Guidelines on the Treatment of Foreign Direct Investment

After the United Nations and an earlier 1985 World Bank effort both failed to produce a binding international convention on the treatment of foreign direct investment due to deep disagreement among countries, World Bank Vice President and General Counsel Ibrahim Shihata proposed in 1991 that the Bank instead draft non-binding "soft law" guidelines through its Development Committee. The Committee's draft set the standard for compensation upon expropriation as "appropriate," further defined as compensation that is adequate, effective, and paid without undue delay; the draft was circulated to governments and businesses for comment, drawing strong dissent from the United States on the expropriation standard in particular, before the Committee published the final Guidelines in 1992.