This article addresses a currently very controversial issue—the question of environmental regulation of foreign investment and the limits on such national regulation by international law, in particular by recently completed and negotiated multilateral investment Treaties (MITs). It contributes to the emerging discussion on how and where to draw the line between legitimate non-compensable national regulation aimed at protecting the environment, or ‘human, animal or plant life or health’1 on one hand, and regulation which is ‘tantamount’ to expropriation requiring compensation, on the other. It is a question that is largely responsible for the 1998 collapse of the negotiations for a Multilateral Agreement on Investment (MAI) within the OECD.2 This experience is currently the main obstacle for negotiating multilateral investment agreements—and it has already become a problem for the proper implementation of the already existing ones—in particular the novel and far-reaching investor-state arbitration under Chapter XI of NAFTA and Art. 26 of the Energy Charter Treaty.3

and investment advisory services to developing countries. James Gunderson's experience over the past twelve years in US and European-based law firms and companies of the Schlumberger group includes negotiating investment arrangements and transplanting modern economic legislation. Helpful comments by William McBryde, Ian Willock, Gavin Little and Charlotte Brown lie (Dundee Law), Michael Hager (IDLI, Rome), Dolf Weber and Albrecht Stockmayer (Frankfurt) are gratefully acknowledged. A conference on technical assistance for legislation in the Community of Independent Slates organised in 1992 in Moscow by EBRD and the Academy of National Economy of Russia (International Centre for Legislative Expertise) provided the starting point for the discussion contained in this article. 1. See Alan Nome, "Locating the Socialist Rechtsstaat: Undcrdcvelopment and Criminal Justice in the Soviet Union" (1990) 18 Int. J. Sociology of Law 343-359 with references to the early Soviet jurist E. Paschukanis; F. Feldbrugge, "What Happened in Soviet Criminal Law?" (1985) Rev. Socialist Law 5-11. Lenin's The Slate and Revolution (August 1917) presents his views in detail: "From the moment all members of society, or even the overwhelming majority, have learned to administer the state themselves, have taken this business into their own hands... from this moment the need for government begins to disappear. ... "For when all have learned the art of administration, and will indeed independently administer social production, will independently keep accounts ... the escape from this national accounting and control will inevitably become so increasingly difficult... that very soon the necessity of observing the simple, fundamental rules of human intercourse will become a habit. V. 1. Lenin, The State and Revolution (2nd ed., 1918) translated in his Selected Works Volume VII, 1943 at pp.93-94. 2. Resolution of the Independent States adopted at the conference, "Channelling Legal Expertise for the Independent States: Cooperation in the Field of Economic Law", organised by the EBRD and the International Centre for Legislative Expertise, held in Moscow 9-11 Feb. 1992 and reported in its Final Report. 3. Comment ofV. Ivanov, Director of the Institute of Economic Policy (Moscow) at the opening of ibid; on the chaotically emerging legal culture in the former USSR see Doran Doch,..., in T. Waclde and G. N'di, International Oil & Cos Policies (1993). APRIL 1994] Legislative Reform in Transition Economies 349 •ties 4 and scant regard to establishing and protecting contractual and property rights. While representatives of providers of legal assistance have recognised the need to tailor technical assistance to the social, political and economic realities of the recipients, 5 fundamental questions remain unanswered. Can new legislation be a leading force of fundamental change? How much and what type would be most appropriate and how best can it be developed? Can it be directly imported from any of the models presented by modern market economies, or are the forme...

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The author reviews the recent literature on mineral contracts focusing on Smith and Wells' Negotiating Third World Mineral Agreements. He uses the outline of that book to offer a critique of some aspects of the negotiation process and of the position of the negotiating parties, with particular emphasis on most recent forms of agreement.