LIST OF ABBREVIATIONS Abbreviation Description AAA American Arbitration Association ACIA ASEAN Comprehensive Investment Agreement AF Additional Facility ANDI Algeria's Agence National d
BASIC THEORETICAL ISSUES ON INVESTOR - STATE
An overview of international investment and Investor - State dispute
Considering legal documents, we see that Investment law 2014 issued conception of “business investment”, according that:
Business investment is the process by which an investor allocates resources to enable business activities, typically by establishing an economic organization, contributing capital, or purchasing shares in an economic entity It can also occur through contractual arrangements or by executing an investment project, aligning capital with strategic growth and operational objectives.
The popular conception of “Investment” is defined in the BIT conventions Vietnam signs or participates in with other countries, which shape how cross-border investments are understood and regulated In particular, Chapter 4, Article 1, Item 1 of the Vietnam–United States Bilateral Trade Agreement (VUS-BTA) specifies the investment framework between Vietnam and the United States, outlining the terms, scope, and protections applicable to investors under this agreement.
"Investment" means every kind of investment in the territory of a Party owned or controlled directly or indirectly by nationals or companies of the other Party ”
According to Article 4, item c ASEAN Comprehensive Investment Agreement (ACIA):
“Investment” means every kind of assets owned or controlled an investor including but not limited to:
(i) Movable property and real estate, property rights such as pledgement, mortgage or guarantee;
(ii) Stock, shares, bond, debentures, and every form of participating in a legal entity and rights and benefit received from it
(iii) Intellectual property empowered according to law and regulations of each member state;
(iv) Right of demanding money or for every contract implementation related to business and having financial value;
(v) Contractual rights, such as under turnkey, construction, management, manufacture contract or allocation of tariff contract; and
Franchising is a mandatory framework for carrying out economic activities, with financial value recognized and empowered by law or contract, including franchising arrangements for research, cultivation, extraction, or exploitation of natural resources.
Under the term 'investment,' the scope includes not only the principal amounts invested but also the returns generated, such as profit, interest, profit from capital, dividends, royalties, and emoluments Any change in the form of the invested and reinvested assets does not affect their classification as investments.
Although Conceptions of investment mentioned above are different, there are general features as follows:
The first, the purpose of investment is profit For enterprise, benefits tended by them are recovery rate, profit, development of position of the enterprise For the State, investment activities tend to make social economic benefits such as employment, supply of public products and services, protection of resources and environment and firm development
The second, the investment are only implemented when the investor or procuring agency brings his capital in investment process The client can be organizations, individuals and the state Investment capital can exist under many forms such as tangible assets, intangible assets
Investment carries hidden risks, and as investment activities cross national borders beyond a state's territory, the degree of risk increases Both risk restriction and risk management are topics of keen interest and study for investors as well as for governments—whether domestic or foreign—seeking to protect assets and promote stable markets.
Investment is the act of sacrificing present resources—most commonly money or other assets—by committing them through legally compliant forms and channels in order to fund productive activities The investor expects a future return on investment, weighing risks and opportunities across different asset classes as the capital is deployed to generate profit.
Investment can be classified along several criteria Based on the management right over investment activities, there are two types: direct investment and indirect investment Based on the economic zone receiving capital, investments are categorized as private-zone investment and government-zone investment Based on the investment field, investments cover manufacturing, trade, services, and other sectors Based on capital resources, investments are divided into domestic investment and foreign (international) investment.
As per the classification mentioned above, Foreign Investment (International Investment) is a form of investment activities
From a country's point of view, investment from one state to another (and vice versa) is called foreign investment When considering the broader context of the global economy, these cross-border activities are referred to as international investment Understanding this distinction clarifies how capital flows between nations, shapes economic growth, and informs policy decisions in a connected world.
