ARBITRATION AND CONCILIATION
Some critics say that the dispositions of the new investment law bring more questions than legal certainty to foreign investors. First, the law mentions that all renegotiated treaties concerning foreign investments shall meet the standards of the Bolivian Constitution and the new investment law. Implicitly, this means that the Bolivian legislature intends to emphasize that the Bilateral Investment Treaty (BIT) will be renegotiated one way or another by the Bolivian state and/or other countries.
Second, it is difficult to explain the contents of the third provision of the law: “until the new standard for conciliation and arbitration of dispute is approved, the parties to the conflict shall apply the provisions of Law No. 1770 of Arbitration and Conciliation.” Critics say that if you stick to the scope of the BIT’s in force, the transitional provision could implicate a normative collision.
As an example, critics mention the agreement between Spain and Bolivia that is currently in effect. The agreement indicates that “in the absence of an amicable settlement, the dispute may, at the option of the investor, be subjected to a competent court of the contracting party in whose territory the investment was made; or a court of “ad hoc” arbitration established under the Arbitration Rules of the United Nations Commission on International Trade Law.” It is the investor who finally decides the Court of Arbitration. Faced with this situation, critics say that the provisions of the investment law pose more questions than certainty for the purpose of resolving disputes and promoting foreign investment. “Do Spanish businesses have certainty about what is the legal framework governing the settlement of disputes in Bolivia?” Critics believe the question still remains unanswered… Indeed, some critics believe that the investment law will go a long way in negotiations before being fully implemented. They wonder whether it was really worth the legislative effort, or conversely, if it was merely an “intent” to solve all disputes in Bolivian territory and renegotiate all BIT’s. Despite the “legal uncertainty” that surrounds the law, however, Spain hails Bolivia’s new stance on foreign investment.
SPAIN HAILS BOLIVIA’S NEW STANCE ON FOREIGN INVESTMENT
After receiving guarantees from president Evo Morales that the future law on investments will provide greater long-term judicial protection and security, Trinidad Jimenez, Spain’s foreign minister, said that Spanish investors and companies had no reason to “fear” investing in Bolivia. She transmitted the message at a joint press conference with Bolivian counterpart David Choquehuanca at the Foreign Ministry in La Paz. “We have no reason for any kind of fear,” she said, adding that the future investment law will provide “certainty and security” to Spanish companies.
Before her announcement, Jimenez had conversations with a group of Spanish executives who had expressed their concern about Bolivia’s nationalization plans. Some of the biggest concerns were over companies like Abertis, which operates airports in La Paz, Santa Cruz and Cochabamba; banking giant BBVA, which administers a pension fund; and Red Electrica and Iberdrola, after Morales began nationalizing the electricity sector this year. The companies had also complained that the Bolivian legal structure forces them to give up their right of appeal to international organizations to resolve disputes through arbitration.
Jimenez responded by saying that Spain “at all times respects” the rules imposed by the Andean nation, but in a way that dispels concerns and “guarantees the permanence” of the companies in Bolivia, a country with some of the biggest mineral and hydrocarbon deposits in the region.
Choquehuanca, the Bolivian foreign minister, said “his country wishes to attract foreign companies to provide the technology that is lacking here.” Nonetheless, he warned that Bolivia “needs partners who help us emerge from poverty,” not companies that want to appropriate its riches. “In the past there were investments, but those investments made us poorer…”
At the end, Jimenez stressed the “firm commitment” of Spanish companies to contribute to Bolivia’s economic growth and to increase their activities in such sectors as renewable energy, tourism and engineering.
CONCLUSION
Bolivia is a country with one of the biggest mineral and hydrocarbon deposits in the region. Its ‘turnaround’ as the economy rises from instability is capturing investor attention. Countries like Spain that already have settled companies in Bolivia, have confidence in the legal certainty that the new investment law brings to foreign investors; however, some critics believe that until the Arbitration Act is carefully drafted and implemented, investors should pay close attention to the laws governing foreign investments, in particular, arbitration and conciliation.