Article written

  • on 29.03.2016
  • at 02:53 PM
  • by Kimberley Evans

The Rise of Investor-State Dispute Settlement in the Extractive Sectors 0

GENEVA – African countries have been active in concluding international investment treaties. According to the United Nations Conference on Trade and Development (UNCTAD), as of end 2013, 793 bilateral investment treaties (BITs) have been concluded by African countries, representing 27% of the total number of (BITs) worldwide.

UNCTAD reports as well that several African countries are actively negotiating additional agreements. For example: the Southern African Customs Union is negotiating with India and the East African Community, including Burundi, Kenya, Tanzania, and Uganda, are in discussions with the United States.

Moreover, African countries are increasingly subject to investor-state dispute settlement (ISDS) cases, including claims that challenge the regulatory actions of host countries in a wide range of areas, including public services and race relations. Out of all cases registered under the International Centre for Settlement of Investment Disputes (ICSID), Sub-Saharan Africa accounts for 16% of these cases. In 2014, cases against Sub-Saharan Africa amounted to 20% of the overall number of new cases brought under ICSID during that year.

At the same time, African States have developed the Africa Mining Vision, which is aimed at introducing policy and regulatory frameworks intended to maximize the development of the region through the use of natural resources as catalyst for industrial development in order to diversify the economy. Africa is one of the most important producers of mineral commodities; however most of the minerals are exported in raw form (ores concentrates or metals).

In response, the Africa Mining Vision is intended to promote added-value mechanisms within the region with a view to fully benefiting from the potential of mining. The approach reflected in the Africa Mining Vision is similar to policies several other developing countries have been considering in order to increase their participation on strategic sectors and enhance benefits from resource wealth in order to serve development and industrialization objectives. For example, several Latin American countries, including Ecuador, Bolivia and Venezuela, have applied active policies to regain the States policy space to develop, plan, regulate and actively participate in strategic sectors such as mining, water, energy and telecommunication in order to guarantee the use of natural resources for an economically, environmentally and socially sustainable development of the State.

Since 2006, several African countries, including Ghana, Congo DR, Zambia, Liberia, Zimbabwe, Guinea, Cote d’Ivoire, Malawi, Sierra Leone, Burkina Faso, Kenya, Tanzania and Madagascar have taken actions in terms of regulatory or institutional changes, including amending laws or initiating the renegotiation of contracts with mining firms or indicated an intention to take one or both steps[1]. Graham points out as well that a number of countries are debating approaches to the conception of domestic/local content within the context of the ‘Africa Mining Vision’.

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by  Kinda Mohamadieh and Daniel Uribe

Photo credits: Getty Images

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