The year is 2022 and the economy of Santa Barbara, a small island in the Caribbean, is only now recovering from the devastating effects of the Covid-19 Pandemic which brought the world economy to a standstill for almost two years. The pandemic had a debilitating effect on the economy of Santa Barbara and its government is eager to get the island's economy back on track by attracting as much foreign capital as possible. As such, the Government of Santa Barbara is in the process of developing foreign investment legislation, using the Trinidad and Tobago Foreign Investment Act 1990 as a model, to regulate the activities of foreign investors in Santa Barbara, thereby limiting the ability of investors to capitalise on its current state of economic vulnerability.

Michael Genstein , a citizen of the United States, had been eyeing Santa Barbara as a potential destination for his latest hotel property since before the pandemic. His investment advisors believe that the time is perfect for starting negotiations with the government having heard of Santa Barbara's economic woes and believing that the government will be more accommodating to it various requests, including a 50-year tax holiday, whereby the hotel would be exempt from all taxes including income tax, value added tax, property tax accommodation tax etc. In return for allowing him to invest in Santa Barbara Michael Genstein promises that 70% of his staff will be locals.

Address the issues below :

Why having an attractive investment environment is essential to its economy?-

Why is it important for host-States' ability to regulate foreign investors remains unfettered?-

Why it is critical for host-states to clearly define the terms 'investor' and 'investment'?-

Apart from defining 'investments' and 'investor' What are 4 essential provisions that its national law should contain to ensure that its sovereign right to regulate is protected?-

Conduct a comparative analysis of provisions of the foreign investment legislation in Trinidad and Tobago (which Santa Barbara has chosen to emulate) with that of South Africa, New Zealand and Canada to determine whether there are any provisions in these statutes that the Government of Santa Barbara can use to supplement the Trinidad and Tobago legislation.-

What are some of the pitfalls that the government of Santa Barbara should try its best to avoid in negotiating investment agreements with foreigners?-

What kinds of performance requirements (if any) can the government of Santa Barbara include in its legislation?-

What should the Government wish to couch its legislation to make the threshold as high as the international minimum standard in an effort to avoid claims based on its breach of its FET obligations in its regulation of foreign investors?