April 26th and 27th, 2002
Several recent awards by international arbitration tribunals established under the dispute settlement system of the North American Free Trade Agreement (NAFTA) have addressed claims by foreign investors that their investments were "expropriated" by environmental regulations that limited their ability to do business. In one case, Metalclad v. The United Mexican States, the Arbitral Tribunal ruled in August 2000 that Mexico 's toleration of local authorities' improper denial of a building permit, Mexico 's failure to provide a transparent and predictable system of environmental and land use regulation, and a decree setting the area including the site aside as an ecological preserve all constituted acts "tantamount to expropriation." The Tribunal ordered Mexico to pay $17 million in financial compensation and interest for the violation of NAFTA. The award was recently upheld in part and overturned in part by the Supreme Court of British Columbia.
Such awards, as well as decisions handed down under the auspices of international bodies such as the World Bank's International Center for the Settlement of Investment Disputes and the European Court of Human Rights, have attracted considerable attention from those concerned about the balance bilateral investment treaties and multilateral agreements such as NAFTA and the European Energy Charter have struck between the property rights of foreign investors and collective or community rights relating to social objectives such as environmental protection. The issue of how much protection to afford the property rights of foreign investors also has become central to debates over the proposed Free Trade Agreement of the Americas .
The Center on Environmental and Land Use Law at NYU School of Law, and the NYU Environmental Law Journal are sponsored the first major conference to address these crucial issues. The Conference provided participants an opportunity to learn about recent legislative and arbitral developments, to draw upon the experience of scholars, policy-makers, and advocates from North and South America and Europe , and to delve into the underlying normative and pragmatic questions raised by the debate.
The first panel, Overview of Regulatory Expropriation Issues in International Law, brought conference participants up to date on how the issue of regulatory expropriation has become central to debates over bilateral and multilateral investment treaties. The second panel, Sources of Law and Theory to Guide International Jurisprudence on Regulatory Expropriations, provided a summary and critique of the major possible sources of legal, political, and economic theory that might inform international regulatory expropriation jurisprudence. The third panel turned to the issue of What Should "Expropriation" or "Tantamount to Expropriation" Mean. That panel explored leading normative theories about whether international law should recognize the concept of regulatory expropriations and, if so, how it ought to define such expropriations. The fourth panel, How Should Compensation be Measured When There is an Expropriation?, explored different theories about how the property interest "expropriated" through regulation should be defined, and valued, for the purposes of compensation. The Conference concluded with a roundtable discussion on Domestic Challenges if Multilateral Investment Treaties Are Interpreted to Expand the Compensation Requirement for Regulatory Expropriations Beyond a Signatory State's Domestic Law.
The conference proceedings were published in the NYU Environmental Law Journal, Volume 11 (2003).