Extractivism and Corporate Privileges in the Milei Era An Analysis of the Large Investment Incentives Regime (RIGI)

To understand the implications of the RIGI, it is necessary to situate it within the legal framework for investment protection built since the 1990s. The Bilateral Investment Treaties (BITs) that Argentina signed with 54 countries since the 1990s (48 of these currently in force) granted significant protections to foreign capital: legal stability, access to international arbitration, protection against expropriations (direct and indirect), national treatment, fair and equitable treatment, among other privileges.1

In August 2024, the RIGI came into force, being the centerpiece of Javier Milei's government's “Law of Bases and Starting Points for the Freedom of Argentines”. The RIGI represents a qualitative leap in the logic built since the 1990s. While BITs only protected capital from specific countries with which Argentina had signed bilateral treaties, the RIGI extends these privileges to all forms of capital, national and foreign alike. Further, it significantly expands the range of protections, creating a regime that transcends traditional frameworks of international investment law.

To adhere to the RIGI, companies must invest more than 200 million dollars in either of eight specific sectors: oil and gas, mining, energy, forest-industry, tourism, infrastructure, technology, and steel. For the so-called "Long-Term Strategic Export Projects," the floor rises to 2 billion dollars.

The deadline to adhere to the regime expires in August 2026, although the Executive Branch has the power to extend it for one more year, creating a sense of urgency that favors hasty decisions and the waiver of stricter conditions.

After one year of RIGI, the data resoundingly confirms its primary-extractive character. According to information from the RIGI Observatory (and confirmed by the Transnational Institute together with civil and academic organizations in Argentina), one year after its implementation, 19 projects worth more than 30 billion dollars were received: 7 were approved (for 13.067 billion dollars), 1 was rejected, and the rest continue under evaluation.2 The approved projects are distributed across hydrocarbons (2), mining (2), renewable energy (2), and steel (1). In the hydrocarbons sector, the main investments are oriented toward building export infrastructure. In mining, copper and lithium lead the submitted initiatives, with projects located mainly in the provinces of San Juan, Salta, and Catamarca.

Far from diversifying Argentina's productive matrix, the RIGI deepens the country's dependence on extractivism, consolidating its role as a raw material supplier in global value chains without allowing industrial upgrading.

Despite official rhetoric about massive job creation, the numbers reveal these projects’ limited capacity to generate employment. It is estimated that the 19 projects could generate around 6,000 direct jobs and 20,000 indirect ones, although these are difficult numbers to corroborate given the scarce transparency of official information. For example, the Rincón project operated by the giant Rio Tinto mining corporation, estimates 2,500 workers during construction and 1,000 in operation. These figures contrast dramatically with the employment needs of a country facing rising unemployment levels.

This regime grants major benefits to corporations. The first pillar of RIGI is armored fiscal stability, which guarantees that the tax burden will not be increased for 30 years, a period that transcends multiple electoral cycles and governments. This guarantee represents an extraordinary renunciation of the State's fiscal capacity, subordinating economic policy decisions to corporate interests.

Import and export exemptions allow qualifying companies to import everything from complex machinery to basic elements like work clothing, without contributing to the development of national value chains. This nullifies any possibility that large investments might energize local industry, consolidating an enclave logic that disconnects large corporations from the national economy.

Regarding foreign exchange, the regime grants exceptional privileges through gradual access to free availability of foreign currency from exports, beginning with 20% in the first year, rising to 40% the second, and reaching 100% from the third year onward. This benefit is extraordinary in a country that historically faces exchange restrictions and where access to foreign currency constitutes one of the main bottlenecks for economic development. While traditional productive sectors and small and medium enterprises face limitations in accessing foreign currency, RIGI corporations enjoy practically unrestricted exchange freedom.

Tax exemptions are another central aspect of the privileged regime. The reduction of income tax from 35% to 25% represents a direct transfer of resources from the state to companies. Additionally, VAT payment through transferable fiscal credit certificates, the elimination of withholdings for three years, and the full computation of check tax as credit in Income Tax configure a fiscal package that effectively subsidizes companies to the detriment of state revenue.

On the other hand, investment protection is not limited to the legal sense. One of the most disturbing aspects of the RIGI is the creation of the Unified Productive Security Command, which puts federal forces at the service of protecting private enterprises. This measure represents a militarization of territory to protect corporate interests, subordinating public security to private investment security and setting a dangerous precedent for the restrictions of public space.

A central element of the RIGI is that it expands the rights granted to investors through BITs. While these treaties only protect capital from specific countries with which Argentina has bilateral treaties, the RIGI "democratizes" these privileges for all capital, no matter where it is from. This extension has profound geopolitical implications. Investors from countries that traditionally have had less access to international protections now enjoy the same guarantees as capital from nations with a long tradition of BITs with Argentina. Even more significant, national capital obtains rights that traditionally only foreigners had, including access to international arbitration forums like ICSID (International Centre for Settlement of Investment Disputes).

This means that an Argentine company adhering to the RIGI can sue the Argentine State in international tribunals, something unthinkable in the traditional legal framework. This information is relevant when considering that YPF (Yacimientos Petrolíferos Fiscales), a company with state majority shareholding (51% in the hands of the Argentine State), is one of the most active RIGI beneficiaries with three approved projects: the El Quemado Solar Park in Mendoza through YPF Luz, its participation as shareholder in the Vaca Muerta Sur Pipeline (VMOS S.A.), and its active role in the liquefied natural gas (LNG) project of the Southern Energy consortium, of which 25% corresponds to YPF (and which involves a giant investment of 6.878 billion dollars in its different stages). Ultimately, the great novelty is that the Argentine State, through YPF, can potentially sue itself in international tribunals if it considers that its own policies affect the state company's interests.

The RIGI materializes the subordination of Argentine economic policy to the interests of big capital and the extractivist project, seriously compromising the environmental sustainability of entire territories and curtailing the State's capacity for action for three decades. In the context of global climate crisis and growing geopolitical disputes, this regime deepens a dependent primary-export model that has historically demonstrated its inability to resolve the structural problems of poverty and inequality in Latin America.

In this way, Argentina's RIGI can serve as a warning for the rest of Latin American countries about the risks of the new wave of "investment-friendly" normative frameworks proliferating in the region, which expand the protection framework of BITs. This trend includes everything from the "legal stability contracts" that have been signed in Colombia since 2006, to the "special economic zones" in Peru with the Port of Chancay (and the creation of a logistical and commercial hub), passing through the regulations of countries like El Salvador and Honduras that have included in their national laws the capacity for all foreign investors (beyond the existence of specific BITs) to have access to the investor-state dispute settlement mechanism (ISDS).

All these new regulations represent the evolution of investment protection mechanisms toward more restrictive forms of state regulatory capacity. While Latin American countries compete to offer increasingly advantageous conditions to external capital for extractive projects, a race to the bottom occurs that consolidates patterns of structural dependency and systematic violation of human and environmental rights. Thus, the asymmetrical relations that have historically characterized Latin American insertion in the world economy are perpetuated.