erspeti$
;erspeti$ dasar saya ambil dalam maalah ini adalah
sebagai beriut : sulit untu memiiran suses meria
!n!mi dengan hanya huum negara dan tida ada cara
untu menangani perselisihan lintas batas . )ami telah
mengembangan sistem halus terasah / mesipun tida
tanpa $laws 0 mende$inisian apa yang menyataan dapa
dilauan. "istem ini dirancang untu memastian bahwa
negara tida mengganggu perdagangan antarnegara danbahwa merea tida memberian ha bisnis untu warga
merea dengan meng!rbanan !rang luar , tetapi , pada
beberapa watu , untu menyediaan merea lintang
melewati peraturan dan undang-undang untu melindung
merea warga negara . "e>umlah isu yang rumi
dibangitan : >angan undang-undang upah minimum
2%See, for instance, Lochner v New York, 198 U.S. 45 (1905) which struck own a New York state !aw !i"itin# the number !$ h!urs a bae
c!uld w!r each wee, !n the basic that the law was an Gunreasonable) unnecessary and arbitrary interference #ith the right and liberty of the individual tocontract8" Muller v 5regon) -.9 U"'" :- ; allo#ed restrictions on #omen #orking) because it #as vie#ed to a reasonable restriction" 2inally) West Coast 7oteCo" v Parrish) ?.. U"'" ?$= " allo#ed states to ass minimum #age la#s, in the end) both states and the federal government #ere allo#ed to ass such la#s"
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s we debate the Auesti!n inside the &nited "tates, there
are dem!cratic pr!cesses at play at all levels. *n principle, i$
states are en>!ined $r!m passing minimum wage laws, then
the +ederal g!vernment might be able t! d! s!. "! t!! $!r
!ther pieces !$ regulati!n. ut seri!us pr!blems may arise
when higher level b!dies imp!se restricti!n !n level
auth!rities, but th!se higher level auth!rities d! n!t
themselves have the right t! tae acti!n. regulat!ry gapmay arise.2@
"imilarly, as we m!ve t! a gl!bal ec!n!my, we will
need t! have legal $ramew!rs g!verning cr!ss b!rder
disputes,. There will be a need t! assess what regulati!nsc!nstitute an un$air restricti!n !n trade. ut un$!rtunately,
ec!n!mic gl!bali#ati!n has !utpaced p!litical gl!bali#ati!n:
we have n!t devel!ped the reAuisite dem!cratic
internati!nal instituti!ns, either $!r drawing up agreements
!r ad>udicating disputes. The internati!nal agreements we
have, $!r instance, in trade are the result !$ hard bargaining
behind cl!sed d!!r, with the interests !$ special interests in
the large and ec!n!mically d!minant c!untries /ur!pe and
the &.".0 prevailing.D
*Ts and the investment pr!visi!ns !$ +Ts have
attempted t! $ill in the gap, but they have d!ne s! in a way
which is $ar $r!m satis$act!ry. They are based !n an
inc!herent set !$ ec!n!mic principles, which leads t! a
$ailed understanding !$ the appr!priate r!le !$ nati!nal
regulati!n. We argue $urther that there is a $undamental
di$$erence between the rights !$ lab!r and capital t! m!ve
acr!ss b!rders and the rights !$ a c!rp!rati!n inc!rp!rated
in !ne >urisdicti!n t! !perate in an!ther, and that it is a
legitimate prer!gative !$ g!vernments t! reAuire that th!se
wishing t! engage in material business within their b!rders
t! be inc!rp!rated /e.g. thr!ugh the establishment !$ asubsidiary0 within the c!untry. s the discussi!n bel!w will
mae clear, h!wever, these reAuirements are necessary,
but n!t su$$icient: there are $ar deeper pr!blems with the
investment agreements.
mengganggu perdagangan antarnegara atau membatas
ha-ha dasar H paah huum lingungan negara begitu H
da , secara implisit , menyeimbangan hati-hati . elas
huum apapun dapat mempengaruhi perdagangan, dan
tindaan huum yang individu mungin sebalinya
melauan , . elas , undang-undang yang dirancang untu
mengganggu perdagangan antarnegara tida
diperb!lehan , tetapi seberapa >auh bisa atau harus satumasu menc!l! turun huum yang ini adalah beberapa
e$e insidental H 9arusah itu men>adi masalah atau prinsip
, yang mungin , misalnya , membatasi setiap undang
undang upah minimum atau huum perburuhan apapunH
tau s!al menilai besarnya e$eH ;ertanyaan serupa
muncul dalam menilai apaah undang-undang tersebu
melanggar ha dasar untu !ntra . "eperti ita
memperdebatan pertanyaan di dalam meria "eriat
ada pr!ses dem!rasi yang bermain di semua tingatan
;ada prinsipnya , >ia negara-negara yang diperintahan
dari mengesahan undang-undang upah minimum , maa
pemerintah +ederal mungin bisa melauannya 3emiian >uga untu bagian lain dari peraturan . Tap
masalah serius mungin muncul etia tubuh tingat yang
lebih tinggi memberlauan pembatasan !t!ritas tingat
tetapi merea !t!ritas tingat yang lebih tinggi itu sendir
tida memilii ha untu mengambil tindaan . "ebuah
