Abstract
African States, African Regional Economic Communities (RECs), and the African Union have adopted a number of new investment instruments in recent years. Many of these instruments are highly innovative and mark a clear departure from old European-styled IIAs. The Africanization of international investment law or, in other words, the prise en main of African States and organizations to design the regulation of international investment according to their policy and development priorities has become an evident contemporary phenomenon. At the same time, the most innovative approaches can be found in intra-African IIAs, i.e., in IIAs concluded between two or more African States or concluded by RECs. When looking at extra-African IIAs, it becomes apparent that African States and RECs were not yet fully successful in transposing their new models to non-African negotiating partners as the outcome of most negotiations highlights that African States, in the end, give in to the model treaty of their respective partner countries. The objective of this contribution is to present African IIAs in a straightforward manner seeking to allow the reader to gain a systemic overview of African IIAs and other African investment instruments (e.g., model IIAs).
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Notes
- 1.
Africa’s Regional Economic Communities (RECs) include subregional bodies which are the building blocks of the African Economic Community established in the 1991 Abuja Treaty which provides the overarching framework for continental economic integration.
- 2.
The African Union (AU) is a continental organization consisting of 55 African States. The AU was founded in 2001. Its headquarters are located in Addis Ababa, Ethiopia.
- 3.
Mbengue MM, Schacherer S (2017) The ‘Africanization’ of international investment law: the pan-African investment code and the reform of the international investment regime. J World Invest Trade 18:414–448; see also Mbengue MM, Schacherer S (2018) Africa and the rethinking of international investment law: about the elaboration of the pan-African investment code. In: Anthea R et al (eds) Comparative international law. Oxford University Press, Oxford. See also, Mbengue MM (2017) Special issue: Africa and the reform of the international investment regime. J World Invest Trade 18:371–378; Mbengue MM, Negm MH (2019) An African view on the CETA investment chapter. In: Mbengue MM, Schacherer S (eds) Foreign investment under the comprehensive economic and trade agreement (CETA). Springer International Publishing, Cham, pp 239–269.
- 4.
The present Handbook contains a connected Chapter on “Africa and the International Investment Regime” written by Npoanlari Dagbanja D (2019) Africa. In: Krajewski M, Hoffmann R (eds) Research handbook on foreign direct investment. Edward Elgar Publishing, Cheltenham, pp 336–362.
- 5.
The term has first been used in the context of the surge of US free trade agreements; see Bhagwati J (1995) US trade policy: the infatuation with FTAs. Columbia University April 1995 Discussion paper series no 726.
- 6.
Legal security in the host country is generally considered to be one of the factors that a foreign investor takes into account, but it is not considered to be the decisive one; see Dolzer R, Schreuer C (2012) Principles of international investment law, 2nd edn. Oxford University Press, Oxford, UK, p 23.
- 7.
UNCTAD. International Investment Agreement Database. http://investmentpolicyhub.unctad.org/IIA. Accessed 20 June 2019
- 8.
For instance, Turkey concluded in the last 5 years BITs with Benin (2013), Burundi (2017), Chad (2017), Côte d’Ivoire (2016), Djibouti (2013), Gambia (2013), Ghana (2016), Guinea (2013), Kenya (2014), Mali (2018), Mauretania (2018), Mozambique (2017), Rwanda (2016), Somalia (2016), Sudan (2014), and Zambia (2018).
- 9.
See below, section “BITs with China.”
- 10.
For instance, the United Arab Emirates (UAE) concluded in the last 5 years BITs with Mali (2018), Rwanda (2017), Uganda (2017), Angola (2017), Ethiopia (2016), Equatorial Guinea (2016), Nigeria (2016), Senegal (2015), Mauritius (2015), Mauritius (2015), and Kenya (2014).
- 11.
Cotula L, Weng X, Ma Q, Ren P (2016) China-Africa investment treaties: do they work? IIED, London. Available at https://pubs.iied.org/pdfs/17588IIED.pdf, p 26
- 12.
Germany (52) and Switzerland (46). They are followed by China (33), Belgium-Luxemburg Economic Union (32), Italy (32), Netherlands (30), Turkey (30), France (25), United Kingdom (24), Portugal (21), and Spain (19).
