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Tanzania risks legal action in international courts over its recent investment and tax policies, which the parties to the Bilateral Investment Treaty (ILO) regard as anti – trade.
Tanzania is among the signatories of the BIT with developed countries special protection of enterprises through a dispute settlement mechanism that allows them to seek compensation when new regulations or policies threaten their profits.
The treaty does not provide for a regular review of issues affecting profitability. If it is not set to be reviewed before October 1, 2018, it will be automatically renewed for another ten years, as provided for in Article 14.
According to observers, the problems will probably come from the Netherlands.
Civil society organizations argue for a review of the BIT between Tanzania and the Netherlands, which they say does not serve Tanzania's interests.
Both, a Dutch organization, is associated with southern and eastern Africa. HakiMadini from Tanzania and Diakonia to put pressure on policymakers in Tanzania to influence the revision of the treaty.
The lobbies want a reformulation of the treaty to make explicit that the promotion of investment and protection will be pursued to the extent that it supports local development and not at the expense of key national development goals and of public interest such as health, environment, human rights, freedom of consumer protection, fight against corruption, consumer rights and promotion of internationally recognized rights such as labor rights.
They want the preamble of the treaty to affirm the right of the state to introduce new rules and regulations on investment.
"It should also include an objective that captures the measurable and visible parameters of sustainable development that the investment is intended to influence.The objective of the Treaty may be:
"Encourage and increase investment between investors from one State Party in the territory of the other State Party who support employment, technology and skills transfer, synergies with local businesses and, finally,, contributes to the reduction of poverty in the host country in a sustainable manner, "reads in a joint analysis of the disputed provisions of the treaty.
The definition of the company of investment reduces the risk of attracting opportunistic foreign investments.
Such investments normally have a minimal positive effect on the host economy, as they do not create a link s long-term with local production sectors.
The proposed definition increases the likelihood of attracting long-term investments that are more likely to support host country development aspirations. Speaking in a panel that unveiled investment models and their implications for developing countries, BothENDS 'Burghard Ilge said that in the current BIT framework, companies can pursue governments for vague reasons.
International Arbitration
Corporations are permitted to circumvent national courts and to go directly to private international arbitration tribunals such as the United States. International Dispute Settlement Center of the World Bank. Investment Disputes The London Tribunal for International Arbitration and the International Chambers of Commerce in Paris, where cases are heard behind closed doors by a panel of three commercial lawyers.
Tanzania and the Netherlands signed the Agreement on the Encouragement and Reciprocal Protection of Investments, which entered into force on 1 April 2004 and is valid for 15 years up to the month from April to next year. [19659002] Article 14, paragraph 2, of the Agreement provides that, unless denounced or re-examined by Tanzania or the Netherlands at least six months before the date of expiry of its validity, the agreement will tacitly be tacitly renewed
"In accordance with this provision, notification by both parties, Tanzania or the Netherlands, must be made by 1 October 2018, at which time the agreement will be automatically renewed.
Allow the Tanzanian government and its people to redefine the kind of bilateral investment partnership that they would like to have with the Netherlands ", explains the campaign against the BIT
The resolution concluded that the BIT between Dar es Salaam and Amsterdam has been overtaken by events and is likely to affect Tanzania if it is not called upon to to be re-examined.
Mr. Ilge gave a example of Burkina Faso. Local NGOs have argued to the government that these BITs should be revised before they are extended and meet the real needs of the country.
The NGO consortium also called for harmonization of negotiations with investors coming to East Africa.
EAC partner states are currently preparing an EAC investment model that emphasizes the need for a common ground with investors.
Jane Nalunga, Director of Seatini Uganda, called the EAC countries to "We are negotiating as hungry people," she said, adding that people should be at the center of the crisis .
John-Bosco Kanyangoga, a Kigali-based trade and investment consultant, warned that the absence of real bargaining was a sine qua non of negotiation. the framework leads governments to settle for fewer agreements, neglecting the needs of the population and important issues, including human rights and the environment.
Tanzania has signed 18 BITs for investment protection, including 11 with Canada, China, Denmark, the United Kingdom, the Netherlands, Finland, Germany, Italy, Mauritius, Sweden and Switzerland in force.
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