Third Columbia International Investment Conference

 
Center on Global Legal Problems (Columbia Law School)
World Trade Institute NCCR-IP11 and University of Fribourg (Switzerland)
Nankai University (China)

Foreign Direct Investment by State-Controlled Entities: Do the Rules Need Changing?

The process of global economic integration has accelerated during the past three decades, with world foreign direct investment (FDI) flows rising from $40-50 billion at the beginning of the 1980s to $1.5 trillion in 2007. Yet, in spite of the trend towards market liberalization and privatization during this period, the role of the state has arguably become more important in recent years.

Indeed, many of the emerging market state-owned enterprises that survived the earlier waves of privatization are now flourishing, thanks in particular to booming global commodity prices and increased export earnings. Emerging market governments are also drawing on their accumulating exchange reserves to establish sovereign wealth funds for investment abroad. These two developments have contributed to a substantial increase of outward FDI from emerging markets, reaching $210 billion in 2006 (five times world FDI flows during the early 1980s).

In response to the rising importance of state-owned enterprises and sovereign wealth funds – collectively referred to here as “state-controlled entities” (SCEs) – policy-makers are re-thinking their own investment regulatory frameworks. The world has thus witnessed a resurgence of the role of the state vis-à-vis markets, with governments acting as both a source of – and potential impediment to – FDI.

The principal issues raised by this phenomenon will be addressed systematically in a conference – to take place October 1-2, 2008 at Columbia University – organized by the Vale Columbia Center on Sustainable International Investment, in cooperation with Columbia Law School’s Center on Global Legal Problems; the World Trade Institute NCCR-IP11 and the University of Fribourg (Switzerland); and Nankai University (China).

The Conference will examine the role of state-controlled entities in the world FDI market, with a particular emphasis on the role of sovereign investment agencies (those parts of SWFs engaged in FDI), and will explore the range of policy responses being considered to deal with this problématique. 

October 1, 2008, Wednesday

9:45 – 10:15    Welcome and opening remarks

Karl P. Sauvant, Executive Director, Vale Columbia Center on Sustainable International Investment

José E. Alvarez, Hamilton Fish Professor of International Law and Diplomacy and Director, Center on Global Legal Problems, Columbia Law School

Philippe Gugler, Professor of Economics and Social Sciences, University of Fribourg, Switzerland

Xian Guoming, Professor of Economics and International Business, President Assistant, Nankai University; Director of the Center for Transnationals’ Studies; Dean of TEDA College

10:15 - 11:00   Keynote: “The rise of  state-controlled entities in context”, Jeffrey D. Sachs, Director, The Earth Institute at Columbia University; Quetelet Professor of Sustainable Development, Columbia University

11:15 - 13:00   Session I: What do we know?

1.      “What do we know about state-controlled entities and especially SWFs? “, Karl P. Sauvant, Executive Director, Vale Columbia Center on Sustainable International Investment, and Kamil Gérard Ahmed, Associate, Akin Gump Strauss Hauer & Feld LLP

3.      “FDI by state-controlled entities and western financial institutions: a marriage made for money?”, Katharina Pistor, Professor of Law, Columbia Law School

Lead discussants:

Lawrence Goodman, Managing Director and Head of Emerging Markets Strategies, Bank of America

Julien Chaisse, Alternate Leader, Investment Division (IP11), World Trade Institute, Bern, Switzerland  

13:00 – 15:00  Luncheon address: “The state as investor: the (re)-emergence of state capitalism?”, Jagdish Bhagwati, Professor of Economics and Law,  Columbia University

15:00 – 18:00  Session II: Should national security trump predictability for investors?

Chair: Richard Gardner, Professor of Law and International Organization, Columbia Law School

4.      “National security and predictability for investors at the national level”, Mark A. Clodfelter, Counsel, Winston & Strawn LLP, previously Assistant Legal Adviser for International Claims and Investment Disputes, U.S. Department of State

5.      “National security and investor predictability at the international level”, Patrick Juillard, Professor Emeritus, Sorbonne University, Paris

6.      “What could be a common approach that reconciles national security and investor predictability?”, David M. Marchick, Managing Director of Government and Regulatory Affairs, The Carlyle Group

Lead discussants:

Rudolph Dolzer, Professor, Director, Institute of International Law, University of Bonn

Andreas F. Lowenfeld, Rubin Professor of International Law, New York University Law School

James Mendenhall, Partner, Sidley Austin LLP, former U.S. Trade Representative General Counsel

19:00 – 21:00  Dinner address: “Systemic implications of large pools of anonymous capital: risks and the need for transparency”, Manfred Schekulin, Chairperson, OECD Investment Committee

October 2, 2008, Thursday

10:00 – 13:00  Session III: Should FDI by state-controlled entities be regulated differently than FDI by other entities?

Chair: José E. Alvarez, Hamilton Fish Professor of International Law and Diplomacy, and Director, Center on Global Legal Problems, Columbia Law School

7.      “The resurrection of screening mechanisms: is CFIUS a model for other countries?”, Alan Larson, Senior Advisor, Covington & Burling LLP; Mark Plotkin, Partner, Covington & Burling LLP; David Fagan, Associate, Covington & Burling LLP

8.      “Best practices of countries host to state-controlled entities”, Manfred Schekulin, Chairperson, OECD Investment Committee

9.      “A code of conduct for SWFs and other state-controlled entities?” [IMF ]

Lead discussants:

Rainer Geiger, Associate Professor of International Law, Sorbonne University, Paris,  former Deputy Director, Financial and Enterprise Affairs Division, OECD

15:00 – 17:45  Concluding Roundtable: Do the rules need changing for state-controlled entities?

Howard Mann, Senior International Law Advisor, International Institute for Sustainable Development

Todd Malan, President and CEO, Organization for International Investment,
Washington

Curtis Milhaupt, Fuyo Professor of Japanese Law and Albert E. Cinelli Enterprise Professor of Law, Columbia Law School; Director, Japanese Legal Studies Center

José Antonio Ocampo, Professor of Professional Practice in International and Public Affairs, SIPA, Columbia University; former UN Under-Secretary-General for Economic and Social Affairs and Minister of Finance and Public Credit, Colombia

17:45 - 18:00  Closing remarks

Xian Guoming, Professor of Economics and International Business, President Assistant, Nankai University; Director of the Center for Transnationals’ Studies; Dean of TEDA College

Philippe Gugler, Professor of Economics and Social Sciences, University of Fribourg, Switzerland

José E. Alvarez, Hamilton Fish Professor of International Law and Diplomacy and Director, Center on Global Legal Problems, Columbia Law School

Karl P. Sauvant, Executive Director, Vale Columbia Center on Sustainable International Investment