International investment is the cross-border movement of capital, where investors move funds or other value across a national frontier to carry out investment activities in another country This capital export occurs when natural persons or legal entities invest on foreign soil, introducing international factors into the host economy While it shares the general features of investing, international investment is distinct from domestic investment due to its cross-border nature In essence, it is the process of transferring capital from one state to another to pursue investment opportunities that yield profit or deliver socio-economic benefits.
1.1.2 An overview of international investment dispute
1.1.2.1 Conception of international investment dispute
Dispute is a legal concept that is understood and defined in several ways It denotes an existing situation between two or more parties that arises from signals of complaints or opposition, signaling a conflict over rights, duties, or interests Depending on the jurisdiction, disputes can involve civil, contractual, or administrative claims and are typically resolved through negotiation, mediation, or formal adjudication to establish the parties' rights and obligations.
Black's Law Dictionary defines a dispute as a contradiction or divergence between parties, arising when one side asserts a right or obligation and the other responds with an opposing claim or argument It captures the core dynamics of disagreement over required actions or entitlements, where a demand by one party prompts a counter-demand or justification from the other (Black's Law Dictionary, 1999, p.17).
According to Vietnamese Dictionary, dispute is understood that
"contradiction; doing or carrying out some opposite issues …; to cram the thing that it is ambiguous to define which party it belongs to” (2000)
In order to define to exist of dispute in Mavrommatis case, on its decision in
1924, Permanent Court of International Justice gave a definition of dispute:
“dispute” is a disagreement on the legal or reality, a conflict of legal opinion or benefit conflict between two or more people (David A Gantz 2004, p.10)
From the above definition, it is possible to understand that dispute is the disagreement, conflict on the basis of law or reality on benefit or obligation between subjects
An international investment dispute is a disagreement over the distribution of economic benefits among the parties involved in international investment, arising from the exercise of rights and obligations within international investment activities.
1.1.2.2 Classification of international investment disputes
Basing on subjects taking part in dispute, International investment dispute can be divided into dispute between investors, dispute between two states; dispute between a foreign investor and state receiving investment
The first kind: dispute between investors usually occur under two forms: dispute between a foreign investor or foreign owned business and capital-importing country; dispute between investors
Disputes between two states form the second type of international investment conflict These conflicts arise when two states disagree over violations, interpretations, or terms in bilateral or multilateral trade and investment agreements They occur when a state's economic benefits are harmed because of non-compliance with signed agreements, with the consequence often including retaliation and rising political tensions between the involved parties.
An overview of mechanism and measures to prevent international investment
1.2.1 Concept of investor-State dispute prevention
Prevention is an action to eliminate the cause of potential nonconformities or other potentially unwanted situations
Dispute prevention in ISD is the act of minimizing potential areas of dispute through extensive planning to reduce the number of conflicts that escalate or crystallize into formal disputes (UNCTAD, 2010: xiv) This view defines dispute prevention as lowering the incidence of conflicts that become formal disputes and rests on a crucial distinction widely acknowledged by conflict theorists and Dispute System Design (DSD) practitioners—the difference between 'conflict' and 'dispute.'
Based on the understanding of investment disputes set out in Section 1.1.2.1, preventing investment disputes means identifying and eliminating the root causes of disagreements and conflicts of economic interests among participants in international private investment When conflicts arise, stakeholders should take timely actions to prevent these tensions from developing into formal disputes.
Preventing investment disputes refers to proactive actions that identify and eliminate the causes and hidden risks that could trigger conflicts between investors and local governments, thereby reducing disputes and enhancing mutual benefits through planned, predetermined strategies.
According to the above definition, investment dispute prevention has the following characteristics:
- Is an activity that minimizes the number of conflicts that may arise into dispute
- Being proactive in planning and anticipated plans
1.2.2 Investor-States dispute prevention mechanisms
The concept of 'mechanism,' originally used in technical and physical sciences, is introduced into legal science with an adjusted understanding of its origin, as stated by Nguyen Nhu Y (2001) in the Vietnamese dictionary published by Culture and Information Publishing House The term Mechanism is the transliteration of the Western word Mécanisme, as noted in Le Petit Larousse.