esen>angan peraturan mungin timbul
3emiian seperti yang ita pindah e e!n!mi gl!bal , ita
perlu memilii eranga huum yang mengatur sengeta
lintas batas , . an ada ebutuhan untu menilai apa
peraturan merupaan suatu pembatasan yang tida adi
pada perdagangan . amun sayangnya , gl!balisas
e!n!mi telah melebihi gl!balisasi p!liti : ita tida
mengembangan lembaga-lembaga internasi!nal yang
dem!ratis yang diperluan , bai untu menyusun
per>an>ian atau mengadili sengeta . ;er>an>ian
internasi!nal yang ita milii , misalnya , dalam
perdagangan adalah hasil dari tawar-menawar eras d
bali pintu tertutup , dengan epentingan epentingan
husus di negara-negara besar dan d!minan e!n!m
/ r!pa dan " 0 yang berlau
*T" dan etentuan investasi +T telah berusaha untumengisi esen>angan , tetapi merea melauannya
dengan cara yang >auh dari memuasan . Merea
didasaran pada seperangat !heren prinsip-prinsip
e!n!mi , yang mengarah e pemahaman yang gaga
2&'ome argued that the Constitution rohibited state minimum #age la#s but did not give the 2ederal Government the o#er to ass such la#s" 'ee the cases mentioned in fn" -= restricting state@s rights to ass minimum rights la#s+et in 0dkin@s v Children@s 7osital in =-? the 'ureme Court found that federal minimum #age legislation for #omen #as unconstitutional" The ossibility of thecreation of Ano man@s8 lands is of articular concern; in globali(ation; at least #ithin the United 'tates) there are relatively easy #ays of Afi6ing8 the roblem osed bysuch gas" 0nd the government has at least fiscal resources to address some of the adverse conseuences"
3'In Making Globalization Work, op cit" I cite many e6amles the U"'" Trade 3eresentative has ushed for olicies ) #hich
#hile they may increase rofits of certain cororate interest) may be against the broader interests of the United 'tates"
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ne !$ the pr!blems !$ the *Ts is that they are !ne -
sided and unbalanced: they give c!rp!rati!ns rights with!ut
resp!nsibilities, c!mpensati!n $!r adverse treatment, but
n!t rec!very !$ capital gains $r!m p!sitive treatment' they
have given $!reign $irms pr!tecti!ns n!t a$$!rded t!
d!mestic $irms, thereby creating an un level playing $ield,with perverse incentives.1 There are g!!d reas!ns that
g!vernments have n!t pr!vided these guarantees t!
d!mestic $irms-and there are g!!d reas!ns that they sh!uld
n!t be pr!vided t! internati!nal $irms.
* appr!ach these issues $r!m the perspective !$ an
ec!n!mist, an ec!n!mist that sees instituti!ns lie
Gc!rp!rati!nsL and Gpr!perty rightsL as s!cial c!nstructi!ns,
t! be evaluated !n h!w well they serve br!ader public
interest. *ndividuals have rights-the inds !$ rights inscribedin the ill !$ (ights. *ndividuals may have certain rights t!
act t!gether c!llectively, but there is n! inherent right, $!r
instance, t! limited liability, which de$ines c!rp!rati!ns.
7imited liability is a s!cial c!nstructi!n which has a pr!ven
very use$ul' indeed, with!ut it, it w!uld be hart t! imagine
m!dern capitalism.2ut the circumstances in which the
c!rp!rate veil can be pierced, the GrightsL which !ught t! be
granted t! these limited liability instituti!ns /including the
right t! enter a c!untry0, !r the eKtent t! which the !$$icers
!$ these instituti!ns sh!uld be held liable $!r the acti!ns
which these instituti!ns tae, is a matter !$ ec!n!mic and
s!cial p!licy. T! repeat, they have n! inherent rights.
Thus, an analysis !$ the desirability !$ eKtending t!
c!rp!rati!ns certain rights is Auintessentially a matter !$
ec!n!mic and s!cial analysis-t! ascertain what are the
c!nseAuences !$ !ne set !$ pr!visi!ns !r an!ther. The
intent !$ this paper is t! pr!vide this analysis.
(eaders will sea a cl!se parallel between the appr!ach
taen here and that taen by d!l$ . erle and ardiner %.Means in their classic w!r$ %he &odern Corporation and
Private Property.4They called attenti!n t! the separati!n !$
!wnership and c!ntr!l and eKpl!red the implicati!ns $!r
peran sesuai regulasi nasi!nal . )ami berpendapat lebih
lan>ut bahwa ada perbedaan mendasar antara ha-ha
tenaga er>a dan m!dal untu bergera lintas batas dan
ha-ha perusahaan yang tergabung dalam satu yurisdis
untu ber!perasi di negara lain , dan bahwa hal itu adalah
ha prer!gati$ yang sah dari pemerintah untu
mengharusan merea yang ingin terlibat dalam bisnis
bahan dalam perbatasan merea untu dimasuan/ misalnya melalui pembentuan ana perusahaan 0 d
dalam negeri . "eperti pembahasan di bawah ini aan
membuat >elas , bagaimanapun , persyaratan in
diperluan , tetapi tida cuup : ada masalah yang >auh
lebih dalam dengan per>an>ian investasi .
