Re-thinking Ethiopia’s bilateral investment treaties with particular emphasis on standards of national treatment and its implications on domestic investors

Abstract

National treatment standard is one of the relative standards that are used in international practice to secure a certain level of treatment for FDI in host countries. The very essence of this research is examining the Ethiopia’s Bilateral Investment Treaties particularly emphasizing on Standards of National Treatment and Its Implications on Domestic Investors. This study is fully employed doctrinal type and accordingly, primary and secondary sources, mainlylegal documents, Bilateral Investment treaties including domestic Investment laws were analyzed in detail. As collected data shows until 2015, Ethiopia has signed 29 BITs with other countries, among which the following Ethio-BITs were purposively selected. Accordingly, Austria,Algeria, Finland, UK, Germany, China, Malaysia, Kuwait, Israel, including Libya BITs extensively analyzed in this paper. As the result of the study, in these Bilateral Investment Treaties, it were found that, the scope of National Treatment Clauses were generally Crafted and /or vague which could have a far reaching implications on Domestic Investors. Based on the analyses conducted, Ethio-BITs failed to inculcate the NT clauses with appropriate comparator against which to measure the allegedly less favorable treatment, which most of the time crafted by the expression of like circumstances or situations. As opposed to domestic investors, foreign investors and investments claim every positive National treatment accorded to domestic one, regardless of actually making operation within a similar sector. Consequently, this would have negative implication to domestic investors. Except Ethio-Esrael BIT, the general nature of Ethio- BITs is further implied by the failure to maintain regulatory exceptions in a way to provide privileges to domestic investors. As a result of this, the finding has shown that, the Ethio-BITs has not consistent with domestic investment laws, since currently Ethiopia has retained larger regulatory power in investment, in effect the generality of NT clauses might eventually shorten, the hand of the government to assist the domestic investors. Therefore, depending on the finding of the study, this paper recommends that, to strike the balance of interests, mainly foreign and domestic investors, the Ethiopian government should re-think towards the making of BITs to become consistent with domestic investment laws through avoiding the generality of Ethio-BITsNT clauses.