Mechanism, as defined in 1999, describes how a set of factors depends on one another, highlighting the interdependencies within a system The Vietnamese Dictionary from the Institute of Linguistics (1997) defines mechanism as the way to follow a process of implementation, emphasizing the procedural steps required to execute a procedure Together, these definitions portray mechanism as both a network of interrelated factors and a structured sequence that guides the execution of a process.
Dispute prevention mechanisms are methods or modes of operation used by various legal entities to maintain order and discipline and to prevent disagreements among them They can be developed under domestic law or established by agreement between the involved parties, providing statutory or contract-based frameworks for conflict avoidance.
Investment dispute prevention mechanisms are the processes, measures, and modes of operation that foreign investors and the government of the host country coordinate and implement in an orderly, disciplined manner to prevent disputes between them.
Characteristics of ISD prevention mechanisms
In the investment-dispute prevention mechanism, the parties to the dispute are foreign investors, the State, and related agencies This framework identifies these stakeholders to facilitate preventive measures and early resolution of issues before disputes arise.
Secondly, about the content of the mechanism: Mechanism to prevent investment disputes includes measures, methods and procedures for preventing investment disputes
Third, the purpose of the investment dispute prevention mechanism is to prevent potential investment disputes from arising and to resolve those that do arise, ensuring that disputes do not have to be resolved through the judiciary.
Firstly, classification by mechanism source: ISD prevention mechanisms by contract and ISD prevention mechanisms by institutional
An investor-state dispute prevention mechanism implemented through contracts involves foreign investors and host governments negotiating investment agreements that go beyond the conventional rights and obligations in investment relations These contracts embed conflict management provisions to address potential disputes through negotiated resolution rather than litigation This contract-based approach is a popular form of investment agreement, designed to clarify expectations, reduce the risk of litigation, and preserve ongoing cooperation between investors and governments.
ISD prevention mechanism contracts may include pre-agreed conflict-management provisions that allow parties to consult directly to resolve issues arising during contract performance or to apply a problem-solving technique They may designate a third party to support conflict management, such as a dispute settlement process, mediation, fact-finding, or a neutral evaluation panel, whom the parties can agree on in advance before any specific conflicts arise.
ISD prevention mechanism contracts offer the advantage of letting parties tailor dispute-prevention measures to their specific needs within investor-state governance However, their main limitation is that these mechanisms only apply when the investor-State relationship is defined by a contract, meaning their reach is confined to contract-based relationships and may not cover broader interactions.
-Investor-State dispute prevention mechanism by institution: Institutional ISD prevention mechanisms can be defined as investor-State conflict management mechanisms institutionalized within the structure of the public administration of the host government Contrary to contractual ISD prevention mechanisms, institutional ISD prevention mechanisms would in principle apply horizontally to all investments, regardless of whether or not they are governed by an investment contract
Experimental data shows that about half of the cases brought to state-investor arbitration under IIA do not arise from measures adopted at the central or national level of the Government which are the extent to which IIAs are negotiated Instead, a significant number of disputes between investors and the state tend to arise regarding measures adopted by city or provincial governments or by state agencies in charge of specific sectors of the economy (Franck, 2008) Therefore, ISD prevention mechanism organizations may be particularly useful to address investment-related conflicts stemming from the application of inconsistent policies and measures of different governments - especially the inconsistency may entail the host country's liability under IIA
Across most countries, the effective development of dispute prevention organizations will likely depend on implementing a comprehensive program that regulates and modernizes parts of the public administration infrastructure, enabling investment stakeholders to identify and manage conflicts with the state at an early stage The most common model of dispute prevention organizations comprises core elements that establish structured governance, early conflict detection, and accessible mechanisms for dialogue between investors and public authorities.
