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)

IISD | 3-Dec-2008
In a 12 November 2008 final award, an ICSID tribunal has dismissed all claims by two Italian investors, L.E.S.I S.p.A. and ASTALI S.p.A, in a dispute with the government of Algeria over a failed contract to construct a hydraulic dam.
Multinational Monitor | 24-Nov-2008
British water giant Biwater cannot use an investment treaty to make Tanzania pay millions for an abrogated water privatization contract, an international tribunal ruled in July.
| 28-Jul-2008
A British water company thrown out of Tanzania over a bungled privatisation deal has failed in its bid to win up to £10m in damages.
Engineering News | 7-Feb-2008
Foreign companies operating in South Africa that have lost production and ultimately profit as a result of the power supply crisis might be able to sue the government under bilateral investment treaties
AllAfrica.com | 17-Nov-2007
The Zimbabwe government has admitted that it wronged white commercial farmers when it violently evicted them from their farms at the height of Zanu PF-instigated land invasions in 2000.
FWI | 9-Nov-2007
A group of Dutch farmers is one step closer to gaining compensation for land and farms lost to the government of Zimbabwe, after a recent hearing in Paris.
AllAfrica.com | 13-Oct-2007
The last remaining white commercial farmers have appealed to the regional Southern African Development Community (Sadc) Tribunal in an effort to stop government from expropriating their properties.
The Guardian | 17-Aug-2007
Tanzania was glad to secure the services of a British-led consortium to run the newly privatised water system in its capital Dar es Salaam. But then the price of water started to rise
Moneyweb | 30-Mar-2007
Finstone Ltd SA, a foreign mining company based in Luxembourg, is suing the South African government for an alleged expropriation of its mineral rights. Finstone is a holding company in control of three South African granite producing operations i.e. Marlin, Red Graniti and Kelgran. The real challenge posed by this legal action is that the abovementioned investors find the black economic empowerment programme is in violation of the bilateral treaties signed with South Africa by both Luxembourg and Italy.
Mining MX | 16-Feb-2007
A foreign mining company is suing the South African government over alleged expropriation of its mineral rights in a move that has huge implications for the country’s new mining dispensation.

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