Public Purpose in International Law: Rethinking Regulatory Sovereignty in the Global Era.

• Author: Logue, Thomas
• Position: Book review

Public Purpose in International Law: Rethinking Regulatory Sovereignty in the Global Era

By Pedro J. Martinez-Fraga & C. Ryan Reetz

How should the rule of law cabin the power of a country to expropriate the property of foreign investors for national public purposes? At one extreme, the weary and cynical answer, identified by the Athenians millennia ago, is simply "the strong do what they can and the weak suffer what they must." At the other extreme, the facile and academic answer is that national sovereignty in this regard must immediately be limited by the terms of contract and the principles of due process.

Refreshingly, the authors of this book, two Florida litigators specializing in international arbitrations involving sovereign states, offer a more realistic, daunting, and ultimately progressive approach. While recognizing that the first approach is outdated in a world that is increasingly economically integrated, the authors acknowledge that a state may very well have two legitimate, but conflicting obligations--one owed to foreign investors and one owed to its citizens. Seeking a balance of these two competing obligations is the ambitious goal of this book.

In moving toward that balance, the authors review how the concept of public purpose justifying such a taking of foreign investor's property has been addressed in customary international law, human rights law, the North Atlantic Free Trade Agreement, and certain model bilateral investment treaties, such as those between Canada and Jordan; and between Colombia and Japan and in foreign investment protection statutes enacted by 17 countries. The authors note that these documents often conflict with each other. Worse, they are sometimes even internally inconsistent. This confusion only exacerbates the problem and invites arbitrary actions by host states.

First and foremost, the authors contend, the understanding of "public purpose," which justifies such expropriation cannot be left to the country seizing the foreign asset. Among other reasons, that country itself may be the victim of a dictatorship or oligarchy, forms of government that are less likely to take seriously the needs of others in the international community. Instead, the definition of public purpose...