MECHANISM AND MEASURES FOR PREVENTING
The situation of Investor - State disputes settlement in the world
2.1.1 The situation of Investor - State disputes settlement by the diplomatic protection method
As ISD solutions evolve, diplomatic protection on behalf of other state-owned investors has become less pronounced and is used less frequently This trend is reflected in bilateral and multilateral investment agreements that increasingly limit the scope of such protection Clause 1 of Article 27 of the ICSID Convention provides the framework for how these protections are applied, shaping the interaction between host states and state-owned investors within the investor-state dispute settlement system.
Under the Convention, no Contracting State may initiate international diplomatic or legal action about a dispute that its nationals or the nationals of other Contracting States have agreed to submit to arbitration under this Convention, unless the responsible State fails to comply with the arbitral award At the bilateral level, BITs establish a similar rule For example, the Vietnam–Australia BIT (1991), Item 3, Article 12, and the Vietnam–Chile BIT (1999), Article IX.16, reflect this arbitration-and-compliance framework.
An ISD resolution mechanism avoids direct political confrontation between states When investors face difficulties in claiming compensation awarded by international arbitral tribunals, they can rely on their government's action to press for relief In the Patuha Power Ltd v Republic of Indonesia case (UNCITRAL ruling, October 16, 1999), Indonesia did not compensate the arbitral award; later, Patuha received part of the compensation through political risk insurance issued by the U.S government agency Overseas Private Investment Corporation (OPIC) OPIC subsequently sought reimbursement from the Indonesian government through diplomatic channels and U.S pressure.
Diplomatic protection remains permissible and can play a meaningful role in cases where the host state fails to enforce an arbitration award against a foreign investor In the course of adjudicating disputes with foreign investors, governments may exercise their powers in ways that create obstacles and even threaten investors As a result, diplomatic protection helps defend the legitimate rights and interests of investors Developing countries in particular should adhere to their obligations under IIAs and comply with international arbitration awards to prevent political confrontation and protect bilateral relations.
2.1.2 The situation of Investor-State disputes settlement by the Courts’ mode
Addressing investment-state disputes (ISD) through the host country’s judiciary aligns with the Calvo doctrine, which holds that the jurisdiction to resolve ISD lies in the country where the investment takes place and that the receiving country’s courts should adjudicate such disputes; historically, some Latin American governments advocated domestic litigation for ISD and several regional agreements echo this approach by restricting favorable treatment for foreign investors and prioritizing dispute settlement in the host nation’s courts, as reflected in Articles 50 and 51 (amended in 1991) of Decision No 24 of the Cartagena Agreement (between Bolivia, Colombia, Ecuador and Peru); meanwhile, the United Nations Charter on Economic Rights and States’ Obligations (December 12, 1974) affirms states’ right to regulate and enforce jurisdiction over foreign investment within their territory in accordance with national laws and priorities, noting that internationalization measures are neither prohibited nor explicitly endorsed (UNCTAD, 2003, pp 27–28, 12).
Developing economies are increasingly integrating investment-related disputes into robust international dispute settlement mechanisms to support economic transformation Foreign investors strongly support this shift, contending that ISDS should be addressed through dispute settlement processes governed by international procedures and standards, with international arbitration typically serving as the mechanism.
(UNCTAD 2003, p.13) That is why developing countries have signed investment agreements with something that could resolve the dispute as a tool to attract foreign investment
William S Dodge (2006, p 30) argues that dispute resolution through national courts is suitable for both large-scale disputes and conflicts involving lower-level authorities and regulators In the NAFTA context, the Loewen decision suggests that it is illogical for a country to incur international-law obligations that arise from the actions of low-level judicial officers when there has been no appellate review in a national court.
Current signals show a shift back toward having ISD disputes resolved by domestic courts rather than through arbitration, driven by concerns that arbitral rulings may constrain national public policy autonomy For example, the 2004 US–Australia Free Trade Agreement did not include an investment dispute settlement provision, making it the only US bilateral FTA without this mechanism, and Australia has since urged similar rulemaking in other trade deals so that disputes in this area are handled domestically At the same time, the Australian government recommends that foreign investors carefully evaluate investing in countries that are not protected by international dispute settlement mechanisms (Emerson C 2011, p.14).
