Ecuador Terminate All Its Bilateral Investment Treaties
On the heels of the publication of a report by the country’s Investment Treaties Audit Commission, Ecuador became the fifth country to terminate all its bilateral investment treaties (BITs). Among the findings prompting the government towards its decision:
- The BITs signed by the country failed to deliver promised foreign direct investment.
- The BITs contradict and undermine the development objectives laid out in the country’s constitution and its National Plan for Living Well.
- Investors have disproportionately benefited when suing Ecuador using BITs. The total amount disbursed so far by the country has been US$1.498 billion, equivalent to 62% of health spending. On top of that, the country has spent US $156 million in legal fees.
- Legislators who ratified these treaties did not consider the risk for the country. Congress ratified most treaties without a legislative debate.