- 13.
UNCTAD. International Investment Agreement Database. http://investmentpolicyhub.unctad.org/IIA. Accessed 20 June 2019
- 14.
United Nations Economic Commission for Africa (UNECA) (ed) (2016) Investment policies and bilateral investment treaties in Africa: implications for regional integration. Economic Commission for Africa, Addis Ababa, p 4
- 15.
Ibid., p. 17
- 16.
Ibid.
- 17.
See OECD (1967) Draft Convention on the Protection of Foreign Property.
- 18.
United Nations Economic Commission for Africa (ed) (2016) Investment policies and bilateral investment treaties in Africa: implications for regional integration. Economic Commission for Africa, Addis Ababa, p 19
- 19.
Cotula, Weng, Ma, and Ren (2016) and Chaisse J, Oloaye K (2020) The tired dragon: casting doubts on China’s investment treaty practice. Berkeley Bus Law J 17(1):88–120
- 20.
For more details, see Huiping C (2013) Recent approaches in China’s BITs and impact on African countries. Proc ASIL Ann Meet 107:228–230.
- 21.
Kidane W (2016) China’s bilateral investment treaties with African states in a comparative context’ 49. Cornell Int Law J 141:175–176
- 22.
Canada’s first BIT with an African country was its agreement with Egypt, which entered into force in 1997. Subsequently, Canada signed a BIT with South Africa that never entered into force.
- 23.
For more details, see VanDuzer JA (2017) Canadian investment treaties with African countries: what do they tell us about investment treaty making in Africa? J World Invest Trade 18:556–584.
- 24.
Johnson L, Sachs L (2015) International Investment Agreements, 2013: a review of trends and new approaches. In: Bjorklund A (ed) Yearbook on international investment law & policy, 2013–2014. Oxford University Press, New York, p 25, 53
- 25.
VanDuzer JA (2017) Canadian investment treaties with African countries: what do they tell us about investment treaty making in Africa? J World Invest Trade 18:556–584, 576
- 26.
See Canadian Model BIT (2004), Art 3(3).
- 27.
See Canadian Model BIT (2004), Art 11.
- 28.
For more details, see VanDuzer JA (2017) Canadian investment treaties with African countries: what do they tell us about investment treaty making in Africa? J World Invest Trade 18:556–584, 571–574.
- 29.
Canada-Burkina Faso BIT (2015), preamble, recital 2: “UNDERSTANDING that investment is a form of sustainable development that meets present needs without compromising the ability of future generations to meet their own needs and that it is critical for the future development of national and global economies as well as for the pursuit of national and global objectives for sustainable development”; see also, Art. 3(6): “Each Party shall encourage the creation of jobs in Burkina Faso through Canadian investments and the creation of jobs in Canada through investments from Burkina Faso, as well as the development of the skills related to these jobs.”
- 30.
See Hesham T. M. Al-Warraq v. Republic of Indonesia, UNCITRAL, Final Award, 15 Dec 2014. Other known cases initiated under the OIC Agreement, are Kontinental Conseil Ingénierie v. Gabonese Republic, PCA Case No. 2015–25, Final Award, 23 Dec 2016; Itisaluna Iraq LLC and others v. Republic of Iraq, ICSID Case No. ARB/17/10 (pending); D.S. Construction FZCO v. Libya, PCA Case No. 2017–21, UNCITRAL (pending).
- 31.
Bernasconi-Osterwalder N, Dietrich Brauch M (2015) Brazil’s Innovative Approach to International Investment Law. 15 Sep 2015, ITN News. https://www.iisd.org/blog/brazils-innovative-approach-international-investment-law. See Brazil-Malawi CIFA, Art 1(1): “The objective of this Agreement is to promote co-operation between the Parties in order to facilitate and encourage mutual investment.”
- 32.
UNCTAD. International Investment Agreement Database. http://investmentpolicyhub.unctad.org/IIA. Accessed 20 June 2019
- 33.
See, e.g., Brazil-Ethiopia CIFA (2018), Arts 5, 6, 7, and 10.
- 34.