2.1.3 The situation of Investor-State disputes settlement by the Arbitration method
Arbitration is a common method for resolving investor-state disputes (ISD) and is frequently included in international investment agreements (IIAs) Compared with national courts, independent international arbitral tribunals are perceived by investors as more objective, fair, and transparent States attract investment and commit to a healthy investment climate that increasingly embraces international dispute resolution through arbitration This trend is evident in the spread of IIAs at bilateral and multilateral levels with arbitration provisions, including Vietnam–Argentina BIT, Vietnam–Australia BIT, BITs modeled on Canada, the US model BIT, and ASEAN agreements.
2009 Comprehensive Investment Agreement (Part B), North American Free Trade Agreement 1994- NAFTA (Chapter 11), Energy Charter Treaty (ECT) (Part 3 and Article 26), FTA United States - Chile 2003 (Chapter 10)
In fact, arbitration is also a commonly used method of resolving ISD The number of disputes brought to arbitration is increasing If in the years of 1990-
In 1995, investment arbitration was still uncommon, with only about 0–2 disputes brought to arbitration each year; from 2000 to 2010, the number rose by an average of 20–30 cases annually By the end of 2010, the total number of ISD arbitration cases stood at 390, including 25 cases in 2010 alone (UNCTAD 2012d, p 2).
Considering the status of ISD settlement by arbitration, there are some issues to note as follows:
Among 390 cases reviewed, 197 have been resolved Of these, 78 were decided in favor of the host state (about 40%), while 59 favored investor protections (about 30%) Some disputes have resulted in mutual settlements or in decisions that were not publicly disclosed While the investor-state dispute settlement mechanism enables foreign investors to sue the state, this does not mean the state is inherently at a disadvantage States can present arguments to safeguard their interests and prevail in disputes.
Second, regarding the parties to the dispute, the majority of investor-state arbitration disputes are filed by investors from developed countries By the end of 2010, 83 states faced investor-initiated arbitration complaints, including 51 developing countries.
17 developed countries and 15 countries with transfer economies (UNCTAD 2011, p.2) The fact that developing countries are regularly sued for international arbitration in disputes with foreign investors stems from a number of reasons
In many developing countries, an incomplete and evolving legal framework—with policies and regulations that frequently change—creates uncertainty that can undermine investor protections and erode confidence in the rule of law Domestic legal procedures are often complex and lack transparency, making it difficult for investors to navigate lawsuits and obtain timely redress When judicial institutions, especially the courts, fail to demonstrate true independence and fairness, they cannot reliably protect investor rights, undermining trust and deterring foreign investment.
Regarding the form of arbitration, arbitration regulations generally take precedence over individual arbitration cases, and arbitration organizations such as ICSID, the ICC arbitration mechanism, and the Stockholm Chamber of Commerce (SCC) play important roles in resolving investment-dispute cases (ISDs) Most parties adopt the UNCITRAL arbitration rules According to UNCTAD statistics, of 390 investment disputes reported by 2010, the ICSID mechanism accounted for 245 cases, UNCITRAL arbitration rules accounted for 109, SCC for 19, ICC for 6, and the remainder were resolved through other arbitration mechanisms.
ICSID is the most widely used arbitration mechanism for investor-state disputes (ISDS) and remains the only permanent forum specialized in resolving these disputes Established under the Washington Convention of 1965 on the settlement of disputes between states and nationals of other states, administered by the World Bank, ICSID has played a pivotal role in creating an effective ISDS settlement framework The convention now includes 157 member countries, with 147 having deposited instruments of accession, ratification, or approval By the end of 2010, ICSID had registered 245 ISDS disputes, of which 227 had reached final resolution, representing a 97% conclusion rate.
