Page 134 - Law of Peace, Volume ,

Pam 27-161-1

There are few if any issues in international law today on which opin- that a taking involving discrimination against aliens is
ion seems to be so divided as the limitations on a State's power to ex- wrongful under international jurispurdence. 71 The heart
propriate the property of aliens. There is, of course, authority, in inter- of the problem, however, is to what extent does interna-
national judicial and arbitral decisions, in the expressions of national tional law impose a duty to pay compensation in the event
governments, and among commentators for the view that a taking is im-
proper under international law if it is not for a public purpose, is dis- of a taking of alien property by a state when the taking is
criminatory, or is without provision for prompt, adequate, and effective for a public purpose, is nondiscriminatory, and is not
compensation. However, Communist countries, although they have in violative of a treaty. To what extent must compensation
fact provided a degree of compensation after diplomatic efforts, com- be paid of a takingislawful under internation law? In can-
monly recognize no obligation on the part of the taking country. Certain
representatives of the newly independent and underdeveloped countries nection with this question, attention is called to the
Have questioned whether rules of state responsibility toward aliens can Resolution on Permanent Sovereignty over National
bind nations that have not consented to them, and it is argued that the Resources. 72
traditionally articulated standards governing expropriation of property
reflect "imperialist" interests and are inappropriate to the circum- RESOLUION ON PERMANENT SOVEREIGNTY OVER
stances of emergent states. NATURAL RESOURCES
?he disagreement as to relevant international law standards reflects The General Assembly
an even more basic divergence between the national interests of capital Consideringthat nothing in paragraph 4 below in any way prejudices
importing and capital exporting nations and between the social the position of any Member State on any aspect of the question of the
!deologies of those countries that favor state control of a considerable rights and obligations of successor States and Governments in respect of
portion of the meLans of production and those that adhere to a free en- property acquired before the accession to complete sovereignty of coun-
ierprise system. tries formerly under colonial rule, ...
r 'P Declares that:
The disparitiesof views on the basic principles of state 1. The right of peoples and nations to permanent sovereignty over
responsibility, examined previously in this chapter, are their natural wealth and resources must be exercised in the interest of
tgflected in, and to a considerable extent are focused on, their national development and of the well-being of the people of the
differing views of the international law principles applica- State concerned.
2. The exploration, development and disposition of such resources,
b.k,to the taking of alien-owned property. Together with as well as the import of the foreign capital required for these purposes,
many other capital exporting countries, the United States should be in conformity with the rules and conditions which the peoples
has consistently maintained that a taking of property for and nations freely consider to be necessary or desirable with regard to
public purposes is contrary to international law unless it is the authorization, restriction or prohibition of such activities.
accompanied by prompt, adequate, and effective compen- 3. In cases where authorization is granted, the capital imported and
the earnings on that capital shall be governed by the terms thereof, by
sation. In sharp contrast, the traditional Latin American
the national legislation in force, and by international law. The profits
view, now espoused by many developing countries in derived must be shared in the proportions freely agreed upon, in each
Africa and Asia as well, is that the international legal case, between the investors and the recipient State, due care beiig taken
obligation of the state to pay compensation to an alien to ensure that there is no impairment, for any reason, of that State's
whpse property has been taken involves no more than a sovereignty over its natural wealth and resources.
duty to compensate the alien to the extent that its own na- 4. Nationalization, expropriation or requisitioning shall be based on
grounds or reasons of public utility, security or the national interest
tionals are compensated. 68 Others would deny any inter- which are recognized as overriding purely individual or private interests,
national legal responsibility on the part of a state to pay both domestic and foreign. In such cases the owner shall be paid ap-
compensation to an alien whose property has been taken. propriate compensation, in accordance with the rules in force in the
State taking such measures in the exercise of its sovereignty and in ac-
b. Limitations. At this point, it should be noted that, cordance with international law. In any case where the question of com-
.under certain circumstances, the taking of property is
pensation gives rise to a controversy, the national jurisdiction of the
wrongful mder international law, with the result that a State taking such measures shall be exhausted. However, upon agree-
duty to make reparation will arise quite independently of ment by sovereign States and other parties concerned, settlement of the
whether compensation has been paid. The specific case dispute should be made through arbitration or international adjudica-
about which there appears to exist no room for dispute is tion.
5. The free and beneficial exercise of the sovereignty of peoples and
when the taking is in violation of a treaty. In the Case
nations over their natural resources must be furthered bv the mutual
Concerning the Factory at Chonow, 69 the Permanent respect of States based on their sovereign equality.
Court held the taking to be in violation of the German- 6. International co-operation for the economic development of
Polish Convention Concerning Upper Silesia and that, ac- developing countries, whether in the form of public or private captial in-
vestments, exchange of goods and services, technical assistance, or ex-
cordingly, compensation equivalent to restitution of the
change of scientific information, shall be such as to further their inde-
property in kind was called for. It has also been urged that pendent national development and shall be based upon respect for their
a,taking not for a public purpose would violate interna- sovereignty over their natural wealth and resources.
tional law. 70 Finally, there is broad support for the view 7. Violation of the rights of peoples and nations to sovereignty over
their natural wealth and resources is contrary to the spirit and principles
68. This is a logical extension of the "equal treatment" theory pre-
viously discussed. 71. Id. at 8 166. See also Fatouros, Government Guarantees to
69. Case Concerning the Factory at Chonow (Claim for Indem- Foreign Investors 249-51 (1962) [hereinafter cited as Fatouros]; S.
nity) [I9281 P.C.I.J., ser. A, No. 17 [hereinafter cited as Chorzow Fac- Friedmann, &propriation in International Law 189-93 (1953).
tory Case]. 72. This resolution was adopted by the U.N. General Assembly by
70. Restatement, supra, note 11 at 8 185. 87-2 with 12 abstentions.