REDEFINING INVESTMENT DISPUTE RESOLUTION MECHANISMS IN THE AFCFTA: ADDRESSING AFRICAN CONCERNS AND PROMOTING INTRA-AFRICAN INVESTMENT.

Abstract

On the 7th of July 2019, African Leaders marked the launch of the operational phase of the African Continental Free Trade Agreement (AfCFTA). Among its main objectives, this Agreement aims to contribute to the movement of capital and to facilitate investment building on the initiatives and developments in the State Parties and Regional Economic Communities (RECs). It also seeks to resolve the challenges of multiple and overlapping membership to RECs, with the overall goal of enhancing and deepening greater regional integration. The upcoming drafting of an Investment Protocol under the Protocol presents an apt opportunity for the Continent to address the concerns of many African States with the Current Investor State Dispute System (ISDS) which is centred on international arbitration most frequently under the auspices of ICSID. Although globally there has been growing dissatisfaction with this system, the arguments of African States against it are nuanced to their overall weaker economic positions in the global economy. It is the view of many African States and the Global South at large that this system presents extensive costs which have led to regulatory chill particularly in environmental matters, that the system lacks African representation and finally that the power imbalance fostered is in favour of investors against States. Such discontent has been signalled over the past decade by a trend by both individual States and RECs to withdraw from this system in favour of the resolution of investment disputes at National levels. This has resulted in a mirage of investment dispute resolution laws on the Continent coupled by several regional dispute resolution principles under the RECs, which do not always correspond or complement one another. Recognising that a clear investor protection regime and more particularly a clearly delineated and trusted dispute resolution mechanism is significantly influential towards the attraction of Foreign Direct Investment (FDI), this research will ascertain how the continent through the adoption of a binding Investment Protocol can address the concerns of Member States with the current ISDS system without compromising investor security. This will be achieved through a study of the lessons of the RECs in addressing this problem and reconciling the experiences of the RECs with the leading proposals from African 5 scholars. In a final analysis a plausible model for the harmonisation of Investor-State Dispute Resolution for the continent will be forwarded.