Assessing African Regional Investment Instruments and Investor–state Dispute Settlement

Abstract

This article examines the rejection of the International Investor–State dispute (ISDS) system across the African continent and its replacement with a range of domestic and regional alternatives. It assesses the advantages of the two principal options for African countries: retaining the current ISDS system, or using local courts and regional tribunals. To this end, the dispute resolution mechanisms proposed in the Pan-African Investment Code, the 2016 Southern African Development Community Finance and Investment Protocol, the SADC model BIT, the Common Market for Eastern and Southern Africa, Economic Community of West African States and East African Community investment agreements and domestic approaches are critically examined. The argument is then advanced that African countries should not abandon ISDS because replacing it with isolated domestic or regional mechanisms does not reduce any of the risks. In particular, for foreign investors, the risk associated with the adjudication of investment disputes in potentially biased, politically influenced domestic courts may prove too high. African host nations, in turn, risk sending out the wrong message concerning their commitment to the protection of foreign investments. Instead of veering off course, perhaps the time has come for African States to display the political will to remain within the ISDS system and contribute to its reform from within.

Africanacity of International Investment Law: A Reflection on Investment Agreements in Africa

“…437-468, at 449. 16 Denters E. & Gazzini T., "The Role of African regional organizations in the promotion and protection of foreign investment. ", Journal of World Investment & Trade, 18.3, 2017, pp.…”

“…15 The concepts of "fair and equitable treatment" and full protection and security are included in the standard. 16 Investors and Investments are subject to the laws and regulations of the host State, 17 including those on pre-establishment such as environmental impact assessment 18 and anticorruption regulations. 19 There are also post-establishment obligations that include hygiene, security, health and social welfare rules in force in the host country.…”

“…15 Art 7 of the ECOWAS Supplementary Act. 16 Art 792) ECOWAS Supplementary Act. 17 Art 11 (1) of the ECOWAS Supplementary Act.…”

“…15 In the midst of African protest against the "biased-imperialist" ISDS system, African regional trade agreements have resorted to establishing regional and national mechanisms for adjudicating investment disputes. 16 ISDS mechanisms shield investors from any political pressure that might appear in the domestic forums of a host-state. 17 Debates over the relevance and legitimacy of the ISDS mechanism will never cease, even in the imagination of the author of this article.…”