Dar faces legal suit at international tribunals over tax, investment policies
Tanzania is among signatories to the BIT with developed countries which offers companies special protection through a dispute settlement mechanism that allows them to sue for compensation when new regulations or policies threaten their profits.
The treaty does not provide for regular reviews of issues that affect profitability. If not called for review by October 1, 2018, it will be automatically renewed for another 10 years as provided for under Article 14.
Civil society organisations are pushing for the review of the BIT between Tanzania and The Netherlands which they say does not serve the best interests of Tanzania.
The lobbies want a rewording of the treaty to make it explicit that the intended investment promotion and protection will be pursued to the extent that it supports local development and not at the expense of key domestic development goals and public interest such as health, environment, human-rights, consumer protection, anti-corruption, consumer rights and the promotion of internationally recognised rights such as labour rights.
‘To encourage and increase investments between investors of one state party into the territory of the other state party that supports employment, technology and skills transfer, synergises with local firms and, ultimately, contribute to poverty reduction in the host country in a sustainable way’,” reads a joint analysis of the contentious provisions of the treaty.
Companies are allowed to bypass national courts and go directly to private international arbitration tribunals such as the World Bank’s International Centre for the Settlement of Investment Disputes the London Court 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. No independent judges are involved.
Article 14 (2), of the agreement provides that unless notice of termination or review has been given by either Tanzania or Netherlands at least six months before the date of the expiry of its validity, the agreement shall be automatically extended tacitly for 10 years.
Renegotiating the agreement will allow the Tanzanian government and its people to redefine the kind of bilateral investment partnership they would wish to have with the Netherlands,” says the campaign against the BIT.
The joint resolution has concluded that the BIT between Dar es Salaam and Amsterdam has been overtaken by events and is likely to impact Tanzania if it is not called for review.
Mr Ilge gave an example of Burkina Faso, where BothENDS and other local NGOs pleaded with the government to review such BITs before they were extended and address the real needs of the country.
“We negotiate as hungry people,” she said, adding that the people should be at the centre of investments and have a voice to address their expectations and priorities, “apart from creation of employment and tax revenue.”
John-Bosco Kanyangoga, a Kigali-based trade and investment consultant warned that the lack of a proper negotiation framework leads governments to settle for less in deals, neglecting the needs of the people and issues that matter including human-rights and the environment.