Baek Byung-yeul is a journalist at The Korea Times focused on cultural content, including films and cultural events in South Korea. You can contact him at baekby@koreatimes.co.kr to share your insights.
KOTRA, Ministry of Justice join forces to prevent international investment disputes
KOTRA's Foreign Investment Ombudsman Kim Sung-jin, right, poses with Justice Minister Park Beom-kye after signing a memorandum of understanding to cooperate on preventing investor-state disputes at the former's headquarters in southern Seoul, Friday. Courtesy of KOTRA
By Baek Byung-yeul
By Baek Byung-yeul
Korea Trade-Investment Promotion Agency (KOTRA) has forged a partnership with the Ministry of Justice to deal with potential investor-state disputes, the state-run trade promotion agency said Friday.
The legal process Investor-State Dispute Settlement (ISDS) lets investors sue countries for discriminatory practices. Currently, Korea has faced eight ISDS cases. Three of them were settled, while the remaining cases are ongoing.
To help foreign investors and companies prevent possible disputes, the two organizations signed a memorandum of understanding at KOTRA's headquarters in southern Seoul. Under the agreement, KOTRA said its foreign investment ombudsman officials will cooperate with the justice ministry to support foreign firms doing business here.
KOTRA said the essential points of the agreement aimed at preventing international investment disputes are: the sharing of information between the two organizations; jointly working to enhance the investment environment; co-hosting meetings for foreign-invested companies; and personnel exchanges between the two institutions. Detailed implementation measures will be announced later through working level cooperation, KOTRA added.
The signing ceremony also featured representatives of the chambers of commerce in Korea from countries such as the United States, Japan, China, Germany, France and the U.K., while overseas-based companies such as HP Printing Korea and Solvay Korea took part in the signing ceremony, showing their interest in Korea's foreign investment policies.
Justice Minister Park Beom-kye said KOTRA and the ministry will closely cooperate to help foreign-invested companies avoid possible disputes.
“The foreign investment ombudsman has played a pivotal role in preventing possible investor-state dispute cases,” the Justice Minister said. “The two organizations will work together to find a solution to the problems faced by foreign-invested companies.”
In return, Kim Sung-jin, KOTRA's foreign investment ombudsman, emphasized that the most important thing was for conflicts between Korea and foreign-invested companies to be resolved smoothly before the case develops into an international investment dispute.”
“We will do our best to minimize disputes by cooperating organically,” Kim further noted.
Korea has faced growing calls to respond effectively to investor-state disputes due to its inefficient reaction to ISDS cases, which are under way against the government. One of the most famous ISDS case against Korea is the nine-year-long litigation with U.S. private equity firm Lone Star.
Lone Star filed a request with the International Center for the Settlement of Investment Disputes (ICSID) in 2012, claiming the Korean government should compensate it for the "belated" approval of the sale of its stake in Korea Exchange Bank to Hana Financial Group and return the taxes it paid during the delay.
To effectively respond to international investment disputes, the Ministry of Justice launched a team in August, 2020 composed of 14 lawyers dedicated to settling investor-state disputes.