Africa

African states are party to over 900 investment agreements, the vast majority of which have been signed with non-African countries.

The Economic Community of West African States (ECOWAS) Treaty, signed by Benin, Burkina Faso, Cape Verde, Gambia, Ghana, Guinea, Guinea-Bissau, Ivory Coast, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo, contains investment-state dispute settlement (ISDS) provisions, but no disputes have been registered to date

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 20% of all ICSID arbitration disputes have involved African states.

Egypt has been the fourth most targeted state worldwide with 26 registered ISDS cases against it. It is currently facing a dispute initiated by French utility services giant Véolia over a law increasing the minimum wage.

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.

Burundi and the Democratic Republic of Congo have been the most targeted in sub-Sahara Africa, both with four disputes all initiated by Belgian and US investors respectively.

(February 2017)

Standard Media | 21-Feb-2018
Kenya is facing cases at International Centre for Settlement of Investment Disputes (ICSID) with claims amounting to Sh334 billion.
Reuters | 21-Feb-2018
International mining companies are lobbying Kabila not to sign the new code, saying the proposed changes would discourage investment and violate existing agreements. Randgold has threatened to challenge the law through international arbitration.
Bloomberg | 19-Feb-2018
Randgold is considering launching international arbitration if Congolese President gives his assent to the legislation.
Freedom Newspaper | 19-Feb-2018
How can the Goverment risk billions of dalasis in arbitration costs, once more, with Africa Petroleum? What money will pay for this trial?
African Law Business | 14-Feb-2018
South Africa’s new arbitration law came into force at the end of 2017. Now lawyers and clients alike will have to see if it lives up to its promises.
La Tribune Afrique | 9-Feb-2018
Plusieurs sociétés minières internationales réclament 3,3 milliards de dollars au Kenya auprès du Centre international pour le règlement des différends relatifs aux investissements.
Business Daily | 8-Feb-2018
Global mining firms want Kenya compelled to pay Sh334 billion as compensation for cancelling their licences.
Business Day | 7-Feb-2018
International mining companies, which include Randgold, Glencore and China Molybdenum, have said they will challenge the new law through international arbitration, and are lobbying Kabila not to sign it.
The Citizen | 5-Feb-2018
A Johannesburg businessman, trying to sue the Mozambique government for over $91 million (R1 billion), has taken the SA government to court after officials allegedly sided with the neighbouring country in the dispute.
Milieu Defensie | 12-Jan-2018
The French oil company Total evicts people from their land in Uganda to make room for an oil processing facility.

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