Panorama of legal security in Colombia: an unpostponable challenge

Much is said about legal certainty. The need for legal certainty in the exercise of rights and the fulfillment of obligations of companies and citizens is inherent to a Rule of Law, as the Political Constitution rightly points out. For the hydrocarbons sector, it is of the very essence of the transactions that take place in it.

These are long-term investments, in which the risk of success is limited by technical aspects inherent to the industry; what cannot happen is that the fundamental structure, based on which such investments are initiated, later becomes unknown or harmed without accountability.

[prefix_blockquote align=»right»]Recent cases should be subject to careful, rigorous, and dispassionate legal review, under penalty of becoming negative examples for a State that seeks to strengthen its position as an advanced and developed actor in the international context.[/prefix_blockquote]The foundation of legal certainty is that the ignorance of pre-existing rights must necessarily result in compensation for the affected party. Recent cases should be subject to careful, rigorous, and dispassionate legal review, under penalty of becoming negative examples for a State that seeks to strengthen its position as an advanced and developed actor in the international context. Curiously, the theme of issues that have been impacting the notion of ‘acquired rights’ limits, in itself, the viability of strongly opposing the respective ignorances. No one doubts the importance of issues such as environmental matters, prior consultation, royalties, fiscal control, and matters such as jurisprudential variations, but abrupt and subjective changes in these fronts can be harmful to already granted rights. We cannot find ourselves in situations where there are no specific norms as the pillar of contractual relationships and the risk extends beyond the geological to the legal. This does not mean, in any way, that a State is limited or prevented from imposing new conditions or obligations regarding activities carried out in its territory; what it does impose is a corresponding duty to respond for the damages that such decisions generate. The importance of legal certainty cannot be understood otherwise.

Those who invest have a valid, legitimate, and certain expectation that the rights defined for them and the obligations imposed on them will continue to be the basis of their legal relationship during the years in which they will carry out the proposed activity. When any entity of the State intends to modify such consolidated legal situations without this translating into the need to respond to the good faith investor, it breaks the established legal order. A project in the hydrocarbons sector that begins validated by an exploration and production contract, in which the land use planning foresees the possibility of developing the activity, the environmental legal categories also allow the proposed activity to be carried out, the environmental license has been granted as well as the consulted and socialized communities, in addition to significant investments made, cannot be adversely affected ex post facto by decisions that seek to completely and openly disregard those rights. Such disregard, even less, can be structured for subjective reasons without clear and objectively validated motivations.

[prefix_blockquote align=»right»]No one doubts the importance of issues such as environmental matters, prior consultation, royalties, fiscal control, and matters such as jurisprudential variations, but abrupt and subjective changes in these fronts can be harmful to already granted rights.[/prefix_blockquote]The disregard of such rights generates negative economic consequences for the State, and hence the reasons why such exceptional situations arise must be verified with the utmost care possible. If such a verification and confirmation process has not taken place, the damages should not only be the responsibility of the State but also of those who, as public officials, irresponsibly transgressed the legal order. Therefore, the Central Government has made significant efforts to urge entities, agencies, and State bodies to understand the effects of those decisions. Every investor whose legal certainty is compromised has the right to claim for the corresponding damages, not only at the internal level before Colombian courts and judges but also in equally complex situations, before arbitration tribunals arising from investment protection treaties.

The same rights must be asserted for Colombians investing abroad. In this context, it is worth mentioning that expropriation events are not the most evident; rather, those in which unfair and inequitable treatment is presented towards the investor. The Colombian State must guarantee and vehemently pronounce itself regarding the protection of rights as an essential basis of the legal protection that must prevail in a Rule of Law. For projects on which a large part of the State's income depends, we must be serious. There will be no new required investments in this sector without absolute clarity and transparency in the rules. Similarly, ongoing investments may be lost.
The task is not a small one, and the voices of the State must resonate hard and clear in the sense of reaffirming that companies and citizens can trust that their rights will always be respected. Likewise, it must be clear that in those scenarios where the legal goods protected and simultaneously exposed show, substantially but exceptionally, that ‘change’ must prevail, the investor will be compensated in the event that they must cede their position to a public good of greater significance. It is here where judges, guarantors of institutional integrity, have a particular and unavoidable responsibility. We cannot reach the absurdity that there are no ‘acquired rights’ in a Rule of Law.