Arbitration Newsletter, Vol 15 September 2010, p. 102-105. Newsletter of the International Bar Association Legal Pratice Division
Thee years have passed since the Fifth Summit of the Bolivarian Alternative for the Americas (ALBA) was held in April 2007, in Barquisimeto, Venezuela.
During this Summit, the Presidents of the ALBA announced their intention to withdraw from the International Centre for Settlement of Investment Disputes (ICSID), claiming as the reason an alleged profound conflict of interest between the Centre and the World Bank. The ALBA declaration and the actions taken by some of the ALBA countries to dismantle the framework for the protection of foreign investment, and to prohibit or restrict recourse to international arbitration in oil and gas state contracts, was alarming to the international arbitration community.
This concern was justified, particularly considering the partial failure of the Free Trade Area of the Americas initiative (FTAA); Argentina’s experience with investment arbitration; the fact that Brazil (the most successful country in Latin America in attracting flows of FDI) is not a signatory to the ICSID Convention and has not ratified any of the BITs executed during the 1990s; that Mexico has been reluctant to enter into the ICSID system notwithstanding that it is a party to NAFTA; and that the Mercosur Colonia Protocol has not entered into force after more than 15 years since being enacted.