A street in Dar es Salaam. The Netherlands has interests in oil and gas in Tanzania. FILE PHOTO | NMG
Tanzania was on Friday racing against time as the deadline for
terminating its 17-year-old Bilateral Investment Treaty with the
Netherlands, which has been viewed as oppressive, drew close.
The
BIT, signed in 2001 and effected in 2004, has been opposed by civil
society lobbies in both Tanzania and the Netherlands as biased towards
the Dutch and not people-centred.
If Tanzania misses
the October 1 deadline to apply for termination, it could be exposed to
legal challenge at international tribunals if it enters into other
investment agreements with other parties, as the pact prohibits Tanzania
from entering into other agreements that may be considered better by
the Dutch and would not change or amend any law or policy that may
affect Dutch investments.
Under this BIT, Dutch
investors are allowed to take the Tanzanian government to the
International Centre for Settlement of Investment Disputes.
Tanzania was expected to file for termination of the BIT by September 28, the last working day before October 1.
“Tanzania
will have to notify The Netherlands by Friday, 28th September 2018,
because it is the last working day,” said Amani Mhinda, executive
director of HakiMadini, one of 10 lobbies that have been pushing for
termination or renegotiation of the BIT.
“If both sides miss the October 1 deadline, we will be stuck
with this treaty until April 1, 2044,” said Dr Burghard Ilge, a senior
policy officer at Both ENDS, a Dutch lobby.
Unlike
other BITs, the Tanzania-Dutch one renews automatically if neither party
issues a notice of intention to terminate or renegotiate at least six
months after its expiry.
While the John Magufuli
administration has been inking bilateral agreements with China and other
economic blocs, it has also reviewed and enacted new laws covering
mining and oil and gas.
These could expose the country
to legal challenges, considering Article 1 of the treaty, which defines
investments as every kind of asset, movable and immovable, property or
claims to money, and any performance having an economic value.
This
means that Dutch investors could even sue Tanzania if they can show
that a measure taken by the country has caused a loss of their brand
value or any other "intangible assets",” said Dr Ilge, adding that not
only does this apply to Dutch companies but also any companies that have
a legal presence in the Netherlands, from where they invest in
Tanzania.
In July this year, eight civil society
lobbies and two from the Netherlands met in Dar es Salaam to review the
BIT and started a campaign for Dar es Salaam to exit.
Mr
Mhinda and Tanzania Law Society programmes manager Stephen Msechu said
they communicated with the government to file a notice before the
deadline, termination of the BIT, but by Friday nothing had been done.
“We know from the Netherlands embassy that Tanzania is yet to send any communication with regard to this,” said Mr Mhinda.
Contacted, Attorney General Dr Adelardus Kilangi only said, “the government is aware about this, don’t worry.”
Research
shows that in case a country loses such a dispute settlement, it will
have to foot the cost which is usually not less than $8 million, and the
remedy paid is not less than $522 million; which is unbearable, said Mr
Mhinda.
The Netherlands has interests in oil and gas
in Tanzania. Shell runs a fully-fledged integrated gas business in
Tanzania. Shell Tanzania’s main assets are two offshore deep-water
blocks (Block 1 & 4) held in partnership with Ophir Energy and
Pavilion Energy. The blocks hold some 16 Trillion Cubic Feet of
recoverable gas. Shell Oil Company is a subsidiary of Royal Dutch Shell.
Another
area of Dutch interest is poultry production. The Netherlands is a
leader in advanced technology in poultry production especially in
hatcheries and control in avian disease.
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