A recent review of the FDI policies of 11 countries found that most of them impose some sort of limitations or review requirements on foreign investment related to energy infrastructure (United States, GAO, 2008: 19; see also box I.2).
In the United States, the Foreign Investment and National Security
Act of 2007 explicitly requires the Committee on
Foreign Investment in the United States to investigate
any transactions involving an acquiring company
that is controlled by a foreign government or that
concern critical infrastructure (Ibid.: 32–33).
China includes power generation, power distribution and
telecommunications among industries deemed critical
to the national economy, and the Russian Federation
includes natural monopolies and telecommunications
in its definition of "strategic sectors". Several
countries, especially in Latin America and the
Caribbean, have also adopted or are considering
policies aimed at re nationalizing infrastructure (box V.3).
To conclude, many countries are today open to
TNC involvement in infrastructure. However, there
are significant variations by industry, and recent years
have also witnessed growing concerns with respect
to foreign control of certain infrastructure segments.
The highest degree of openness has been observed
in mobile telephony, while water services remain the
least open to TNC participation.
Openness is generally higher in industries that are easier to unbundle and
expose to competition, and in more developed
economies. Large-scale projects and those requiring
high levels of technological know how similarly
tend to be more open.
These findings are supported
by preliminary results from an UNCTAD survey of
openness in selected infrastructure industries (box
V.4). However, many governments are showing
greater interest in restricting inward FDI in selected
infrastructure industries due to strategic and national
security concerns.
Box V.3. Recent re-nationalizations in infrastructure
The Government of Argentina, in 2006 rescinded its contract with Aguas Argentinas, which was responsible for
providing water services to the greater Buenos Aires metropolitan area. This provoked a dispute with Suez Lyonnaise
des Eaux and Veolia Environnement (both French), both of which held shares in the company. Earlier, in mid-2004,
Argentina had re nationalized the San Martin railroad, previously in the hands of Argentine company Metropolitano.a
The Bolivarian Republic of Venezuela in 2007 nationalized the electricity company, Electricidad de Caracas, as
well as the main telecoms company, CANTV, and its mobile unit, Movilnet.
In the Dominican Republic, in 2003 the Government decided to re-purchase the shares of the private company Union Fenosa in the privatized electricity
distribution companies EdeNorte and EdeSur (WIR04). In Bolivia, President Morales on 1 May 2008 announced that
the country's largest phone company, ENTEL, would be bought from its current owner, Telecom Italia (EIU, Business
Latin America, 12 May 2008). In the Russian Federation, a dispute is pending concerning the re nationalization of
Moscow's Domodedovo airport.b A number of re nationalizations of infrastructure have also been announced in
developed countries, including in Estonia and Slovakia (chapter II).
Source: UNCTAD.
See www·thefreelibrary·com/argentina:+ government + rescinds+contract + with + aguas + argentinas, ...a0144164403.
b On 20 March 2008, the 10th arbitration appeals court upheld a lower court ruling in January 2008 to return a large amount of the airport's
property to federal ownership, including parts of the terminal. The Government has argued that the airport was illegally privatized in 1997
(see: www·themoscowtimes·com/article/1010/42/361633·htm).