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Date: Mon, Mar 9, 2020 at 2:34 PM
Subject: The useful institution of an investment ombudsperson (Columbia FDI
Perspective No 273)
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*Columbia FDI Perspectives*
Perspectives on topical foreign direct investment issues
No. 273  March 9, 2020
Editor-in-Chief: Karl P. Sauvant ([log in to unmask])
Managing Editor: Alexa Busser ([log in to unmask])
*The useful institution of an investment ombudsperson*
*** <#m_-5800899207035768398__edn1>
Ricardo Figueiredo de Oliveira** <#m_-5800899207035768398__edn2>

As part of efforts to attract, retain and expand FDI, several countries
have created different grievance-redress mechanisms. One of these consists
of an “investment ombudsperson,” which plays the role of a facilitator
between foreign investors and the relevant public agencies to deal with
their concerns. In this way, it is possible in a single government body to
address investors’ issues regarding laws and administrative procedures and
to handle post-investment difficulties involving government agencies in
specifics areas such as labor, taxation, environment, finance, and

The Republic of Korea’s model is a worldwide reference point for grievance
redress mechanisms. The Office of the Foreign Investment Ombudsman (OFIO),
a grievance-resolution center and an advocacy body for foreign investors
established in 1998, has played a crucial role in improving the country’s
business environment for foreign investors. After different iterations
since its establishment, the OFIO now has a unique connection with the
aftercare services that the Korea Trade-Investment Promotion Agency (KOTRA)
offers to investors, working in a complementary way.[1]
<#m_-5800899207035768398__edn3> To be effective, investment ombudspersons
must have high-level government empowerment, the support of the bodies
involved and good governance to request detailed information from the
administrative agencies and public entities deemed relevant and crucial to
the resolution of foreign investor grievances.

Countries wishing to pursue Korea’s success do not necessarily need to
replicate the Korean model, but they must ensure that the solutions for
regulatory or administrative improvements presented by ombudspersons can be
discussed and possibly adopted by a policy-making lead agency and/or the
appropriate bodies within their areas of competence, ensuring impartiality
and legitimacy.

In Brazil, the National Congress did not ratify the bilateral investment
treaties signed during the 1990s, due to many concerns about this approach,
mainly regarding the investor-state dispute-settlement (ISDS) provisions
that are now under review in the UNCITRAL.[2]
<#m_-5800899207035768398__edn4> Thus, it was necessary to elaborate a new
approach toward international investment agreements: the Cooperation and
Facilitation Investment Agreement (CFIA), approved in 2013 by the Foreign
Trade Board (CAMEX), the Brazilian foreign trade and investment
policy-making lead agency.

The foundations or pillars of CFIAs go beyond protection provisions. They
focus on cooperation and investment facilitation to increase confidence and
investment flows, such as improving institutional governance, establishing
mechanisms for mitigating risks and preventing disputes, and developing
thematic agendas for investment cooperation and facilitation.

As one of the mechanisms for improving institutional governance,
strengthening the investment climate and preventing disputes, CFIAs
introduced the investment ombudsperson concept, inspired by the Korean
model. The Brazilian Direct Investment Ombudsman (DIO) was established
within CAMEX, making the necessary adaptations for Brazil, a federative
country.[3] <#m_-5800899207035768398__edn5>

Unlike OFIO’s structure,[4] <#m_-5800899207035768398__edn6> Brazil needed
to develop its structure to meet the inherent needs of a federative
country. Accordingly, the DIO coordinates a Focal Point Network comprised
of main agencies and entities of the public administration at the national
and subnational levels (including the investment promotion agencies) that
work together to deal with investors’ concerns. Thus, the DIO can handle
complaints related to the federal government and to Brazil’s different
states, respecting their regulatory competencies.

Given that investments are made at the subnational level, ombudspersons
must indeed coordinate closely with the relevant agencies and entities of
subnational governments, to obtain information and their engagement to
support investors. At the same time, maintaining the confidentiality of
requests, inquiries and information received from investors needs to be
guaranteed. To improve the Direct Investment Ombudsman institution, CAMEX
is cooperating with the World Bank through a technical-assistance project
grounded in analytical work, stakeholders’ consultations and international
experience.[5] <#m_-5800899207035768398__edn7>

Over time, investment ombudspersons may identify systemic grievances
reported by foreign investors related to legislation or administrative
procedures that should be addressed. A specific lead agency should then be
empowered to address the ombudspersons’ recommendations. In the Republic of
Korea, the investment ombudsperson is also chairperson of the Regulatory
Reform Committee, responsible for improving regulations. Brazil has no
regulatory reform committee. But the Direct Investment Ombudsman
institution is represented in the National Investment Committee, which is
the policy-making lead agency within CAMEX, and where it can suggest
investment regulatory reforms to improve the investment climate in the

Therefore, investment ombudspersons are critical in providing insights to
policymakers to make regulatory adjustments and undertake possible reforms
to make the business environment more attractive for foreign investors.
Countries should consider establishing an investment ombudsperson that can
coordinate with policymakers at the national and subnational levels to best
respond to investors’ needs and to benefit the country’s economy.