"alah satu masalah dari *T" adalah bahwa merea
adalah satu - sisi dan seimbang : merea memberian
perusahaan ha tanpa tanggung >awab , !mpensasi untu
peng!batan yang merugian , tetapi tida pemulihan capita
gain dari peng!batan p!siti$ , merea telah memberian
perusahaan asing perlindungan tida diberian epadaperusahaan-perusahaan d!mesti , sehingga menciptaan
tingat lapangan bermain un , dengan insenti$ . da alasan
yang bai bahwa pemerintah belum memberian >aminan
ini untu d!mesti perusahaan - dan ada alasan yang bai
bahwa merea tida b!leh diberian epada perusahaan-
perusahaan internasi!nal
u mendeati masalah ini dari perspeti$ se!rang
e!n!m , se!rang e!n!m yang melihat lembaga-lembaga
seperti ? perusahaan ? dan ? ha mili ? sebagai !nstrus
s!sial , yang aan dievaluasi pada seberapa bai merea
melayani epentingan publi yang lebih luas . *ndividu
memilii ha - >enis ha tertulis dalam ill !$ (ights
*ndividu mungin memilii ha-ha tertentu untu bertinda
bersama-sama secara !leti$ , tetapi tida ada yang
meleat tepat , misalnya, untu perser!an terbatas , yang
mende$inisian perusahaan . ;erser!an terbatas
merupaan !nstrusi s!sial yang memilii terbuti sanga
berguna , memang, tanpa itu , aan hart membayangan
apitalisme m!dern . Tapi eadaan dimana tabi
perusahaan dapat menembus , yang ? ha ? yang
seharusnya diberian epada lembaga-lembaga perser!an
terbatas / termasu ha untu masu e suatu negara 0 atau se>auh mana petugas dari lembaga-lembaga ini harus
bertanggung >awab atas tindaan yang lembaga-lembaga
ini mengambil , adalah masalah ebi>aan e!n!mi dan
31Concern about this has led the U"'") in the recent oreaDU' 2ree Trade 0greement to include rovisions #hich ensure that orean investors in the U"'" do not
have more rights and rotections than U"'" investors"32
'ee B" Green#ald and %" &" 'tilit() AInformation) 2inance and Markets, The 0rchitecture of 0llocative Mechanisms)8 Industrial and orporate !ange)
==-)" ?$D/?"33
I take this vie#) recogni(ing that some argued that cororations do enEoy some rotection under the U"'" Constitution" 'ee "anta lara ounty v# "out!ern
Paci$ic %ailroad o")99- U"'" ?=: #hich many interret as granting : th0mendment due rocess rotection to cororations"34
The 1@@2 editi!n was published by Macmillan' the revised editi!n /1@FE0 was published by 9arc!urt race.
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pr!perty rights. My 1@855 paper helped put erle and
Means !n s!lid $!!tings' it pr!vided in$!rmati!n the!retic
$!undati!ns $!r the separati!n !$ !wnership and c!ntr!l and
helped eKplain why e$$ective c!ntr!l is n!t eKercised by
shareh!lders.E*t als! helped begin the m!dern discussi!n
!$ c!rp!rate g!vernance.F
ne m!re preliminary caveat: !ne !$ the pr!blems with
the bilateral investment agreements is that they inv!e
inherently ambigu!us terms /G$air and eAuitable treatmentL0'
the ad>udicati!n pr!cess !$ten inv!es standards !$
c!mmercial secrecy, even th!ugh !ne !$ the parties t! the
suit a public entity in which there sh!uld be high standards
!$ transparence' di$$erent arbitrati!n panels can c!me t!
!pp!site c!nclusi!ns in alm!st identical cases'8and there
is typically n! way in which such di$$erences get res!lved.
"ince a large $racti!n !$ the agreements are !$ recent
vintage, there is c!nsiderable uncertainty ab!ut what they
may imply. *n the l!ng run, greater balance may beachieved than has s!metimes been the case in the
past'@and the $ears eKpressed here may pr!ve
unwarranted. ;art !$ the intent !$ this paper is t! in$luence
the ev!luti!n !$ this critical area !$ law.
The sec!nd secti!n, G;r!blems ;!sed $!r
Multinati!nals,L pr!vides a brie$ reprise !$ the imp!rtant
c!ntributi!ns !$ multinati!nals-and !$ special pr!blems that
they p!se, pr!blems that may be s!mewhat di$$erent $r!m
th!se p!sed by d!mestic $irms' it describes the bene$its
s!sial . &ntu mengulang , merea tida memilii ha yang
meleat .
3engan demiian , analisis einginan memperluas
perusahaan ha tertentu dasarnya masalah e!n!mi dan
s!sial - analisis untu memastian apa !nseuensi dar
satu set etentuan atau yang lain . Masud d!umen in
adalah untu memberian analisis ini .
;embaca aan laut paralel yang erat antara pendeatan
yang dilauan di sini dan yang diambil !leh d!l$ . erle
dan ardiner %. Means dalam arya lasi merea , The
M!dern %!rp!rati!n dan Mili ;ribadi . Merea meminta
perhatian pada pemisahan epemilian dan !ntr!l dan
men>ela>ahi impliasi untu ha mili . My paper 1@85
membantu menempatan erle dan Means pada p!ndas
yang s!lid , melainan memberian in$!rmasi dasar te!r
untu pemisahan epemilian dan !ntr!l dan membantu
men>elasan mengapa !ntr!l yang e$eti$ tida dilauan
!leh pemegang saham . 9al ini >uga membantu memuladisusi m!dern tata el!la perusahaan .
