{"id":1872,"date":"2022-08-29T07:55:45","date_gmt":"2022-08-29T07:55:45","guid":{"rendered":"https:\/\/ibrahimshihata.com\/?page_id=1872"},"modified":"2022-08-29T07:58:07","modified_gmt":"2022-08-29T07:58:07","slug":"professional-life","status":"publish","type":"page","link":"https:\/\/ibrahimshihata.com\/index.php\/professional-life\/","title":{"rendered":"PROFESSIONAL LIFE"},"content":{"rendered":"

\"\"<\/p>\n

Mr. Shihata became the General Counsel for the World Bank and Secretary-General of the International Centre for Settlement of Investment Disputes (ICSID) in 1983, an eventful era for the World Bank and the world at large.<\/p>\n

The 1980s marked the early days of the global debt crisis, and the Multilateral Investment Guarantee Agency (MIGA) did not yet exist. At that time, environmental concerns still did not receive adequate attention, and the subject of governance was not yet integral to international discourse on development. Mr. Shihata\u2019s pioneering thoughts and visions in these topics helped shape the organization\u2019s course of action and the path forward for the World Bank.<\/p>\n

As General Counsel, he authored more legal opinions than ever before.\u00a0With his broad knowledge of history, Mr. Shihata\u2019s legal opinions enabled the World Bank to respond to the rapidly-changing needs of its membership.\u00a0 Thanks to the framework laid out in those opinions, the World Bank became actively involved in legal and judicial reform issues.<\/p>\n

Creating the Multilateral Investment Guarantee Agency<\/strong><\/h1>\n

One of Mr. Shihata\u2019s major contributions to international development was the creation of the Multilateral Investment Guarantee Agency (MIGA). During his first week at the World Bank, the Managing Committee\u2019s meeting agenda included a discussion on putting an end to the initiative that would become MIGA, given the little support it received from the Board. Developed countries were opposed to the proposal as they had their own agencies to guarantee and insure private investors, while developing countries perceived it as another international organization standing with foreign investors against them. Mr. Shihata sought to undertake this initiative as he had been involved in the creation of the first agency of this type, the Inter Arab Investment Guarantee Corporation, in 1974.<\/p>\n

<\/p>\n

At the time, foreign investment was concentrated in only a number of countries and its volume was in historical decline. An agency supported by the World Bank and receiving the full confidence of both capital exporting and importing countries could, in Mr. Shihata\u2019s view, reverse that trend to the benefit of both sides.\u00a0In his view, MIGA\u00a0could play a significant role by rebuilding confidence among investors in developing countries by breaking the psychological barrier that magnified political risks.<\/p>\n

Two years after Mr. Shihata\u2019s initial Managing Committee meeting, the Board of Governors unanimously approved the Convention establishing MIGA. The Convention entered into force on April 12, 1988.<\/p>\n

In his book\u00a0MIGA and Foreign Investment<\/em><\/a>,\u00a0<\/em>Mr. Shihata shared his efforts to create MIGA and his vision for its future. The publication has been a valuable resource for experts in foreign investment, and a source of legal interpretation for matters concerning MIGA.<\/p>\n

Guidelines for the Legal Treatment of Foreign Direct Investment\u00a0<\/strong><\/h1>\n

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Mr. Shihata played a major role in preparing the Bank\u2019s Guidelines for the Legal Treatment of Foreign Direct Investment.\u00a0 At the urging of the Development Committee, a Committee of the General Counsels of the World Bank, the International Finance Corporation and MIGA was established to prepare the guidelines. The Committee was chaired by Mr. Shihata, where he took lead in drafting the guidelines which were later issued in 1992 with the support of the Development Committee.\u00a0 These guidelines were decisive in the preparation of investment laws and treaties and were often cited in the awards in investment arbitration.<\/p>\n

Creating of the Global Environmental Facility (GEF)\u00a0<\/strong><\/p>\n

The idea for a Global Environment Facility was first proposed in a 1989 meeting of the Development Committee. A great majority of the work on the establishment and reconstitution of the GEF was accomplished by the World Bank Legal Vice Presidency, and more specifically by Mr. Shihata. The GEF was established in 1991 as a pilot program within the World Bank, and many observers saw it as the beginning of an important shift in multilateral policy toward incorporating environmental concerns into development assistance.<\/p>\n