* <#m_-5800899207035768398__ednref1> *The Columbia FDI Perspectives are a
forum for public debate. The views expressed by the author(s) do not
reflect the opinions of CCSI or Columbia University or our partners and
supporters. Columbia FDI Perspectives (ISSN 2158-3579) is a peer-reviewed
** <#m_-5800899207035768398__ednref2> Ricardo Figueiredo de Oliveira (
[log in to unmask]) is a foreign trade analyst working at the
Ministry of Economy of Brazil. The author is grateful to Felipe Hees, Ivan
Nimac and an anonymous reviewer for their helpful peer reviews.
[1] <#m_-5800899207035768398__ednref3> Françoise Nicolas, Stephen Thomsen
and Mi-Hyun Bang, “Lessons from investment policy reform in Korea,” OECD
Working Papers on International Investment, no. 2013/02 (2013).
[2] <#m_-5800899207035768398__ednref4> Working Group III: Investor-State
Dispute Settlement Reform – working documents available at:
[3] <#m_-5800899207035768398__ednref5> Established by the Decree 8663/2016.
The DIO website is available at
[4] <#m_-5800899207035768398__ednref6> Available at
[5] <#m_-5800899207035768398__ednref7> The World Bank Group assists
governments in establishing and/or implementing their own mechanisms.
*The material in this Perspective may be reprinted if accompanied by the
following acknowledgment: “Ricardo Figueiredo de Oliveira, ‘The useful
institution of an investment ombudsperson,’ Columbia FDI Perspectives,
March 9, 2020. Reprinted with permission from the Columbia Center on
Sustainable Investment (**
<>**).” A copy should kindly be sent to the
Columbia Center on Sustainable Investment at **[log in to unmask]*
<[log in to unmask]>*.*

For further information, including information regarding submission to the
*Perspectives*, please contact: Columbia Center on Sustainable Investment,
Alexa Busser, [log in to unmask]

*Most recent Columbia FDI Perspectives*

   - No. 272, Wolfgang Alschner, ‘Squaring bilateralism with
   multilateralism: What investment law reformers can learn from the
   international tax regime,’ February 24, 2020
   - No. 271, Julien Chaisse, ‘The Regional Comprehensive Economic
   Partnership’s investment chapter: One step forward, two steps back?,’
   February 10, 2020.
   - No. 270, Paulo Cavallo, ‘Learning from Brazil’s bilateral investment
   treaties,’ January 27, 2020

*All previous FDI Perspectives are available at
<>**. *

*Other relevant CCSI news and announcements*

   - *CCSI is accepting applications **until March 15, 2020 *for its Executive
   Training on Investment Treaties and Arbitration for Government Officials
   Please visit our website
   for more information, including on how to apply.
   - *CCSI announces a call for papers for the Global Research Alliance for
   Sustainable Finance and Investment (GRASFI) 3rd Annual Conference*,
   hosted by CCSI on September 10-11, 2020. The deadline for paper submission
   has been *extended to April 15, 2020*. Themes for papers include
   climate-related risks and finance, the role of the state (e.g., central
   banks, development banks, and regulators) in advancing sustainable finance,
   and social and human rights dimensions of sustainable finance, among
   others. A full list of themes, further information about the conference and
   submission details can be found on our website
   - *CCSI is pleased to announce a call for papers for the 2019 edition of
   the Yearbook on International Investment Law and Policy*, published by
   Oxford University Press (OUP). The *Yearbook* monitors current
   developments in international investment law and policy. Original
   contributions to be considered for publication in the *Yearbook* are
   accepted on a rolling basis *until March 27, 2020*; more information
   including submission details is available on our website

Karl P. Sauvant, Ph.D.
Resident Senior Fellow
Columbia Center on Sustainable Investment
Columbia Law School - Earth Institute
Ph: (212) 854-0689
Fax: (212) 854-7946
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*Karl P. Sauvant, PhD*

*Resident Senior Fellow*
*Columbia Center on Sustainable Investment*
Columbia Law School - The Earth Institute, Columbia University
435 West 116th St., Rm. JGH 825, New York, NY 10027
| p: (212) 854 0689 | cell: (646) 724 5600 e: [log in to unmask]
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