2010) This ratio shows that ICSID is another effective ISD resolution mechanism
2.1.4 The situation of Investor - State disputes settlement by the other methods
Mechanism and prevention measures in settling international investment
2.2.1 Mechanism and prevention measures in settling international investment disputes in Jordan
The Jordan Investment Commission (JIC) holds the role of the investment promotion agency in Jordan The functions of the Council (Investment Law No 30-
To prevent ISD disputes, the Council, with the support of the Joint Implementation Committee (JIC), must be clearly empowered and its attributions recognized to ensure effective institutional coordination Its core duties include submitting recommendations to the Cabinet on legislation drafts, national strategies and policies; overseeing and supervising the Commission’s work and following up on the implementation of annual plans; studying the obstacles facing economic activities; outlining remedial courses and directing the Commission toward appropriate mechanisms to address them.
Experience shows that preventing investment disputes requires a comprehensive, multi‑agency strategy that engages agencies across the state apparatus and all levels of government involved in issuing and implementing investment policies Effective prevention hinges on coordinated governance, clear policy frameworks, and timely policy execution to minimize disputes and protect investor confidence.
2.2.2 Mechanism and prevention measures in settling international investment disputes in Colombia
To address weaknesses in the prevention and management of investment dispute settlement (ISD), Colombia built a comprehensive legal and institutional framework aimed at averting potential litigation and efficiently handling disputes The framework pursues four objectives: strengthen the state’s capacity for dispute prevention and management; centralize ISD settlement decisions and ensure effective inter-institutional coordination; secure resources to defend the state; and establish administrative procedures and training programs A high-level commission directs the strategy for investment dispute prevention and management, with the Ministry of Trade acting as the Lead Agency coordinating government actions Concurrently, training programs are provided to sensitive officials at national and sub-national levels to align with Colombia’s international commitments The institutional pillar includes a High-Level Government Body composed of ministerial representatives with six functions: direct the national strategy for dispute prevention and management; promote the use of alternative dispute resolution; recommend measures to prevent and settle disputes; recommend measures to ensure timely and constant defense; hire external counsel; and focus on specific sectors and 38 entities To enable early detection of disputes, Colombia established the Investment Attraction Facilitation System, a public-private mechanism that identifies investors’ concerns and formulates solutions to improve the investment climate This system is managed by a technical committee tasked with coordinating and monitoring investment-climate reforms and includes the High Presidential Advisor for Public and Private Management, the Minister of Trade, the President of Pro Colombia (the investment promotion agency), and the President of the Private Council for Competitiveness (OECD 2018, p37).
In order to prevent ISD, Colombia takes these measures: Implementation of ISDS commitments: assessment to information, inter-institutional arrangements and authority to settle
Colombia has recently begun concluding international investment agreements (IIAs) and, in parallel, has negotiated bilateral free trade agreements with the United States and Canada, each including an investment chapter At nearly the same time, the Ministry of Commerce, with support from the United States Agency for International Development (USAID), launched a program to prepare for investor–state disputes by designating a lead agency and establishing other institutional arrangements to avoid disputes and strengthen preparedness A decree, not yet in force, would grant the lead agency the authority to collect and produce evidence from all relevant sources within the Colombian government.