"atu peringatan lebih awal : salah satu masalah dengan
per>an>ian investasi bilateral adalah bahwa merea
memanggil istilah inheren ambigu / ? perlauan yang adi
dan merata ? 0 ' pr!ses a>udiasi sering memanggil standa
erahasiaan !mersial , mesipun salah satu piha dalam
gugatan entitas publi di mana harus ada standar tingg
transparansi , panel arbitrase yang berbeda bisa datang e
esimpulan yang berlawanan dalam asus-asus yang
hampir sama , dan ada biasanya tida ada cara di mana
perbedaan tersebut bisa diselesaian . )arena sebagian
35G%redit Marets and the %!ntr!l !$ %apita,L Jo+rnal o/ money$ Baning$ and Credit, 1F/20, May 1@85, pp.1-152
.36
The pr!blems are related n!t !nly t! imper$ect, asymmetric, and c!stly in$!rmati!n, but t! $act that g!!d management !$ a $irm is a public g!!d
/in the technical, "amuels!nian sense0: all shareh!lders bene$it i$ $irm pr!$its increase as a result !$ better management. s a public g!!d, there will bean undersupply !$ !versight !$ c!rp!rate management. "ee the discussi!n bel!w, ec!n!mic The!ry and the (egulati!n !$ *nvestment.
37arlier, * had eKpl!red limitati!ns !n alternative mechanism $!r c!rp!rate c!ntr!l, such as tae!vers. "ee, e.g. G"!me aspects !$ the ;ure The!ry
!$ %!rp!rate +inance: anruptcies, and Tae-vers,L Bell Jo+rnal o/ Economist, /20, utumn 1@F2, pp. 458-482' Gwnership, %!ntr!l and $$icienMarets: "!me ;arad!Kes in the The!ry !$ %apital Marets,L in EconomicReg+lation; Essays in honor o/ JamesR. 7elson, )enneth 3. !yer andWilliam . "hepherd /eds.0, Michigan "tate &niversity ;ress, 1@82, pp. 11-41. +!r a m!re recent c!ntributi!n sh!wing h!w managers can ensc!ncethemselves and act in ways that are n!t in the interest !$ their shareh!lders, see . dlin and . . "tigli#t G3isc!uraging (ivals: Managerial (ent-"eeing and c!n!mic *ne$$iciencies,L merican Economic Revie3, 85/50, 3ecember 1@@5, pp. 1D1-112. "ee als!, liver 9art and "an$!rd
r!ssman. GTae!ver ids, the +ree-rider ;r!blem and the The!ry !$ the %!rp!rati!n, Bell Jo+rnal o/ Economics, 11/10, 1@8D, pp. 42-E41.
3%(he two most notable e)am#les were the 3 *ctober 2''6 ruling o the +-+. tribunal in the /0 v! rgentina ase +-+. ase no! arb'21, .ecision on
/iability, available at htt#ita!law!uvic!cadoc$ustments/0rgentina/iabiliity!#d8, on the issue o the 9state o necessity,: and the result in "- v! rgentina+-+. ase ;o! rb'1% ward 12 "ay 2''5, 44 +!/!"! 12'5 2''5e#ublic ?!@! v! zech
>e#ublic A;+(>/ (he ;etherlandszech >e#ublic ?+(e#ublic, A;+(>/! Anited -tateszech >e#ublic ?+(
the ormer set o cases, see !>einisch, 9;ecessity in +nternational investment rbitrationCn Annecessary -#lit o >ecent +-+. casesD omments on "- v
rgentina and /0 v! rgentina,:Journal of WorldInvestment and Trade, %2
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they have br!ught but als! eKplains why they have been
sub>ect t! such criticism. The third secti!n pr!vides the c!re
!$ the ec!n!mic analysis. *t articulates the maret
$undamentalism p!siti!n underlying many !$ the arguments
!$ $ree maret adv!cates, including th!se stressing the
imp!rtance !$ pr!tecti!n /s!metimes re$erred t! as the
%hicag! sch!!l0. *t eKplains /a0 why under th!se
perspectives there w!uld be n! need $!r bilateral tradeagreements' but /b0 why these ideas have been re>ected by
m!dern ec!n!mic analysis. n the basis !$ this, it eKplains
why g!vernment regulati!n is reAuired and applies that
analysis t! eKplain the need $!r g!vernment rules g!verning
c!rp!rate g!vernance and banruptcy.
ey Auesti!n is whether there is a single GbestL set !$
legal instituti!ns-$!r instance, a single ;aret! ptimal4Dset
!$ c!rp!rate g!vernance and banruptcy laws. *$ there is,
then it w!uld mae sense t! standardi#e legal $ramew!rs'but i$ there is n!t, it d!es n!t. *n the $!urth secti!n, we
eKplain why there is n!t a single ;aret! d!minant legal
$ramew!r, and acc!rdingly why standardi#ati!n may be
undesirable.41
The $!ll!wing secti!ns then apply this analysis t!
several !$ the central issues under dispute in the
c!ntr!versy !ver investment treaties:
a0 What rights sh!uld $!reign $irms have t!
establish themselvesH We argue in G*mplicati!ns $!r
ilateral Trade greements: (ights !$
stablishmentL against even the limited rights t!
establishment emb!died in many !$ the recent
investment treaties.
ut the vari!us pr!blems with *Ts will n!t be
s!lved merely by reAuiring $!reigners t! inc!rp!rate
l!cal subsidiaries in the h!st state. (ather, the
treaties themselves need t! be restructured.42
b0 Wh! sh!uld be pr!tected and against what
GmeasuresL /acti!ns0H with what GstandardsLH +!r
instance, sh!uld there be pr!tecti!n simply against
discriminati!n, !r against acti!ns which areinc!nsistent with principles !$ G$air and eAuitableLH
besar dari per>an>ian adalah vintage baru-baru ini , ada
etidapastian tentang apa yang merea menyiratan
3alam >anga pan>ang , eseimbangan yang lebih besar
dapat dicapai daripada yang adang-adang telah ter>adi d
masa lalu, dan ehawatiran yang diungapan di sin
mungin terbuti tida beralasan . agian dari masud dar
tulisan ini adalah untu mempengaruhi ev!lusi daerah in
ritis huum .