Creating the Inspection Panel<\/strong><\/h1>\n

During Mr. Shihata\u2019s tenure, there was pressure both within the World Bank and from Washington-based NGOs to establish an independent mechanism of inspection for the preparation, implementation and approval stages of World Bank projects. In the eyes of NGOs, it was important for the panel to be independent, whereby it would issue decisions binding on the World Bank, and with the institution\u2019s role limited to financing the panel. World Bank management, on the other hand, sought a mechanism that would remain internal and respond to senior management. Mr. Shihata developed a proposal that could balance the NGOs\u2019 position with that of the World Bank, in creating a unit independent from management yet not too detached from the World Bank. In 1993, the Board approved the final draft resolution, written by Mr. Shihata, establishing an independent Inspection Panel. According to the resolution, the Panel was set to investigate the World Bank\u2019s compliance with its own policies and procedures. This was the first of such initiatives for an international organization.<\/p>\n

His first book on the subject\u00a0The World Bank Inspection Panel<\/em><\/a>, published in 1994 shortly after the resolution establishing the panel was adopted, recorded the developments and deliberations that led to the creation of the panel. It analyzed its origin, functions, and objectives. In the year 2000, Mr. Shihata published\u00a0The World Bank Inspection Panel in Practice<\/em><\/a>\u00a0where he shared how the resolution has been applied in relation to increased demand for transparency and accountability.<\/p>\n

Secretary-General of International Centre for Settlement of Investment Disputes (ICSID)<\/strong><\/h1>\n

<\/h1>\n

In his role as Secretary-General of ICSID from 1983-2000, Mr. Shihata oversaw a 60% growth in membership, with 132 countries along with an extensive increase in the Centre\u2019s caseload. Mr. Shihata also helped strengthen ICSID\u2019s research and publications activities, notably by founding the\u00a0ICSID Review<\/em>\u2013Foreign Investment Law Journal<\/em><\/a>.<\/p>\n

Mr. Shihata reviewed the rules of ICSID and provided amendments to these, which were approved in 1984. He also brought the meetings of the Administrative Council from behind closed doors to the front stage during World Bank-International Monetary Fund Annual Meetings. This brought more visibility to ICSID and helped it become better known and seen as an institution of the larger World Bank Group.<\/p>\n

Law and Development\u00a0<\/strong><\/h1>\n

In 1969, when Mr. Shihata was a legal advisor to the Kuwait Fund for Arab Economic Development, he published a seminal paper entitled \u201cRole of Law in Economic Development: The Legal Problems of International Public Ventures.\u201d Among others, he observed in the article that economic development creates \u201ca great challenge for the legal profession, a challenge which is yet to be fully answered.\u201d Addressing the issue of \u201cwhy law in development?\u201d rather than capacity building\u00a0per se<\/em>, Mr. Shihata concluded that law is not a negative tool which merely reflects society in a given stage, but rather a dynamic mechanism that can positively respond to and influence society\u2019s growing needs for organization and development. Mr. Shihata\u2019s proactive approach to using law as an instrument of change ultimately enhanced the role of law in the policy making and the overall framework of the World Bank.<\/p>\n

Due to his prolific writings on the subject of law and development and the role of lawyers in the development process, the co-initiators of the International Development Law Institute (IDLI), later International Development Law Organization (IDLO), approached Mr. Shihata in 1981 during the time he was the Director-General of the OPEC Fund in Vienna. The Institute was eventually established in 1983 as a non-governmental organization. Mr. Shihata was an informal advisor to the organizers, helping assemble a distinguished Board of Directors. Later, during the first meeting of the Board of IDLI, Mr. Shihata served as the Chairman of the Board.<\/p>\n

Today IDLO offers an invaluable training and technical assistance for legal professionals in developing and transition economy countries. The success of the organization is in great part due to the role played by its first Chairman of its Board of Directors, Mr. Shihata.<\/p>\n

Legal Opinions as a Means of Change\u00a0<\/strong><\/h1>\n

Mr. Shihata understood the challenges that could arise from a modern institution\u00a0required\u00a0to operate under a charter written in the past.\u00a0He believed the establishing documents could no longer be applied literally, given that the world, the people, and the nature of relationships were in constant change. Mr. Shihata was aware of the need for revisions, as the rules needed to adapt to these changes through means of what he called \u201cpurposive interpretations.\u201d The principle behind purposive interpretation is one that calls for the retention of the purpose or objective of the Articles without violating the explicit words of the text. It is under this approach that many new development concepts could be introduced to the World Bank.\u00a0Mr. Shihata\u2019s legal opinions helped transform how the World Bank carried its mandate.<\/p>\n

