By Waziri Isa Adam (Group Editor-in-chief)
The Emeritus Director General of Nigerian Institute of Advanced Legal Studies (NIALS), Professor Muhammed Tawfiq Ladan, has emphasized the need to balance investment protection with sustainable development in investment treaty reform.
The renowned African Regional Economic Integration Law and Policy Analyst made the call while commenting at the United Nation High level policy expert conference on the Reform of the International Investment Agreements for sustainable development, organized by the UN Conference on Trade and Development (UNCTAD) based in Geneva, on Thursday, 12 December, 2024.
According to Prof. Ladan, “over the past decades, new and emerging issues such as environmental protection, climate change, labour rights, public health, host communities’ rights, and the encouragement of responsible and inclusive investment have started to be addressed in International Investment Agreements (IIAs)”.
The Hubert Humphrey Fellow, USA, explained that “new generation regional IIAs are starting to form building blocks towards widespread consensus on addressing the economic, social, and environmental dimensions of investment governance.”
“This is necessary because almost nine out of ten IIAs in force as at December 2024, were signed before 2012. The piecemeal approach of IIA reform, relying on bilateral renegotiations and amendments, is relatively slow.”
Prof. Ladan showcased the reform initiative introduced by the AfCFTA Protocol on Investment adopted on 19th February 2023 by the African Union of Heads of State in Addis Ababa, Ethiopia.
“The promotion, facilitation, protection and retention of investments that foster sustainable development; Promote and protect intra-African investment in the free trade area, and to harmonize co-existing national, bilateral and investment laws on the continent.”
“Notably, the 173 existing Bilateral Investment Treaties (BITs) between member states will be terminated and replaced by the Protocol in one of a number of significant reforms.”
“In addition, 48 member States out of 54 signatories to the AfCFTA Agreement will align their investment laws, regulations and policies with the Protocol within 5 years of entry into force. Similarly, the 8 Regional Economic Communities, such as ECOWAS, EAC, COMESA and SADC, will bring their investment Codes / treaties in alignment with the Protocol within 5-10 years of entry into force.”
“Furthermore, the Protocol will form the basis for African countries’ investment treaty engagement with third-party countries outside of Africa.”
“Balance the rights and obligations of States and investors, by providing Africa with a clear set of guidelines and principles to expedite financing and investments across the continent.”
“Ensure compliance with labour, human rights, environmental and public health standards in investment treaties.”
“Particularly innovative features include: – the replacement of the “fair and Equitable Treatment” (FET) with “Administrative and Judicial Treatment” (AJT), the Protocol’s approach to environmental protection, a greater balance between State and investor rights and obligations as well as the possibility for States to bring counter-claims against investors.”
Professor Ladan noted that “both the Nigeria-Morocco 2016-17 Bilateral Investment Treaty (BIT) and the recently concluded November 2024 France – Nigeria and Nigeria-South Africa (BITs) on mining critical solid minerals captured the best practice in balancing investment protection with sustainable development as a strategic national interests and overall reform initiative of IIAs consistent with the AfCFTA Protocol on Investment.”
“Effective investment governance can help to: – promote market integrity and financial stability, by preventing fraud, manipulation, and misconduct or corruption and abuse of office; encourage responsible investment practices such as considering environmental, social and governance factors.”
“Support the realization of the sustainable development goals (SDGs 1-17) by encouraging investments that contribute to the well-being of Citizens, protect the environment, reduce Carbon emissions to protect the climate against harm, alleviate poverty, and provide education and energy access for all.”
“Implement public policies related to trade, investment, taxes, and other regulatory issues to reduce inequality and promote sustainable development.”he stressed.