Legitimate Regulatory Acts of States Under International Investment Law: A Scrutiny of Ethiopia’s Bilateral Investment Treaties

Abstract

While host states interest in concluding BITs is to have the BIT that incorporates terms that empower them to effectively regulate foreign investments situated in them, the home states interest on the other hand is to limit the regulatory power of host states over their investments situated abroad even up to taking away the inherent sovereign power of the host states of protecting their essential security interests. International investment agreements in general, and bilateral investment treaties in particular, very often disregard the interests of host states in favor of home states, since bargaining power of the countries are highly essential in negotiating the agreements. Ethiopia is one among the least developed countries of the world and parties to many bilateral investment treaties with various countries across the globe. A systematic analysis into the terms of all BITs concluded by Ethiopia reveals a serious issue of not uniformly incorporating terms that will allow the government of the country to exercise its legitimate regulatory powers and interests. This thesis analyzes BITs concluded by Ethiopia in line of their regulation of its legitimate regulatory powers the country with the objective of addressing three main questions; how the contemporary international investment agreements strike balance between the foreign investor need of protection for their investments and host countries power of exercising their regulatory powers/ interests? How BITs concluded by Ethiopia accommodate the sovereign power of the regulatory space of the country without violating the BIT obligations entered into? And finally, how other countries regulate their regulatory space in line with their BIT obligations they concluded with other countries? This thesis uses comparative doctrinal research methodology to analyze all Ethiopian BITs and laws with different literatures and some countries Model BITs concerning the host states’ regulatory space, the thesis concludes that the majority of Ethiopian BITs do not adequately protect the legitimate regulatory powers, hence, the study forwards recommendations for the country to terminate most of its BITs that do not recognize the state’s inherent power to protect its essential regulatory interests, and to adopt a Model BIT with which it will negotiate its future BITs