Volume: Volume 19 - 2015

Article type: Refereed article

Author/s: Ngobeni, Lawrence; Fagbayibo, Babatunde

As a critical element of enhancing the investment climate in Southern Africa, the Southern African Development Community (SADC) Protocol on Finance and Investment (FIP) requires Member States to harmonise their investment policies, laws and practices with its provisions, with the objective of creating a SADC investment zone. The FIP was signed on 18 August 2006, and came into effect on 16 April 2010. A key issue is the extent of progress that has been made by SADC Member States towards the harmonisation of their policies, laws, and practices in accordance with the FIP. At present, there exist major differences between the investment policies, laws and practices of SADC Member States. A case in point is the resolution of investment disputes, in respect of which the Protocol provides for the mandatory international arbitration of investment disputes after the exhaustion of local remedies. In 2012, the SADC introduced the Model Bilateral Investment Treaty Template (the Model BIT), with a view to further foster the harmonisation of investment laws and practice. However, the FIP and the Model BIT differ significantly, with major implications for harmonisation. Probably due to this and other reasons, the FIP is in the process of being amended, although details around this are not yet final or public. It is against this background that this article intends to examine, and make policy proposals on, the prospects of the harmonisation of the investment policies, laws and practices of SADC Member States in accordance with the FIP, in so far as they relate to the Investor-State Dispute Resolution Forum.

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