agian edua , ? Masalah erp!se untu perusahaan
multinasi!nal , ? menyediaan reprise singat !ntribus
penting dari perusahaan multinasi!nal dan masalah husus
yang merea a>uan , masalah yang mungin aga berbeda
dari yang dia>uan !leh perusahaan-perusahaan d!mesti
melainan menggambaran man$aat yang merea telah
membawa tetapi >uga men>elasan mengapa merea telah
dienaan riti tersebut . agian etiga memberian int
dari analisis e!n!mi . *ni mengartiulasian p!sis
$undamentalisme pasar yang mendasari banya argumen
penduung pasar bebas , termasu yang meneananpentingnya perlindungan / adang-adang disebut sebaga
se!lah %hicag! 0 . *ni men>elasan / a0 mengapa dalam
perspeti$-perspeti$ tida aan ada ebutuhan untu
per>an>ian perdagangan bilateral , tetapi / b 0 mengapa ide-
ide ini telah dit!la !leh analisis e!n!mi m!dern. tas
dasar ini, men>elasan mengapa peraturan pemerintah
yang diperluan dan menerapan analisis yang
men>elasan perlunya peraturan pemerintah yang mengatu
tata el!la perusahaan dan ebangrutan .
"ebuah pertanyaan unci adalah apaah ada satu ? terbai
? set lembaga - bagi huum misalnya , satu ;aret! ptima
set tata el!la perusahaan dan ebangrutan huum . ia
ada , maa aan masu aal untu membauan eranga
huum , tetapi >ia tida ada , tida. ;ada bagian eempat
ita men>elasan mengapa tida ada eranga huum
;aret! d!minan , dan arenanya mengapa standarisas
mungin tida diinginan .
agian beriut emudian menerapan analisis ini untu
beberapa isu sentral dalam sengeta dalam !ntr!vers
atas per>an>ian investasi :
a0 9a-ha apa yang harus perusahaan asing harusmembangun diri H )ami berdebat di ? *mpliasi ;er>an>ian
4' law /!r res!urce all!cati!n0 is said t! be ;aret! ptima i$ there is n! !ther law /!r res!urce all!cati!n0 such that every!ne is better !$$. *$ there
is a single ;aret! ptimal legal structure, then presumably there will be unanimity in supp!rt' but i$ there are multiple ;aret! ptimal legal structuresthere will be trade-!$$s, with s!me individuals better !$$ under !ne, !ther under an!ther.
41There may, !$ c!urse, be e$$iciency gains $r!m standardi#ati!n' but these e$$iciency gains need t! be c!mpared with the e$$iciency l!sses-the
standardi#ati!n rules may be less suited t! the ec!n!mic situati!n !$ s!me, !r all, !$ the c!untries than a m!re tail!red set !$ rules' and there may belarge distributive c!nseAuences which m!re than !$$set the e$$iciency gains-the standard may be tail!red t! the rich and p!wer$ul, t! the disadvantage !!thers.
42*ndeed, many !$ the $!reign investment disputes inv!lve a l!cal subsidiary inc!rp!rated in the h!st state, where the $!reign parent inv!es the
internati!nal treaty right, in an e$$!rt t! get better treatment $!r its investments in the h!st state.
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*$ the latter, what is t! be meant by such w!rldH
What sh!uld be the standard !$ c!mpensati!nH
There is little dispute ab!ut the issue !$ pr!tecti!n $r!m
eKplicit eKpr!priati!n.4 GWhat ets ;r!tectedH (egulat!ry
TaingsL 7!! at !ne !$ the critical ways that the *Ts g!
well bey!nd pr!tecting against eKpr!priati!n, t! pr!tecting
against in regulati!ns-!r even the e$$ect !$ eKistingregulati!ns. We argue that such pr!tecti!ns can undermine
ec!n!mic e$$iciency and can be c!ntrary t! basic principles
!$ s!cial >ustice, particularly given the standards that have
s!metimes been inv!ed.
$ c!urse, the bilateral agreements d! n!t pr!hibit
g!vernments $r!m undertaing vari!us acti!ns' they simply
reAuire the g!vernment t! pr!vide c!mpensati!n. ut $!r
cash strapped g!vernments, the e$$ect may be much the
same. The seventh secti!n, G"tandards !$ %!mpensati!nL,
addresses the issue !$ c!mpensati!n, arguing str!nglyagainst the br!ader c!mpensati!n s!metimes reAuired
/which includes l!st pr!$its440 but als! suggesting that even
c!mpensati!n $!r reduced value !$ investments may be
pr!blematic.
