Tanzania starts re-evaluating bilateral investment treaties  

DAR ES SALAAM: RE-EVALUATING Tanzania’s bilateral investment treaties (BITs) has been proposed as a necessary step to safeguard national interests and restore balance in foreign investor relations.

 Stakeholders have expressed concern that existing treaties limit the country’s ability to enforce its laws, especially in critical sectors such as labor rights, public health, and environmental protection.

Dr. Jacktone Koyugi, a lecturer at the University of Dar es Salaam’s Faculty of Law, highlighted these concerns during the Switzerland–Tanzania Chamber of Commerce forum, pointing out specific loopholes in the investment treaties that grant foreign investors rights such as suing the Tanzanian government while offering Tanzania no reciprocal powers.

He warned that such arrangements contribute to a win-lose situation, heavily favoring investors while Tanzania bears the policy and financial burdens.

He also criticized the lack of obligations for foreign companies, particularly Swiss investors, to contribute through Corporate Social Responsibility (CSR) initiatives like building schools or hospitals.

The principle of “Fair and Equitable Treatment,” Koyugi noted, can delay national development by requiring Tanzania to align its laws with international standards before taking sovereign decisions.

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Speaking during the same forum, Dr. Bernd Ehle, a partner at Geneva-based law firm LaLive and co-founder of the Switzerland-Tanzania Chamber of Commerce, emphasized the importance of arbitration as a tool for resolving commercial disputes. “Arbitration is not an evil; it is a necessary mechanism that, when handled efficiently, builds investor confidence,” he said.

Dr. Ehle stressed the need for building local capacity among judges, lawyers, and business leaders to conduct professional arbitration proceedings, noting that efficient dispute resolution is essential for attracting quality investments.

Also contributing to the discussion, Madeline Kimei President of the Tanzania Institute of Arbitrators, highlighted the untapped potential of Tanzania as a regional hub for arbitration.

She underscored the importance of the Arbitration Act of 2021 and called for reforms that include establishing both national and international arbitration centers.

Kimei emphasized the role of private mediators and a robust legal framework in expanding access to justice and supporting foreign direct investment (FDI). “Alternative Dispute Resolution (ADR), including mediation and arbitration, plays a pivotal role in improving the business environment and fostering economic growth,” she noted.

The conference concluded with a united call for government-led reforms to strengthen Tanzania’s position in international agreements, enhance its dispute resolution infrastructure, and ensure that investment treaties promote mutual benefit.