A New Model Bilateral Investment Treaty for African States | Vinson & Elkins LLP

On July 12, 2022, the African Arbitration Academy (AAA)1 launched the Bilateral Investment Treaty (BIT) for African States (AAA BIT model). The Model AAA BIT seeks to balance two objectives: the attraction of foreign direct investment (FDI) to African states and the promotion of sustainable development and is intended to serve as a source of cohesion for African states with respect to their investor-state dispute settlement. (ISDS) reform strategies and promote the codification of African states’ investment policies and laws. And that’s good, the continent is experiencing a strong rebound following COVID-19, FDI to African countries reached a record $ 83 billion in 2021 according to the UNCTAD World Investment Report 2022.

Prepared by an Editorial Board and a Technical Review Board, brought together from a diverse group of seasoned arbitration practitioners and investment law experts from Africa and beyond, the Model BIT AAA aims to provide useful guidance to African governments and institutions involved in the negotiation of BITs in seeking to balance rights and obligations between states and investors.

The Model AAA BIT recognizes and reaffirms the right of state parties to regulate and introduce new measures relating to investments in their territories in order to achieve national policy objectives in accordance with established principles of international law.

Ubuntu

The drafters of the Model AAA BIT chose the overriding principle of the Model Treaty, as set out in Article 1, an African principle – namely that of Ubuntu which is derived from the popular African idiom “Umuntu ngumuntu nga Bantu” literally translated as “a person is a person because of what other members of the community have done for him” and “…grants respect for human dignity and equality to all persons, regardless of their status in the community sense…”.

The very definition of “Investor” in the Model AAA BIT, which limits the scope of the Agreement, provides that an “Investor” for the purposes of the Agreement undertakes to apply the Ubuntu principle in its relations with indigenous communities/nationals in the territory of the host State where the investment is located/operated; nationals of the Host State and of any Third State or nationals of such Third State who are adjacent to or affected by the Investment in the Host State.

In accordance with the general principle of Ubuntuthe AAA Model BIT goal of improving “Sustainable development2the protection of human rights3 and the importance of environmental protection4 in Africa are presented throughout the BIT model.

The model BIT also contains specific provisions regarding:

  1. the protection of collective intellectual property rights, traditional knowledge and traditional cultural expressions of indigenous peoples and local/ethnic communities5; and
  2. recognition of the role of gender equality asa crucial factor in achieving economic growth and development6. With regard to the latter, the BIT Model AAA provides Contracting States with “should ensure that the implementation of this Agreement does not create any obstacles which may impede the ability of women and other disadvantaged groups to participate effectively in the economies concerned”.

It remains to be seen whether the Model AAA BIT will become a new model for investment treaties entered into by African states. It’s a welcome contribution to the ISDS space, and we at Vinson & Elkins are particularly proud of it because one of our associates, Ilham Kabbouri, served on the editorial board.

The aforementioned elements are just some of the most remarkable and distinctive features of this new instrument. The AAA BIT model, available in English, French, Portuguese and Arabic, can be downloaded here.

1 The AAA was established to meet the growing demand for improved expertise and training from arbitration practitioners in Africa and to expose young African practitioners to current trends and developments in international commercial and investment arbitration.

2 See the preamble, the explanatory note on the definition of investment, article 3 (Promotion of investments), article 4 (Standards of non-discrimination), article 17 (Rights of States to regulate) and l Article 18 (Corporate Social Responsibility).

3 See in particular Article 10 (Work, protection of human rights and gender equality), paragraphs 1-4.

4 See in particular Article 9 (Environment) which reflects global good practice in environmental management and the incorporation of environmental management systems which can help to ensure that not only national environmental laws are effectively respected, but also go beyond that to require an evaluation. , diligence and continuous improvement of the environment.

5 See in particular Article 11 (Intellectual property and the rights and resources of indigenous peoples/communities), section B.

6 See in particular Article 10 (Work, protection of human rights and gender equality), paragraph 5.

Comments are closed.