G(ights and (esp!nsibilitiesL argues that the
investment agreements have been !ne-sided, that they
have given $!reign c!mpanies rights with!ut imp!sing
resp!nsibilities, !r with!ut even $acilitating the ability !$
devel!ping c!untries t! ensure that the multinati!nal
c!rp!rati!ns live up t! their !bligati!ns.
ne !$ the m!st critici#ed aspects !$ these agreements
is the dispute res!luti!n mechanisms: the use !$ arbitrati!n
c!urts, designed t! settle c!mmercial dispute, t! en$!rce an
agreement !n a g!vernment. The pr!cesses !$ten lac the
!penness and transparency that we have c!me t! eKpect
$r!m >udicial pr!ceedings in a dem!cratic s!ciety and have
!$ten sh!wn little regard t! br!ader s!cietal c!ncerns, as
they $!cus eKclusively !n the rights !$ invest!rs. The
secti!n titled G3ispute (es!luti!nL argues that there is much
merit in these criticisms and pr!p!ses re$!rms in thead>udicati!n pr!cess, including the creati!n !$ an
internati!nal c!mmercial c!urt.
;erdagangan ilateral : 9a ;endirian ? melawan bahan
ha terbatas pada pembentuan diwu>udan dalam banya
per>an>ian investasi baru-baru ini .
amun berbagai masalah dengan *T" tida aan
diselesaian hanya dengan mengharusan !rang asing
untu memasuan ana perusahaan l!al di negara tuan
rumah . "ebalinya, per>an>ian itu sendiri perlu
direstruturisasi .
b 0 "iapa yang harus dilindungi dan terhadap apa ?
tindaan ? / tindaan 0 H dengan apa yang ? standar ? H
Misalnya , harus ada perlindungan hanya terhadap
disriminasi , atau terhadap tindaan yang tida !nsisten
dengan prinsip-prinsip ? adil dan merata ? H ia yang
terahir, apa yang harus dimasud dengan dunia sepert
ituH pa yang harus men>adi standar !mpensasi H
da sediit perselisihan tentang masalah perlindungan dar
pengambilalihan esplisit . ? pa Mendapat ;r!tected H;engambilalihan peraturan ? 7ihatlah salah satu cara
penting bahwa *T" melampaui melindungi terhadap
pengambilalihan , untu melindungi terhadap peraturan
atau bahan e$e dari peraturan yang ada . )am
berpendapat bahwa perlindungan tersebut dapat merusa
e$isiensi e!n!mi dan dapat bertentangan dengan prinsip
prinsip dasar eadilan s!sial , terutama mengingat standa
yang teradang telah dipanggil
Tentu sa>a, per>an>ian bilateral tida melarang pemerintah
dari melauan berbagai tindaan , merea hanya
mengharusan pemerintah untu memberian
!mpensasi . Tapi untu eurangan uang tuna
pemerintah , e$enya mungin sama . agian etu>uh ,
"tandar )!mpensasi ? , membahas masalah !mpensasi
berdebat eras terhadap !mpensasi yang lebih luas
adang-adang diperluan / termasu ehilangan
euntungan 0, tetapi >uga menun>uan bahwa bahan
!mpensasi untu nilai diurangi investasi mungin
bermasalah
? 9a dan )ewa>iban ? berpendapat bahwa per>an>ian
investasi telah satu sisi , bahwa merea telah memberianha perusahaan asing tanpa memasaan tanggung
>awab , atau bahan tanpa mem$asilitasi emampuan
negara-negara berembang untu memastian bahwa
perusahaan-perusahaan multinasi!nal hidup sampa
43 3evel!ping c!untries $!r a l!ng time resisted any $!rmal c!mmitment n!t t! eKpr!priate, !pp!sing, $!r instance, the 9ull (ule, named a$te
"ecretary !$ "tate %!rdell 9ull, articulated in 1@2, which called $!r Gpr!mpt, adeAuate and e$$ectiveL c!mpensati!n. /"ee 9.. "teiner, 3.+. Iagts, and9.9. )!h, %ransnational 1egal Pro2lems, 45E-5F, 1@@4, and .T. u#man, GKplaining the ;!pularity !$ ilateral *nvestment Treaties: Why 73%6s "ignTreaties that 9urt Them,L :irginia Jo+rnal o/International la3, 8/E@0, 1@@8, pp. E@-8@. *nvestment treaties typically d! n!t pr!hibit eKpr!priati!n bu!nly c!mmit eKpr!priating g!vernments t! pr!viding c!mpensati!n. This $!cuses attenti!n !n the bases !$ c!mpensati!n. "ee the secti!n G"tandards !$%!mpensati!n.L
44s in the *nd!nesian case cited earlier.
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The pr!blems in regulati!n unc!vered in previ!us
secti!ns highlight the need $!r a better internati!nal
$ramew!r $!r g!verning cr!ss-b!rder ec!n!mic activities, a
sub>ect taen up in GT!ward (egulating Multinati!nal
%!rp!rati!ns l!bally.L We emphasi#e tw! c!re principles:
/a0 minimi#ing the sc!pe !$ such agreements t! standards
that are viewed as abs!lutely essential $!r the c!nduct !$cr!ss b!rder business' and /b0 n!n-discriminati!n /G!n-
3iscriminati!nL0.
The neKt secti!ns tae up tw! !$ the ey criticisms !$
the bilateral agreements: they are n!t designed in ways that
mae the appr!priate legal ev!luti!n p!ssible. *t is di$$icult
t! c!rrect GmistaesL either in the design !$ the treaties !r
the interpretati!n !$ the pr!visi!ns /$urther rein$!rcing the
argument $!r a limited sc!pe $!r such agreements0.
+urtherm!re, the p!litical pr!cesses underlying these
investments are $undamentally undem!cratic.
The $inal secti!n pr!vides c!ncluding remar: balance
need t! the g!vernance !$ cr!ss b!rder ec!n!mic relati!ns.