The lead agency will constitute the core of Colombia’s institutional arrangements to implement its ISDS commitments and ensure the defense of the State in investor–State arbitration It will be involved in the handling of all issues related to the investor’s interaction with the State in the context of investment disputes, including the receipt of notifications about emerging disputes, the coordination of consultations between the investor, the specific agency involved in the dispute at hand and other relevant agencies, and the management of the arbitration proceedings themselves In other words, the lead agency will be the centralized authority to be approached for all matters related to investor–State disputes, and all information regarding such disputes is gathered within this agency
Such an approach drastically simplifies the authority structure among government agencies, thereby increasing overall transparency
Figure 2.1 illustrates the role of the lead agency in further detail, particularly in relation to the investor and the involved agency as the two other most relevant actors The involved agency is the government authority which is responsible for implementing the measure that triggered the dispute between the investor and the State The figure illustrates three different roles of the lead agency, firstly as a recipient of information about disputes, secondly as a coordinating body during the consultations process, and thirdly as a key agency involved in arbitration proceedings
Part I: knowing the investment related dispute – there must be a lead agency centralizing notifications and coordinating any response;
Part II: consultations investor-State - the lead agency must be in charge of coordinating the other governmental agencies involved in the dispute, and it also must be the front desk for contacts between the investor and the administration;
Part III: arbitration proceedings - even during arbitration, the above stated roles of the lead agency must be maintained and any non-judicial solution must be approved by the Committee
Colombia has begun implementing a cross-agency framework by identifying all regulatory authorities that may be involved in disputes and designating specific contact points within these agencies to manage investment-related issues, thereby improving inter-agency communication The lead agency is granted clear authority to collect and produce evidence from all relevant government sources, ensuring a centralized and efficient process.
Guatemala is advancing new institutional approaches to investment dispute resolution, highlighted by ad hoc Decree No 128-2009, issued on May 5, 2009 The decree establishes a temporary institutional mechanism to manage two pending investment disputes by creating an inter-institutional Commission, with the Ministry of Economy designated as the coordinating agency.
Figure 2.1 - Getting prepared: the institutional system of Colombia
(Source: UNCTAD (2010), Investor-State Disputes: Prevention and Alternatives to
Experience shows that establishing a focal agency requires a competent entity backed by a solid legal basis, with the mandate formalized in a legal document issued at the highest level of government to ensure legitimacy, authority, and clear jurisdiction.
2.2.3 Mechanism and prevention measures in settling international investment disputes in Korea
Many host countries address investor concerns by establishing ombuds offices or appointing ombudspersons as a one-stop channel for complaints For investors, an ombuds office provides an institutional interlocutor and an official route to raise issues at an early stage, with options ranging from informal engagement to formal requests for resolution It can be voluntary or mandatory, and its design may emphasize either strict procedures or flexible practice In any case, the ombuds office offers a quick, cost-effective, and amicable path to resolve investment-related problems with the host government.
South Korea's Office of the Foreign Investment Ombudsman, created within the Korea Trade-Investment Promotion Agency (KOTRA), helps improve the investment climate and promote the success of foreign-invested companies by resolving difficulties in business activities and day-to-day management From 1999 to 2015, the Office resolved 4,976 grievance cases (an average of 311 per year) and contributed to system improvements in 360 cases It comprises specialists in labor, law, taxation, and finance who investigate and resolve grievances for foreign investors, and it maintains an open online channel for comments or suggestions on laws or procedures that may be inadequate (OECD 2018, p.38).
Established in October 1999, following the Foreign Investment Promotion Act enacted a year earlier, the Office of the Foreign Investment Ombudsman (OFIO) operates as a non-profit organization hosted by KOTRA while remaining independent of it and directly accountable to the Prime Minister Its core mission is to support foreign investors facing challenges in the Republic of Korea by tracking issues, delivering timely solutions, and continually working to improve the overall investment climate in the country (Figure 2.2).
OFIO's investment aftercare team, which includes the so‑called "home doctors"—experts across Korea's diverse industrial sectors—provides personalized support to foreign investors in the Republic of Korea who face grievances of any kind An investment service team within the OFIO also works to ensure a generally favorable investment environment for foreign investors by addressing, on a personal level, the daily concerns of foreign managers and other individuals.
The mandate of the OFIO is enshrined in Republic of Korea law, which requires all relevant agencies within the Republic of Korea Government to cooperate promptly with the OFIO, as specified in Article 21-3, Paragraph 3 of the Enforcement Decrees of the Foreign Investment Promotion Act.