How bilateral investment treaties are hurting Tanzania

Bilateral Investment Disputes Continue to Plague Tanzania

Introduction

Bilateral investment treaties (BITs) have continued to be a thorny problem for the government after another investor filed a civil case at the International Centre for Settlement of Investment Disputes (ICSID).

Case of Australian Company Indiana Resources

Last week, Australian company Indiana Resources won a claim worth $109.5 million (Sh260 billion) against Tanzania after breach of contract on the Ntaka Hill Nickel Project in 2018.

Case of UK Real Estate Developer Pennyroyal Limited

Hardly nine days after that case, UK real estate developer Pennyroyal Limited filed Case Number ARB/23/26 against Tanzania over a terminated lease for an island resort project in Zanzibar.

ICSID Rules and Discussions

According to ICSID rules, the investor was required to submit an intention to open a case, which gives six months of discussions between the government of Tanzania and the investor. If they fail to reach an agreement, then the complainant will submit an application to officially file a case.

Compensation Demanded by Pennyroyal Limited

The owner of Pennyroyal Limited, Mr Brian Malcolm Thomson, is demanding compensation as a result of the decision of the Zanzibar government to terminate the lease contract for 411 hectares for the Luxury Hotel construction Project in the village of Matemwe in Unguja North ‘A’ District.

Government’s Perspective and Advice

The Solicitor General, Dr Boniphace Luhende, stated that discussions can continue while the case is being heard, and even after the case ends, there is still room for discussions. The compensation claimed by the complainant will be known after the session of receiving the document of claims before the panel of judges. Dr Luhende also advised conducting studies to avoid the challenges of such treaties.

Challenges and Pending Cases

According to a data technology specialised company (Tatic), from 1965 to 2019, the government of Tanzania has signed 20 BITs. The government has lost five cases of BITs filed by five different investors. There are also two other pending cases of BITs between Tanzania and Canada as well as one between Tanzania and two British islands.

Expert Opinions

Prof Francis Matambalya, an expert in international trade and investment agreements, highlighted the challenges caused by the lack of a structure for signing such treaties, corruption, and involvement. Independent analyst Ms Roselian Jackson advised the government to review the treaties to reflect changes in global investment needs. She also mentioned that many countries have terminated such treaties due to their ineffectiveness.

Conclusion

Tanzania continues to face challenges with bilateral investment treaties, as more investors file civil cases at ICSID. It is crucial for the government to address these issues and review the existing treaties to align with sustainable development goals and global investment trends.

SDGs, Targets, and Indicators Analysis

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 16: Peace, Justice, and Strong Institutions
• SDG 17: Partnerships for the Goals

The issues highlighted in the article are related to investment disputes and the need for improvements in bilateral investment treaties. These issues align with SDG 16, which focuses on promoting peaceful and inclusive societies, providing access to justice for all, and building effective, accountable, and inclusive institutions at all levels. Additionally, SDG 17 emphasizes the importance of strengthening global partnerships to achieve sustainable development goals.

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 16.3: Promote the rule of law at the national and international levels and ensure equal access to justice for all.
• SDG 16.5: Substantially reduce corruption and bribery in all their forms.
• SDG 17.16: Enhance the global partnership for sustainable development, complemented by multi-stakeholder partnerships that mobilize and share knowledge, expertise, technology, and financial resources.

The article highlights the need for fair and just resolution of investment disputes, which aligns with SDG 16.3. It also mentions the debate surrounding bilateral investment treaties and their potential impact on corruption, which relates to SDG 16.5. Furthermore, the article emphasizes the importance of evaluating and improving these treaties through partnerships and knowledge sharing, supporting SDG 17.16.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Number of investment dispute cases resolved through fair and just legal processes (SDG 16.3)
• Level of corruption and bribery in investment-related activities (SDG 16.5)
• Number of partnerships and knowledge-sharing initiatives aimed at improving bilateral investment treaties (SDG 17.16)

The article does not explicitly mention specific indicators to measure progress towards the identified targets. However, potential indicators could include the number of investment dispute cases resolved through fair legal processes, the level of perceived corruption and bribery in investment-related activities, and the number of partnerships and knowledge-sharing initiatives established to improve bilateral investment treaties.

Table: SDGs, Targets, and Indicators

Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

Source: thecitizen.co.tz

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