See Brazil-Malawi CIFA (2015), Art 9(1): “Investors and their investment shall strive to achieve the highest possible level of contribution to the sustainable development of the Host Party and the local community, through the adoption of a high degree of socially responsible practices, based on the voluntary principles and standards set out in this Article.”
- 35.
The Agreement entered into force in April 2003 and has been revised in 2005 and 2010.
- 36.
Chaisse J (2012) Promises and pitfalls of the European Union policy on foreign investment – how will the new EU competence on FDI affect the emerging global regime. J Int Econ Law 15(1):51–84
- 37.
Cotonou Agreement, Art 21(1)
- 38.
See SADC-EU EPA (2016) (not yet in force); available at https://investmentpolicyhubold.unctad.org/Download/TreatyFile/5812. Accessed 20 June 2019.
- 39.
Central Africa countries include Cameroon, Central African Republic, Chad, Congo (Brazzaville), Democratic Republic of the Congo (Kinshasa), Equatorial Guinea, Gabon, and São Tomé and Principe.
- 40.
Eastern and Southern Africa countries include Comoros, Djibouti, Eritrea, Ethiopia, Madagascar, Malawi, Mauritius, Seychelles, Sudan, Zambia, and Zimbabwe.
- 41.
The EU has initiated an Economic Partnership Agreement with 16 West African States, the Economic Community of West African States (ECOWAS), and the West African Economic and Monetary Union (WAEMU).
- 42.
SADC-EU EPA, Art 1(e): support the conditions for increasing investment and private sector initiatives and enhancing supply capacity, competitiveness and economic growth in the SADC EPA States.
- 43.
SADC-EU EPA, Art 67
- 44.
SADC-EU EPA, Art 74
- 45.
See, e.g., SADC-EU EPA, Art 74(1): “The EU and the Participating SADC EPA States agree to cooperate on investment in accordance with Article 13(6) and may in future consider negotiating an agreement on investment in economic sectors other than services.”
- 46.
UNCTAD. International Investment Agreement Database. http://investmentpolicyhub.unctad.org/IIA. Accessed 20 June 2019
- 47.
Crosato A, Durmaz E, Semertzi A (2016) Africa’s investment regime: assessing international investment agreements in the light of current trends and needs in Africa, p 28
- 48.
See, for instance, Kenya-Burundi BIT (2009), Ghana-Burkina Faso BIT (2001), and Mali-Senegal BIT (2005).
- 49.
Reciprocal Investment Promotion and Protection Agreement between the Government of the Kingdom of Morocco and the Government of the Federal Republic of Nigeria (signed 3 December 2016, not yet in force) https://investmentpolicyhubold.unctad.org/Download/TreatyFile/5409. Accessed 20 June 2019
- 50.
Ibid., Art 1(3)
- 51.
Ibid.
- 52.
Ibid., Art 7:
- 1.
Each Party shall accord to investments treatment in accordance with customary international law, including fair and equitable treatment and full protection and security.
- 2.
For greater certainty, paragraph 1 prescribes the customary international law minimum standard of treatment of aliens as the minimum standard of treatment to be afforded to covered investments. The concepts of “fair and equitable treatment” and “full protection and security” do not require treatment in addition to or beyond that which is required by that standard and do not create additional substantive rights. The obligation in paragraph 1 is to provide:
- (a)
“fair and equitable treatment” includes the obligation not to deny justice in criminal, civil, or administrative adjudicatory proceedings in accordance with the principle of due process embodied in the principal legal systems of a Party.
- (b)
“full protection and security” requires each Party to provide the level of police protection required under customary international law.
- (a)
- 3.
A determination that there has been a breach of another provision of this Agreement, or of a separate international agreement, does not establish that there has been a breach of this Article.
- 4.
For greater clarity, the Parties confirm their shared understanding that “customary international Law” generally and as specifically referred in this Agreement results from a general and consistent practice of States that they follow from a sense of legal obligation. The Parties also confirm that the customary international law minimum standard of treatment of aliens refers to all customary international law principles that protect the economic rights and interest of aliens.
- 1.
- 53.
Ibid., Art 14(1–2)
- 54.
Ibid., Art 14(3)
- 55.
