Ecuador establishes commission to audit investment treaties
Dow Jones Business News | October 08, 2013
Ecuador establishes commission to audit investment treaties
QUITO, Ecuador—Ecuador has established a special commission to audit bilateral investment treaties, or BITs, signed with different countries and by several governments, the country’s Foreign Minister Ricardo Patino said Tuesday.
The Commission will work in a similar way to how Ecuador audited its external debt in 2008.
In 2008, an special debt audit commission said it uncovered "illegality and illegitimacy" in the country’s foreign debt and recommended it stop servicing the nation’s global bonds. Based on this report, the government of President Rafael Correa defaulted on about $3.2 billion of global 2012 and 2030 bonds.
Mr. Patino said in a TV interview that the commission, which includes lawyers from Colombia, Argentina, Uruguay, Mexico and Venezuela, among others, should deliver a report in eight months.
According to Mr. Patino, the commission must determine, among other things, whether the BIT’s have violated the Ecuador’s sovereignty and whether those treaties have been beneficial for the Andean country.
The purpose, said Mr. Patino, is "to discover things that in the past did too much damage to Ecuador" and to take decisions.
Mr. Correa’s government has constantly criticized bilateral investment treaties and the international system for investment arbitration, saying that they favor multinational corporations.
Companies like Chevron Corp. ( CVX ) and Occidental Petroleum Corp. ( OXY ) have arbitration procedures underway against the Andean country.
Mr. Correa has said that those lawsuits could plunge the country into bankruptcy.
Since 2008, the country has cancelled about nine bilateral investment treaties. The country has also withdrawn from the International Centre for Settlement of Investment Disputes.
Write to Mercedes Alvaro at mercedes.alvaro@wsj.com
