The Desertec Concept and the ICSID Convention - Investing into North African Solar Power - page 203

catalog of what contribution to the economic development of the host state entails,
and a guideline for the Desertec Concept to comply with this requirement.

3.7.4.6 Contribution to the Economy in Other Treaties
and Conventions

There also other conventions or treaties requiring a contribution to the local
economic and development. First of all, there are treaties like the 1993 Framework
Cooperation Agreement between the EEC and the Republics of Costa Rica, El
Salvador, Guatemala, Honduras, Nicaragua and Panama, which includes provisions
on the contribution to the development. 588
Next, there is the MIGA Convention. Art. 12(d) of the MIGA Convention limits
MIGA Convention application to investments which contribute to the economic
and social development of the host country. 589 In the context of MIGA practice,
there is a difference between a subjective and an objective contribution. The 2009
Operational Regulations of MIGA stipulate this difference. The objective contri-
bution encompasses the potential to generate revenue for the host state, maximizing
the host state s productive potential, producing exports or import substitutes and

reducing vulnerability to external economic changes, the diversification the eco-
nomic activities, impact on employment and income, the amount of knowledge
transfer, the effect on the social infrastructure and the environment. 590 The scope of
the subjective contribution includes compliance with the host states laws and
projects consistency with its declared local development objectives. 591
Since MIGA is part of the World Bank, like the ICSID, there is a possibility that
either side may make use of each other. In 2013 an ICSID tribunal actively used
parts of the MIGA Convention for the first time. 592 Although they did not discuss
Art. 12(d) MIGA, this illustrates that the possibility of future usage is significantly
higher. The protection according to MIGA is desirable for the investor. This
protection is only possible if the investor complies with Art. 12(d) of the MIGA
Convention. The investor might not be faced with the issue of contribution to the
economic development of the host state within ICSID arbitration, but if the MIGA
Convention applies. This also underlines that the need for the Desertec Concept to
comply with these standards. Yet neither the ICSID nor MIGA Convention offer
proper definitions.

'

588

As the treaty regulates the obligations to e.g. train staff, in: Zampetti and Sauv´ ( 2007 ),
211 (239-241).
589 Commentary on Convention - Establishing the Multilateral Investment Guarantee Agency
( 2010 ), para 21.
590 MIGA ( 2012 ), 47 para 3.06.
591 MIGA ( 2012 ), 48-49 para 3.09.
592 ICSID [2013] ARB/07/30—Decision on Jurisdiction, 66-67 para 246.