In their international activities multinational corporations (MNCs) face various risks. Political risk is one of them. Expropriations, transfer and convertibility restrictions, breach of contracts, acts of terrorism, domestic political violence or other adverse regulatory changes and/or negative government action represent forms of political risks. Incorporating political risk in their risk management strategies becomes a necessity for MNCs in their search for profits and new markets. This article presents how MNCs use lobbying and advocacy as means to engage with governments and politicians in the country of origin (home country), in the country where a MNC has operations (host country) or at international level (by creating ties with international organisations) in order to mitigate political risks. The case of Repsol and its investment in Argentina is used to demonstrate the application of such tools. The article presents two limitations that might determine the success or failure of MNCs’ lobbying and advocacy activities: governments' unpredictable views towards MNCs and reputational risks. The article has also identified a main difficulty in identifying and examining MNCs way of using lobbying and advocacy to engage with government officials and politicians. This difficulty comes from the informal character of such contacts which makes lobbying and advocacy almost impossible to identify.

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Bilateral Investment Treaties (BITs), and in particular the possibility that they offer international arbitration of disputes between the foreign investor and the host country, represent one of the methods that multinational corporations (MNCs) can use as part of their risk management strategy to mitigate political risks.This article aims to present the constraints identified in using the arbitration procedures of the International Centre for Settlement of Investment Disputes (ICSID): Member States' ignoring arbitration decisions, ICSID's lengthy procedures, calculation of the amount for compensation and the general critics on ICSID arbitration. The article also analyses the effectiveness of BITs compared to the use of other methods to mitigate political risks. The case of Repsol and its expropriation in Argentina is used to demonstrate the presence of those constraints.The article concludes that MNCs' use of BITs to mitigate political risks in order to protect their foreign investments should be left till last after all other methods have been exhausted.