Ibid., Art 18
- 56.
Ibid., Art 19
- 57.
Ibid., Art 24
- 58.
Ibid., Art 26
- 59.
Ibid., Art 20: “Investors shall be subject to civil actions for liability in the judicial process of their home state for the acts or decisions made in relation to the investment where such acts or decisions lead to significant damage, personal injuries or loss of life in the host state.”
- 60.
Gesellschaft für Technische Zusammenarbeit (GTZ) (2009) Regional economic communities in Africa: a progressive overview. 8 www2.giz.de/wbf/4tDx9kw63gma/RECs_Final_Report.pdf. Accessed 20 June 2019
- 61.
Ibid., 9
- 62.
See, for instance, the EAC Treaty, Arts 79 and 80.
- 63.
The following analysis is based on data from UNCTAD; see UNCTAD. International Investment Agreement Database. http://investmentpolicyhub.unctad.org/IIA. Accessed 20 June 2019
- 64.
For instance, the 1965 CEMAC Investment Agreement, the 1982 ECGLC Investment Code, or the 1990 Arab Maghreb Union Investment Agreement; the ECOWAS adopted two protocols that relate indirectly to foreign investment: the 1984 ECOWAS Protocol on Community Enterprises and the 1979 ECOWAS Protocol on Movement of Persons and Establishment.
- 65.
United Nations Economic Commission for Africa (UNECA) (2012) Assessing regional integration in Africa V: towards an African continental free trade area. ECA, p 3. www.unece.org/fileadmin/DAM/trade/TF_JointUNRCsApproach/ECA_RegionalIntegrationInAfrica.pdf. Accessed 20 June 2019
- 66.
Crosato, Durmaz, and Semertzi (2016), p. 26
- 67.
See, for instance, EAC also launched investment initiatives by adopting a model investment code in 2006; see EAC Model Investment Code of 2006. www.tralac.org/images/Resources/EAC/EAC%20Model%20Investment%20Code%202006.pdf. Accessed 20 June 2019
- 68.
Crosato, Durmaz, and Semertzi (2016), p. 26
- 69.
See Investment Agreement for the COMESA Common Investment Area (signed 23 May 2007) http://investmentpolicyhub.unctad.org/IIA/treaty/3225. Accessed 20 June 2019.
- 70.
Muchlinski P (2010) The COMESA common investment area: substantive standards and procedural problems in dispute settlement’ SOAS school of law research paper no 11/2010
- 71.
COMESA Investment Agreement (2007), Art 13: “COMESA investors and their investments shall comply with all applicable domestic measures of the Member State in which their investment is made.”
- 72.
UNCTAD (2018) Investment and new industrial policies. United Nations, New York/Geneva, p 90
- 73.
The text is on file with the authors.
- 74.
One can note that this is a clear influence of the South African approach; see Investment Promotion and Protection Bill (2015), Act No. 22 of 2015, Official Gazette, Vol. 606, No. 39514, Section 6.
- 75.
ECOWAS Treaty (revised in 1993); the ECOWAS Protocol on Movement of Persons and Establishment; the ECOWAS Energy Protocol; as well as the ECOWAS Supplementary Act on Investments; see https://investmentpolicy.unctad.org/international-investment-agreements/groupings/26/ecowas-economic-community-of-west-african-states-. Accessed 20 June 2019.
- 76.
ECOWAS Supplementary Act A/SA.3/12/08 Adopting Community Rules on Investment and the Modalities for their Implementation with ECOWAS (2008)
- 77.
Happold M, Radović R (2018) The ECOWAS court of justice as an investment tribunal. J World Invest Trade 19:95–117
- 78.
ECOWAS Supplementary Act, Art 33:
“6. Any dispute between a host Member State and an Investor, as envisaged under this Article that is not amicably settled through mutual discussion may be submitted to arbitration as follows:
(a) a national court; (b) any national machinery for the settlement of investment disputes; (c) the relevant national court of the Member States.
7. Where in respect of any dispute envisaged under this Article, there is disagreement as to the method of dispute settlement to be adopted; the dispute shall be referred to the ECOWAS Court of Justice.”
- 79.