Political activities Prohibited<\/em><\/p>\n

One of Mr. Shihata\u2019s famous legal opinion is the \u201cProhibition of Political Activities in the Bank\u2019s Work.\u201d Through this legal opinion, Mr. Shihata set the appropriate boundaries of what separates the World Bank mandate from political affairs. He believed that the Bank is an intergovernmental and financial institution that relies on borrowing from the market and should not be subject to the vagaries and the double standards of politics which are inevitable. According to Mr. Shihata, insulating the Bank from partisan politics and from the short-term interests of its members was a very important pillar on which the institution was founded. He strongly considered it part of his job to maintain that distance for the best interests of the institution.<\/p>\n

Stabilization Loans<\/em><\/p>\n

During the Asian Financial Crisis in 1997, Mr. Shihata raised the possibility for providing affected countries \u201cstabilization loans\u201d, a never-seen-before initiative which had no legal prohibitions. Mr. Shihata\u2019s legal opinion drew on an early interpretation of the Articles, made clear that the World Bank could lend for purposes other than the restrictive and narrow understanding of the concept of projects (that mainly associated with engineering projects) when special circumstances existed, provided that the operations would fall within the purposes of the World Bank as envisioned in the Articles of Agreement.<\/p>\n

Debt Reduction Operations\u00a0<\/em><\/p>\n

Another of Mr. Shihata\u2019s legal opinions underpinned the debt reduction operations of the World Bank. In 1982, Mexico was facing a debt crisis and it became clear that it could not be solved unless the debt burden was reduced. The World Bank\u2019s Articles however would not allow it to be a debt refinancing channel. Mr. Shihata put forth an explanation that served to place World Bank support for debt and debt service reduction operations within the Articles\u2019 framework: a debt reduction operation would only be permissible if it would assist the country in receiving or making investments for productive purposes which would not otherwise take place. As a result, the World Bank could support such operations under the overall financing plan and appropriate adjustment policies which not only reduced the debt service obligations to a manageable size, but would also allow for economic development and put a heavily indebted country back on the path of sustainable development.<\/p>\n

To this day Mr. Shihata\u2019s views of the World Bank\u2019s Articles of Agreement continue to serve the institution and keep the World Bank relevant in a world dramatically different than the one envisioned by the drafters of the Articles.<\/p>\n

\"\"<\/figure>\n

Meeting of Executive Directors of World Bank, Washington DC, June 13, 1995<\/p>\n

Legal Scholar<\/strong><\/h1>\n

Apart from his professional occupation, Mr. Shihata was a prolific writer with three honorary doctorates in law. Mr. Shihata\u2019s Harvard Law School doctoral dissertation \u201cThe Power of the International Court to Determine Its Own Jurisdiction\u201d has been observed as an \u201cexhaustive work\u201d that until now remains a leading treatise on the International Court of Justice.<\/p>\n

Mr. Shihata published close to 30 books and over 200 essays. His eleven\u00a0books on matters related to the World Bank\u2019s work made him a much-quoted legal writer on the institution he served.His last\u00a0book\u00a0\u201cThe World Bank Legal Papers<\/em><\/a>\u201d compiled the legal opinions he rendered as General Counsel.\u00a0 Mr. Shihata was an exceptional lawyer who laid many foundations of international finance and development law.<\/p>\n

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Photo: Shihata Family Photo Album<\/p>\n

The Story of a Legend<\/strong><\/h1>\n

During his time, Mr. Shihata transcended the perception of the role of the General Counsel at the World Bank. As the General Counsel of the Bank, he set the highest standards for what a General Counsel of the World Bank should be to\u00a0first\u00a0to serve its\u00a0clients, the most vulnerable of the\u00a0world. He also sought to maintain the integrity of the World Bank as an institution, and to remain honest towards the World Bank stakeholders. He created the legend by being\u00a0first\u00a0an excellent lawyer. He brought to the job of a General Counsel, the dedication of the teacher, the knowledge of the scholar, the experience of the practitioner and the wisdom of the Statesman. Mr. Shihata believed that the General Counsel of the World Bank should be detached from what he or she likes or dislikes, and\u00a0look into\u00a0what is required in the Articles of Agreement under the applicable rule of law to take a position that can be legally defended. He was a man of integrity, objectivity, and loyalty to the mission of the World Bank in his service to the Presidents and Executive Directors of the Bank. Respect for the law was his central concern, not just in his writing and speaking, but in his thinking and his decisions in his daily professional conduct. James Wolfensohn, former President of the World Bank Group, described him as \u201cone of the greatest international jurists of the 20th century.\u201d<\/p>\n

Departure\u00a0<\/strong><\/h1>\n

Mr. Shihata retired in 2000 as Senior Vice President and Special Adviser to the World Bank\u2019s President. On May 28, 2001, Mr. Shihata passed away in\u00a0Washington D.C. He is survived by his wife and their three children.<\/p>\n

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