Foreign investments in SADC are regulated by Annex 1 of the SADC Protocol on
Finance and Investments (SADC FIP), as well as the laws of SADC Member States. At
present, SADC faces the challenge that this regime for the regulation of foreign
investments is unstable, unsatisfactory and unpredictable. Furthermore, the state of the
rule of law in some SADC Member States is unsatisfactory. This negatively affects the
security of foreign investments regulated by this regime. The main reasons for this state
of affairs are briefly explained below.
The regulatory regime for foreign investments in SADC is unstable, due to recent policy
reviews and amendments of key regulatory instruments that have taken place. Major
developments in this regard have been the suspension of the SADC Tribunal during
2010, the amendment of the SADC Tribunal Protocol during 2014 to bar natural and
legal persons from access to the Tribunal, and the amendment of Annex 1 during 2016
to remove investor access to international investor-state arbitration, better known as
investor-state dispute settlement (ISDS).
The regulation of foreign investments in SADC has been unsatisfactory, among others
because some SADC Member States have failed or neglected to harmonise their
investment laws with both the 2006 and the 2016 Annex 1. Furthermore, SADC Member
States such as Angola, Democratic Republic of Congo (DRC), Malawi, Mauritius,
Seychelles, Eswatini, Tanzania, Zambia, and Zimbabwe have multiple Regional
Economic Community (REC) memberships. This places these Member States in a
position whereby they have conflicting interests and treaty obligations.
Finally, the future of the regime for the regulation of foreign investments in SADC is
unpredictable, due to regional integration efforts such as the recent formation of the
COMESA-EAC-SADC Tripartite Free Zone (T-FTA) and the African Continental Free
Trade Area (AfCFTA). The T-FTA is entitled to have its investment protocol, while the
AfCFTA investment protocol will be negotiated from 2018 until 2020. These
developments entail that the 2016 Annex 1 will soon be replaced by an investment
protocol at either the T-FTA or AfCFTA levels, thereby ushering a new regime for the
regulation of foreign investments in SADC. The unknown nature of the future regulations
create uncertainty and instability among foreign investors and host states alike.
This study analyses the regulation of foreign investments in terms of Annex 1 and
selected laws of SADC Member States. In the end, it makes the three findings
mentioned above. In order to address these findings, the study makes four
recommendations. The first is that foreign investments in SADC must be regulated at
African Union (AU) level, by means of an AfCFTA investment protocol (which incidentally
is now the case). Secondly, investor-state disputes must be referred to the courts of a
host state, optional ISDS, the African Court of Justice and Human Rights (ACJ&HR) or
other agreed forum. Thirdly, an African Justice Scoreboard (AJS) must be established.
The AJS will act as a gateway to determine whether an investor-state dispute shall be referred to the courts of a host state, ISDS, the ACJ&HR or other forums. Fourthly, the
office of an African Investment Ombud (AIO) must be created. The AIO shall facilitate
the early resolution of investor-state disputes, so as to reduce the number of disputes
that may end-up in litigation or arbitration. / Mercantile Law / LL. D.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:unisa/oai:uir.unisa.ac.za:10500/25054 |
| Date | 04 1900 |
| Creators | Ngobeni, Tinyiko Lawrence |
| Contributors | Fagbayibo, B. O. |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis |
| Format | 1 online resource (xviii, 392 leaves) |
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