A Brazilian Bilateral Investment Treaty

The Brazilian Ministry of Development, Industry and Foreign Trade has just announced the country’s first bilateral investment treaty in the last two decades. Brazil and Mozambique, both Portuguese-speaking former colonies, have agreed upon cross-border cooperation and facilitation in international investment. Other countries, mostly in Africa, but also in Latin America, are expected to enter into similar treaties presently. It seems too early, though, to put a finger as to where the Brazilian model stands in the landscape of investment treaties. On the one hand, old-style investor protection standards, such as rules on expropriation and nationalization, are revamped by the enshrinement in the treaty of corporate social responsibility principles, for instance. On the other hand, traditional investment and investor definitions may come across as fruitless inasmuch as the dispute settlement mechanism provides for the States, and not investors, to refer investor-state conflicts to arbitration. One could wonder whether this would not constitute just a plain diplomatic protection, now clad in a slightly more democratic outfit for investors. But then again Brazil has attracted a sizeable amount of foreign direct investment in the past decades without having ratified any of the treaties it has entered into in the 90’s - so Brazilian companies might just as well settle for always having to come to Brazilian authorities before they can start an investor-state arbitration abroad.