ECOWAS Common Investment Code (ECOWIC), July 2018; the document is not publicly available; on file with the authors.
- 80.
Ibid., Art 1(h): “(…) a significant contribution to the host State’s economic development”
- 81.
This constitutes a striking similarity with the PAIC. The PAIC will be discussed hereafter; see section “The Pan-African Investment Code (PAIC).”
- 82.
Ibid., Arts 21–26, 30–31, 35–37 ff
- 83.
Ibid., Arts 17 and 31
- 84.
Ibid., Art 32
- 85.
Ibid., Arts 27 and 29
- 86.
Ibid., Arts 34 and 38
- 87.
See SADC Protocol on Finance and Investment (signed 18 August 2006) http://investmentpolicyhub.unctad.org/Download/TreatyFile/2730. Accessed 20 June 2019. In August 2016, SADC member States have adopted an amended version of the Protocol on Finance and Investment, which yet needs to be ratified. For more details see Luke Eric Peterson, “Investigation: In Aftermath of Investor Arbitration Against Lesotho, SADC MemberStates Amend Investment Treaty so as to Remove ISDS and Limit Protections” IAReporter (20 February 2017) www.iareporter.com/articles/investigation-in-aftermath-of-investor-arbitration-against-lesotho-sadc-member-states-amend-investment-treaty-so-as-to-remove-isds-and-limit-protections/. Accessed 20 June 2019.
- 88.
SADC Protocol on Finance and Investment Art 2.2
- 89.
Agreement Amending Annex 1 (Co-operation on Investment) of the Protocol on Finance and Investment (signed 17 May 2017, not yet entered into force) (Agreement Amending Annex 1) http://www.sadc.int/files/7114/9500/6315/Agreement_Amending_Annex_1_-_Cooperation_on_investment_-_on_the_Protocol_on_Finance__Investment_-_English_-_2016.pdf. Accessed 20 April 2019
- 90.
A very broad interpretation was made by the tribunal in Swissbourgh Diamond Mines (Pty) Limited, Josias Van Zyl, The Josias Van Zyl Family Trust and others v The Kingdom of Lesotho, PCA Case No 2013–29 (First Case), UNCITRAL, Partial Award on Jurisdiction and Merits, 18 April 2016. The award is not published. For more detail see Luke Eric Peterson, “INVESTIGATION: Lesotho is held liable for investment treaty breach arising out of its role in hobbling a regional tribunal that had been hearing expropriation case” IAReporter (14 July 2016) https://www.iareporter.com/articles/investigation-lesotho-is-held-liable-for-investment-treaty-breach-arising-out-of-its-role-in-hobbling-a-regional-tribunal-that-had-been-hearing-expropriation-case/. Accessed 18 April 2019.
- 91.
Agreement Amending Annex 1, Art 25 “Access to Courts and Tribunals”: “State parties shall ensure that investors gave the right of access to the courts, judicial and administrative tribunals, and other authorities competent under the laws of the Host State for redress of their grievance in relation to any matter concerning their investment including but not limited to the right for judicial review of measures relating to expropriation or nationalization and determination of compensation in the event of expropriation or nationalization.”
- 92.
SADC (2012) SADC Model Bilateral Investment Treaty Template with Commentary. www.iisd.org/itn/wp-content/uploads/2012/10/sadc-model-bit-template-final.pdf. Accessed (hereafter: SADC Model BIT)
- 93.
SADC Model BIT (2012), Commentary, 3
- 94.
SADC Model BIT (2012)
- 95.
SADC Model Bilateral Investment Treaty Template with Commentary, Second Edition, June 2017. (Reviewed SADC Model BIT); the instrument is not publicity available (on file with the authors).
- 96.
Reviewed SADC Model BIT (2017), preamble and Art 1
- 97.
Reviewed SADC Model BIT (2017), Art 2
- 98.
A series of obligations have been maintained including investor obligations against corruption (Art 10); compliance with domestic laws (Art 11); obligations on information and transparency with respect to investment contracts (Arts 12 and 18); the obligation to conduct an environmental and social impact assessments (Art 13); other obligations on environmental protection, labor protection, and human rights (Arts 14 and 15); and lastly the obligation to respect corporate governance standards (Art 16).
