Africa

African states are party to over a thousand investment agreements, the vast majority of which have been signed with non-African countries.

In 2006, Members of the Southern African Development Community (SADC) (Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland) signed the SADC Finance and Investment Protocol that also includes the ISDS mechanism. Only two claims have been registered under these terms, both against Lesotho (but the governments in the region do not typically disclose such information). In 2016 amendments to the protocol were adopted. They eliminated ISDS provisions (only state-to-state arbitration remained) and narrowed the scope of investors’ rights.

In South Africa, shortly after settling a dispute with foreign mining companies over its new post-apartheid mining rules (Piero Foresti & Others case), the government began to withdraw from bilateral investment treaties (BIT) that include ISDS, arguing they belonged to a bygone era. It claimed BITs focus on the interests of investors from developed countries and do not address concerns of developing countries.

The South African government decided to develop a new model BIT and strengthen its domestic legislation in regard to the protection offered to foreign investors, such as compatibility of BIT-type protection with South African law. South Africa also sought to incorporate legitimate exceptions to investor protection where warranted by public interest considerations.

Provisions of South Africa’s new model BIT have been incorporated into SADC’s. This model sets out provisions that mitigate the risks of earlier treaties and leaves open the option for state-to-state dispute settlement in addition to investor-state dispute settlement procedures.

In 2014, voices from the Namibian government cast doubts on the correlation between foreign direct investment and investment treaties including ISDS. They argued that ISDS represented a risk for developing countries, due to important legal fees and awards which can pose a significant budgetary threat. Further, statistics show most claimants come from developed countries.

About 11% of all arbitration disputes have involved African states.

In 2013, an arbitration court ordered Libya to pay US$935 million in a dispute over a land-leasing contract for a tourism project, making it one of the largest known awards to date.

Egypt has been the fifth most targeted state worldwide with 34 registered ISDS cases against it. Tanzania has been the most targeted country in sub-Sahara Africa with six disputes, all of which were initiated by European investors.

Photo: Hansueli Krapf / CC BY-SA 3.0

(April 2020)

BuzzFeed | 30-Aug-2016
A parallel legal universe, open only to corporations and largely invisible to everyone else, helps executives convicted of crimes escape punishment.
Financial Express | 16-Aug-2016
It is likely that the Antrix case — which could see the Government of India paying $1 billion if it loses — would have had a different outcome had the new model BIT been at issue.
The Economist | 13-Aug-2016
Three years ago, the government of Togo received a letter from Philip Morris International outlining how plain packaging would violate binding global and regional agreements.
The Economist | 4-Aug-2016
Philip Morris International sent a letter to the government of Togo. It outlined how plain packaging would violate binding global and regional agreements. Togo was in no position to anger its international partners, it suggested.
Institut Afrique Monde | 13-Jul-2016
La dernière décennie a vu un épanouissement de l’arbitrage international en Afrique. Répond-il aux espoirs que l’Afrique a placés en lui ?
Reuters | 5-Jul-2016
French oil major Total has filed a request for arbitration against Algeria for changing profit-sharing terms on oil and gas contracts in the mid-2000s
Le Monde | 4-Jul-2016
Total vient, en toute discrétion, d’engager un contentieux contre l’Algérie et sa compagnie pétrolière d’Etat, la Sonatrach.
Jeune Afrique | 4-Jul-2016
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ICTSD | 30-Jun-2016
La problématique de la libéralisation des investissements est une question qui mérite toute l’attention des pays africains. Quelle approche devraient-ils adopter dans ce domaine ?
Business Day | 17-Jun-2016
Legal practitioners have been saying for some time now that SA’s Protection of Investment Act is not in sync with the country’s commitments under the Southern African Development Community Protocol on Finance and Investment.

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