Balancing the Interests Between TNCs and Host Developing States - The Role of Law

This thesis is focused on examining the lack of balance of interests between transnational corporations (TNCs) and host developing states. It also examines the aspirational differences between the parties vis-à-vis the investment practice(s) over the past few decades and reviews the perception of foreign direct investments (FDIs). The contribution of TNCs has been a heated topic of debates in international circles and policy-makers were unable to find solutions, not for the lack of attempts such as the UN draft codes of conduct on TNCs, the Havana Charter, MAIs and others, but due to gaps in aspirations between the parties, the negotiations were unsuccessful. There were also some successful attempts from the developing states, namely the UN Declaration on Permanent Sovereignty over Natural Resources and the UN Charter on Economic Rights and Duties of States. This revealed the limits of law in regulating the conduct of TNCs in host developing states during the course of foreign investments. Emphasis is given to the capacity building and the system of protection of investments, namely by means of bi-lateral investment treaties (BITs), as well as protecting the interests of both of the parties. International efforts to regulate foreign investments are gaining momentum. Research showed that changes are underway and the re-negotiations clause might be a way forward. It also makes an attempt in understanding the international investment law and increasing frustration with the existing mechanism for settlement of investment disputes, which arises from violations of BITs. It revealed that the role of law is of fundamental importance to offer protection to the investments and to ensure that both parties benefit from such investments, by balancing their interests.