%!untries sh!uld be eKtremely cauti!us in signing bilateral
investment treaties /especially the m!re eKpansive
agreements that g! bey!nd n!n discriminati!n0. nd it
pr!vides supp!rt $!r the initiatives !$ several c!untries
/cuad!r, !livia, %#ech (epublic0 and !ther $!r revising
eKisting agreements. There needs t! be a seri!us r!llbac
in the agreements already signed.
PROBLEMS POSED BY MULTINATIONALS
+!r all the reas!ns given earlier, multinati!nals have
br!ught en!rm!us bene$its. T!day c!untries ar!und the
w!rld c!mpete t! attract multinati!nals' they b!ast !$
having a business-$riendly envir!nment. nd $!reign capital
has p!ured in t! devel!ping c!untries, increasing siK $!ld
between 1@@D and 1@@F, be$!re it sl!wed /and reversed0 as
a result !$ the ast sian and gl!bal $inancial crisis.45
ut $!r all the bene$its they bring, multinati!nals have
been vili$ied-and !$ten $!r g!!d reas!n.
*n s!me cases they tae a c!untry6s natural res!urces,
paying but a while leaving behind an envir!nmental
disaster.4EWhen called up!n by the g!vernment t! clean up
ewa>iban merea
"alah satu aspe yang paling diriti dari per>an>ian in
adalah meanisme penyelesaian sengeta : penggunaan
pengadilan arbitrase , yang dirancang untu menyelesaian
sengeta !mersial , untu menegaan esepaatan
mengenai pemerintah . ;r!ses sering eurangan
eterbuaan dan transparansi yang ita telah datang eharapan dari pr!ses peradilan dalam masyaraa
dem!ratis dan sering menun>uan sediit beraitan
dengan masalah s!sial yang lebih luas , arena merea
$!us secara eslusi$ pada ha-ha invest!r . agian
ber>udul ? ;enyelesaian "engeta ? berpendapat bahwa
ada banya man$aat dalam riti-riti ini dan mengusulan
re$!rmasi dalam pr!ses a>udiasi , termasu pembentuan
pengadilan !mersial internasi!nal
Masalah dalam peraturan ditemuan di bagian sebelumnya
meny!r!ti ebutuhan untu eranga er>a internasi!na
yang lebih bai untu mengatur egiatan e!n!mi lintasbatas , sub>e diambil dalam )ami meneanan dua prinsip
inti ? Menu>u ;engaturan ;erusahaan Multinasi!nal gl!bal
? : / 0 meminimalan ruang lingup per>an>ian tersebu
dengan standar yang dipandang sebagai sangat penting
untu men>alanan bisnis lintas batas , dan / b 0 n!n
disriminasi / ? n!n - disriminasi ? 0
agian beriutnya mengambil dua riti utama dar
per>an>ian bilateral : merea tida dirancang dengan cara
yang membuat ev!lusi huum yang tepat mungin. "uli
untu memperbaii ? esalahan ? bai dalam desain
per>an>ian atau pena$siran etentuan / lebih lan>u
memperuat argumen untu lingup terbatas untu
per>an>ian tersebut 0 . "elain itu , pr!ses-pr!ses p!liti yang
mendasari investasi ini pada dasarnya tida dem!ratis
agian terahir memberian menyimpulan !mentar
eseimbangan perlu tata hubungan e!n!mi lintas batas
egara harus sangat berhati-hati dalam menandatangan
per>an>ian investasi bilateral / terutama per>an>ian yang
lebih luas yang melampaui n!n disriminasi 0 . 3an
menyediaan duungan untu inisiati$ dari beberapa negara
/ uad!r , !livia , (epubli %e! 0 dan lainnya untumerevisi per>an>ian yang ada . ;erlu ada r!llbac serius
dalam per>an>ian yang sudah ditandatangani
Masalah yang ditimbulan !leh M&7T*"*7
&ntu semua alasan yang diberian sebelumnya
45&%T3 pr!vides data !n +3* $l!w t! devel!ping c!untries. *n c!nstant value term /2DDD &"P0, net +3* $l!w t! devel!ping c!untries /in$l!ws
!ut$l!ws0 in 1@@D were P2@.2 billi!n. This r!se t! P1E. billi!n in 1@@@, an increase !$ 5.E times. et $l!ws remained bel!w this level until 2DD5. "incethen they have increased t! P1FE.@ billi!n, an increase !$ 8U $r!m 1@@@ levels.
46"ee, $!r instance, the discussi!ns in ared 3iam!nd, Collapse, ;enguin, 2DD5, and in %hapter 5 !$ . . "tiglit#, &aing 0lo2alization -or$ op
cit.
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the mess, they ann!unce that there are banrupt: all the
revenues have already been paid !ut t! shareh!lders. They
tae advantage !$ limited liability.4F
*n s!me cases, when the adverse c!nseAuences !$
their acti!ns are critici#ed, the M%s plead that they are
simply $!ll!wing the law' but such de$enses aredisingenu!us, $!r they !$ten w!r hard t! mae sure that
the law is the law that suits them well and maKimi#es their
pr!$its.
%!nsider $!r instance, the regulati!n !$ cigarettes. We-
and * include in the GweL the cigarette c!mpanies48-have
n!wn $!r decades that cigarettes are bad $!r !ne6s health,
but the cigarette c!mpanies have deliberately tried t!
create c!n$usi!n ab!ut the scienti$ic evidence. While they
have w!red hard t! st!p regulati!n, they have als! w!red
hard t! mae sure that they d! n!t bear any liability $!r theen!rm!us c!sts that result $r!m their danger!us pr!ducts.
