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Hastings International and Comparative Law Review

Abstract

The Overseas Private Investment Corporation (OPIC) was created in 1969 to encourage private American investment in developing countries. OPIC finances overseas projects and provides insurance against loss due to political risks. In 1985 because of concerns that OPIC-assisted projects in countries with low labor costs were resulting in the loss of domestic jobs, Congress passed a law requiring OPIC to withhold assistance from projects in countries which fail to adopt and implement internationally recognized workers' rights. This Article argues that this legislation is counterproductive. Developing countries are deprived of role models, since most OPIC projects adhere to higher labor standards than required by the host country. The loss of OPIC assistance has hurt American businesses by forcing them to abandon their overseas projects. This vacuum has been filled by investors from other countries. This article proposes that an exception to the 1985 law be made for projects which voluntarily adhere to OPIC workers' rights requirements.

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