As noted in this chapter, the taking of private property is a controversial issue in international business law. Recent examples include Thailand and Venezuela. In January 2007, the Thai government approved a new investment law barring foreign ownership of more than 50 percent in telecommunications companies and other sectors vital to national security. Companies violating the law were required to find a Thai partner and sell off their interests to get under the cap or surrender voting rights by 2009. Also in January 2007, Venezuelan president Hugo Chavez announced plans to nationalize all businesses in telecommunications and electricity and control four multibillion-dollar oil projects in the Orinoco River Basin. Impacted investors included Verizon Communications, ExxonMobil, Chevron, BP, and ConocoPhillips. This nationalization decree was expanded in May 2008 to include steel, cement, sugar plantations, dairy products, and cattle. 

The taking of private property is also a controversial topic in the United States. Eminent domain (also referred to as condemnation) is the government’s power to take private property for public purposes. In the United States, eminent domain implicates constitutional considerations. Specifically, the Fifth Amendment to the U.S. Constitution prohibits the taking of private property by the federal government without just compensation. The Fourteenth Amendment prohibits states from taking private property without due process. Private property rights are also protected in state constitutions. 

In the United States, in addition to just compensation, the taking of private property must be accompanied by a public purpose. However, courts generally will only require that government statements of public purpose be minimally rational and will not give them close scrutiny. Examples of public use include slum clearance, environmental protection, historic preservation, public safety, shortages of residential property, economic revitalization, job creation, and increases in tax revenues associated with commercial development. The last two examples were relied upon by the U.S. Supreme Court in its controversial 2005 decision in Kelo v. City of New London, in which the Court upheld the condemnation of a 90-acre residential neighborhood in New London, Connecticut, for transformation into commercial development, including office buildings, upscale housing, a marina, and enhancement of a research facility operated by Pfizer, Inc. Property owners can only defeat such initiatives if the state constitution or state law prohibits condemnation under such circumstances. Despite legal concerns arising from these takings, are such takings nevertheless defensible from an ethical standpoint? For example, are these takings defensible on at least an individual basis utilizing moral relativism, which focuses on determining right behavior based on the time and place of circumstances? Should courts and arbitral bodies secondguess determinations by national and state sovereigns that the taking of private property is appropriate at a given time and under the circumstances? If they so frustrate the will of democratically elected bodies, what is the moral basis for doing so? Are takings of private property consistent with utilitarianism? In the international arena, private property takings are often portrayed as decentralizing economic concentration or preventing exploitation by large businesses for the benefit of the general public? Is this true? Or is the expropriation being effected to place a large, moneymaking asset in the hands of the people who run the government? A similar argument may be advanced with respect to takings in the United States, specifically, that deprivation of individual property rights serves the best interests of the public at-large through economic development, environmental protection, historic preservation, job creation, and enhancement of tax revenues. However, under both circumstances, individual well being is sacrificed for the perceived benefit of the community. Does this undermine the defense of takings through utilitarianism? 

Utilizing a deontological framework, do takings violate fundamental rights to private property recognized by the natural school of law and enshrined in national and international instruments such as the U.S. Declaration of Independence, the U.S. Constitution, and the Universal Declaration of Human Rights? Are such takings indefensible pursuant to the categorical imperative as no one would wish for the disregard of private property rights to become a universal standard of conduct? Do such takings treat private property as a means to achieve a perceived benefit to the community without sufficient regard for those individuals who are negatively impacted? Finally, are such takings fair and equitable pursuant to contractarianism, especially to the extent that they disproportionately impact the poor and politically disenfranchised groups? On the other hand, are the inequalities resulting from such takings defensible if they generate benefits for society as a whole?