/M!re recently, KK!n has engaged in a similar attempt t!
discredit the science !$ gl!bal warming,4@When ; !wned
up t! the riss !$ gl!bal warming, it was castigated by the
!ther members !$ the !il club, $!r a while alm!st treated as
a pariah.0
*n devel!ping c!untries, there are widespread
allegati!ns !$ c!rrupti!n-and many c!ntracts that !nly mae
sense when see in that c!nteKt. +!r years, many c!untries
pr!vided taK deducti!ns $!r bribes' in e$$ect, Western
g!vernments were subsidi#ing them, even th!ugh they
undermined dem!cratic g!vernance abr!ad /and even as
they lectured them ab!ut the imp!rtance !$ g!vernance0. *
was the &.". representative t! the %3 ministerial
meeting in the mid-1@@Ds, when the &.". was pushing $!r
the anti-bribery %!nventi!n. * was sh!ced by the
resistance.
The pr!blem is m!re pervasive. %!mpanies, lie ;
perusahaan multinasi!nal telah membawa man$aat besar
9ari ini negara di seluruh dunia bersaing untu menari
perusahaan multinasi!nal , merea membanggaan
memilii lingungan yang ramah bisnis . 3an m!dal asing
telah dituangan e negara-negara berembang
meningat enam ali lipat antara tahun 1@@D dan 1@@F
sebelum melambat / dan terbali 0 sebagai aibat dari sia
Timur dan risis euangan gl!bal
Tetapi untu semua man$aat yang merea bawa
perusahaan multinasi!nal telah di$itnah dan sering untu
alasan yang bai
3alam beberapa asus merea mengambil sumber daya
alam suatu negara , membayar tapi sementara
meninggalan bencana lingungan . )etia dipanggil !leh
pemerintah untu membersihan eacauan , merea
mengumuman bahwa ada bangrut : semua pendapatan
telah dibayaran epada para pemegang saham . Merea
mengambil euntungan dari perser!an terbatas .
3alam beberapa asus , etia !nseuensi yang
merugian dari tindaan merea diriti , perusahaan
multinasi!nal mengau bahwa merea hanya mengiut
huum , tetapi pertahanan seperti >u>ur , arena merea
sering beer>a eras untu memastian bahwa huum
adalah huum yang sesuai dengan merea dengan bai
dan memasimalan euntungan merea
;ertimbangan misalnya, regulasi r!! . )ami - dan saya
termasu dalam ? ita ? perusahaan - r!! telah diena
selama puluhan tahun bahwa r!! tida bai untu
esehatan sese!rang , tetapi perusahaan r!! telah
senga>a menc!ba untu menciptaan ebingungan atas
buti ilmiah . "ementara merea telah beer>a eras untu
menghentian regulasi , merea >uga beer>a eras untu
memastian bahwa merea tida menanggung ewa>iban
untu biaya yang sangat besar yang dihasilan dari pr!du
pr!du berbahaya merea. / aru-baru ini , KK!n telah
terlibat dalam upaya serupa untu mendisreditan ilmu
pemanasan gl!bal , )etia ; dimilii hingga risi!
pemanasan gl!bal , itu diecam !leh angg!ta lain dari lub
minya , untu sementara hampir diperlauan sebaga
47This is true b!th devel!ped and devel!ping c!untries. "ee ared 3iam!nd, Collapse, ;enguin: 2DD5.
4%"ee, $!r instance, the $indings in &nited "tates !$ merica v ;hillip M!rris &" *nc, %ivil cti!n !. @@-24@E /)0 and the evidence submitted in
"chwab v. ;hillip M!rris &", DE-4EEE, &.". %!urt !$ ppeals $!r the 2d %ircuit /ew =!r0 ;age 25@ details the $!rmer c!urt6s $inding that: G*n the1@5Ds, 3e$endants egan Their !int %ampaign t! +alsely 3eny and 3ist!rt the Kistence !$ a 7in etween %igarette "m!ing and 3isease, venTh!ught Their *nternal 3!cuments (ec!gni#ed *ts KistenceL The $ull $indings are available at: www.usd!>.g!vJcivilJcasesJt!bacc!2Jamended!pini!n.pd$O /accessed !n !v 25, 2DDF0.
4&"ee . all, GKK!n "!$tens %limate %hange "tance,L %he 3all Street Jo+rnal, anuary 11, 2DDF, 2: G*ts t!p eKecutives have !penly Auesti!ned
the scienti$ic validity !$ claims that $!ssil-$uel emissi!ns are warming the planet, and it has $unded !utside gr!ups that have challenged such claims inlanguage s!metimes str!nger than the c!mpany itsel$ has used.L +!r instance, it $unded the %!mpetitive nterprise *nstitute, a Washingt!n-based thinthan that ran televisi!n ads saying that carb!n di!Kide /the main greenh!use gas0 is help$ul.
http://www.usdoj.gov/civil/cases/tobacco2/amended%20opinion.pdfhttp://www.usdoj.gov/civil/cases/tobacco2/amended%20opinion.pdfhttp://www.usdoj.gov/civil/cases/tobacco2/amended%20opinion.pdfhttp://www.usdoj.gov/civil/cases/tobacco2/amended%20opinion.pdf8/12/2019 Grotius Lecture
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and 9ydr!, that have made an e$$!rt t! mae their
transacti!ns m!re transparent, have n!t with supp!rt $r!m
their c!lleagues.5D This puts the Gg