Investment was still not ripe for a

Investment was still not ripe for a binding code on forei gn inves tment and brought out a set of guidelines instead, the OECD , just a few years later, embarked upon the framing of a binding Multilateral Agreemen on Investment (MAI). 1992 was also the year in whi ch the UN effort to draft a code of conduct for multinational corporations was shelved. 17 The picture was to change again. The MAI soon became the focus of protests. They were generated largely by human rights and environmental groups which claimed that the instrument focused entirely on the protection of multinational corporations without addressing the fact that they were also responsible for much of the human rights abuses and environmental degradation that takes place around the world. Around that time, there was also growing disenchantment with globalisation, which had been trumpeted as a force that integrated the world and ensured human progress.18 Suddenly, there was discontent with the process. It was seen as driving a wedge between the rich and the poor not only on a global scale but also within the developed states themselves. As one commentator put it, the process of globalisation had so divided society on an economic basis that the Third World had moved into the
First World .19 The battles that ensued on the streets of Western capitals whenever the economic organisations connected with neo-liberalism met signalled the growing opposition to the idea of bringing about regimes on foreign investment that gave protection to multinational corporations without controlling their faults. The protesters had organised themselves so effectively that they were able to exert sufficient pressure on their governments to pull out of the negotiations of the MAI.
But, the issue of investments then moved into the WTO. It was tasked with the formulation of an instrument on investment which would then be fitted into the existing structure of the WTO with its dispute-settlement mechanism. The assurance to the developing world and to the discontented was that the issue of investment would be considered in the context of economic development. The text of the Doha Ministerial Meeting of the WTO assures that this would be done in formulating an instrument. Though work on the process of considering an instrument had begun, some states had already come out strongly against the making of such an instrument. Finally, a coalition of developing states drafted an instrument on investments, very reminiscent of the UNCTC Code, which linked the protection of foreign investment and the liability of multinational corporations for environmental, human rights and other misconduct. With that, the developed states thought it prudent to discontinue the efforts at pursuing a multilateral instrument on investment through the WTO. Some would see in this episode a return to Third World cohesion in matters of investment. The coalition was led by China, India and Brazil, three emerging industrialising powers. But, the question whether it was the return to Third World cohesion or a practical means of avoiding the imposition offirm norms that would reduce regulatory control at a time when developing states were industrialising should be considered more carefully.