- 99.
Ibid, Art 5 (1):
“The States Parties shall ensure that their administrative, legislative and judicial processes do not operate in a manner that is manifestly arbitrary or constitutes:
- (a)
denial of justice in criminal, civil or administrative proceedings;
- (b)
un-remedied and egregious violations of due process;
- (c)
targeted discrimination on manifestly unjustified grounds, such as gender, race or religious belief; or,
- (d)
manifestly abusive treatment, such as coercion, duress and harassment and other similar issues.”
- (a)
- 100.
Ibid., Part 2 “Investor Rights Post-Establishment”
- 101.
Ibid., Part 5
- 102.
Ibid., Annex 1 “Investor-State Dispute Settlement”
- 103.
The African Union (AU) is a continental organization consisting of 54 African States (with the exclusion of Morocco). The AU was founded in 2001. Its headquarters are located in Addis Ababa, Ethiopia.
- 104.
Constitutive Act of the African Union (signed 11 July 2000) Art 3 www.achpr.org/instruments/au-constitutive-act/. Accessed 20 June 2019
- 105.
Agreement establishing the African Continental Free Trade Area (AfCFTA) was adopted on 21 March 2018. The agreement is currently open for signature. The text is available at https://au.int/sites/default/files/treaties/36437-treaty-consolidated_text_on_cfta_-_en.pdf. Accessed 20 June 2019.
- 106.
PAIC, Art 1: “The objective of this Code is to promote, facilitate and protect investment that foster the sustainable development of each Member State, and in particular the Member State where the investment is located.”
- 107.
PAIC, Arts 7(3) and 9(3); see, e.g., Art 9(3):
“The concept of “in like circumstances” requires an overall examination, on a case-by-case basis, of all the circumstances of an investment, including, among others:
- (a)
its effects on third persons and the local community;
- (b)
its effects on the local, regional or national environment, the health of the populations, or on the global commons;
- (c)
the sector in which the investor is active;
- (d)
the aim of the measure in question;
- (e)
the regulatory process generally applied in relation to a measure in question;
- (f)
company size; and,
- (g)
other factors directly relating to the investment or investor in relation to the measure in question.”
- (a)
- 108.
PAIC Arts 8 and 10
- 109.
De Brabandere E (2019) Human rights and international investment law. In: Research handbook on foreign direct investment. Edward Elgar Publishing, pp 619–645
- 110.
Vargiu P, Seatzu F (2015) Africanizing bilateral investment treaties (BITs): some case studies and future prospects of a pro-active African approach to international investment. Conn J Int Law 30(2, Spring):143–170
- 111.
Kurtz J (2014) Building legitimacy through interpretation in investor-state arbitration: on consistency, coherence and the identification of applicable law. In: Douglas Z et al (eds) The foundations of international investment law. Bringing theory into practice. Oxford University Press, Oxford, pp 257–296, 262
- 112.
VanDuzer JA (2017) Canadian investment treaties with African countries: what do they tell us about investment treaty making in Africa? J World Invest Trade 18:556–584, 579
- 113.
Morocco-Congo (Brazzaville) BIT, available at https://investmentpolicy.unctad.org/international-investment-agreements/treaty-files/5809/download. Accessed 20 June 2019. Morocco has also concluded a BIT in 2017 with South Sudan, of which the text is not publicly available.
- 114.
UNCTAD (2018) Investment and new industrial policies. United Nations, New York/Geneva, pp 104–115
- 115.
Ibid., p. 107
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Mbengue, M.M., Schacherer, S. (2019). Evolution of International Investment Agreements in Africa: Features and Challenges of Investment Law “Africanization”. In: Chaisse, J., Choukroune, L., Jusoh, S. (eds) Handbook of International Investment Law and Policy. Springer, Singapore. https://doi.org/10.1007/978-981-13-5744-2_77-1
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Evolution of International Investment Agreements in Africa: Features and Challenges of Investment Law “Africanization”- Published:
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DOI: https://doi.org/10.1007/978-981-13-5744-2_77-2
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DOI: https://doi.org/10.1007/978-981-13-5744-2_77-1