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NGO says east African countries losing millions of dollars to multinational corporations due to unfavourable bilateral investment treaties

"Civil society seeks reforms to stem trade suits losses"

Africa is getting the short end of the stick when it comes to bilateral investment treaties, losing millions of dollars from legal suits by multinationals. Civil society groups under the banner of the Southern and Eastern Africa Trade Information and Negotiations Institute (Seatini) are now calling on governments to reform their investor state dispute settlement because “it is being unfairly used by investors to sue states for millions of dollars.” 

The Seatini activists were in Arusha on December 2, to lobby the Committee on Communication, Trade and Investment of the East African Legislative Assembly on trade matters skewed against African countries. Tied to the ISDS is the bilateral investments treaty, which the activists also want the East African Legislative Assembly to review and realign to the EAC Model Investment Treaty and the United Nationals Guiding principles, as approved in February 2016 by the EAC Sectoral Council on Trade, Industry and Investment to guide partner states in negotiating investment treaties with third parties. Expert estimates since 1993 say Africa’s loss from legal claims by investors is $55.5 billion, and that this figure could double as these were limited to the amounts claimed by investors in only 54.7 per cent of the cases. The civil society groups cited are the bilateral investment treaties; investor state dispute settlement, public private partnerships and lack of legally binding instruments on business and human rights...

Seatini raised the issue of Tanzania. In a document seen by The EastAfrican, legal suits against Tanzania have been brought on by efforts by the government to undertake reforms in its mining sector with a view to increasing the government’s stake and profitable returns for the country from its natural resources. “Among the EAC partner states, the United Republic of Tanzania has remained the most targeted, owing to its large mining sector in which 28 per cent of the country’s foreign direct investment goes to this sector,” the document says.