African countries are being urged to review and terminate all existing bilateral investment treaties, avoid signing new ones and to also remove themselves from the international investment arbitration system.
According to Nicomedes Kajungu, secretary general of the National Union of Mines and Energy Workers of Tanzania (Numet), the growing number of legal suits that multinational companies are bringing against Tanzania and other African countries is a major concern.
Mr Kajungu told The EastAfrican that most of these suits stem from bilateral investment treaties (BITs) signed between countries over the past three decades.
“So far, African countries have signed 568 BITs and free trade agreements (FTAs) with investment provisions, mainly with other countries outside Africa,” he said.
Mr Kajungu dismissed claims that BITs guaranteed greater foreign direct investment inflows into a country.
“Huge FDI flows have been registered in countries like Brazil which do not have a single BIT in force,” he said.
Numet are calling for an overhaul of the country’s 1997 Investment Act in the wake of a recent order against the government by the International Centre for Settlement of Investment Disputes (ICSID).
Earlier this month, the World Bank-affiliated ICSID ordered Tanzania to pay $185 million to the Hong Kong subsidiary of Standard Chartered Bank for breaching an energy contract