The arbitration processes and the obligations of the investors are axes of the proposal that will replace the Bilateral Investment Treaties. Ecuador presented to 36 ambassadors of different nations the new model of the Bilateral Investment Agreement which replaces the legal framework of the extinct Bilateral Investment Treaty (BIT) that was denounced in May 2017.
The Minister of Foreign Affairs, María Fernanda Espinosa explained that the new format is consistent with International Law on Human Rights, the Constitution of the Republic and the objectives of the National Development Plan. Its elements are to facilitate mutual investment in favor of sustainable development, safeguard state regulation, privilege the prevention of litigation through monitoring mechanisms, efficient dispute resolution alternatives and more.
The previous government denounced 16 BITs, arguing that they violated Article 422 of the Constitution, damaging national sovereignty because the arbitration tribunals contemplated there “generally have interests in companies investing in Ecuador”
Thus, the treaties with Italy, Bolivia, Peru, Spain, the United States, Canada, Argentina, Venezuela, France, the Netherlands, Sweden, Chile, Switzerland, China, Germany, Great Britain and Northern Ireland were out of force.
Espinosa did not delve into the arbitration mechanisms that now arise. She emphasized that the BITs granted the investor only rights and not obligations, while the current proposal establishes responsibilities in human, environmental and anti-corruption rights.
With the presentation of the new model, the Government initiates an immediate renegotiation with the investors. Darío Giustozzi, Argentina’s ambassador, acknowledged that the document is an effort by Ecuador to adapt its regulations. The next step is in the direct talks with each country and “have all the bilateral coordination for the commercial exchange”.
The denunciation of the BITs was based on the report of the Commission for the Integral Audit of Citizens of the Treaties of Reciprocal Protection of Investments and of the Arbitration System in Matters of Investments (Caitisa). Newspaper EL TELEGRAFO has tried, without success, to obtain the opinion of Cecilia Olivet, who on behalf of the Caitisa delivered the study on May 8, 2017 to former President Rafael Correa. (I)