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Issue No. 0933
December 10 - 16, 2016

Local News

Call for strong law to confront multinationals in arbitrations cases

By Adam Ihucha


Tanzania needs a strong base of its laws for it to successfully confront multinationals in arbitrations cases, upcoming lawyers have been told.

Otherwise, the State’s attempts to protect its public interests against environmental and other harms  that multinationals cause will not hold water.  They were cautioned during a post-graduate seminar at Tumaini University Makumira (Tuma) on the outskirts of Arusha. 

The country has through Tanzania Electric Supply Company Limited (TANESCO) been a victim of the International Investment Law and treaties as it has on several occasions failed in arbitration cases. 

The World Bank tribunal recently ordered the power utility to pay Standard Chartered Bank – Hong Kong Us$148.4 million (over Sh320 billion) in a legal dispute with the Independent Power Tanzania Limited. 

Dr Cathal Doyle, a senior lecturer and researcher with Middlesex School of Law in the United Kingdom said interpretation of arbitration cases was too broad for weak laws mostly of developing countries to win cases against overseas corporations.

He said the International Investment law and treaties were firmly established to protect foreign direct investments even when the multinationals apparently violated basic human rights.

The State’s right to regulate its public interests after it had entered into an agreement with a multinational often was watered down, he said. 

International legal investment instruments compelled states to protect multinationals using their militaries throughout the period of the contracts which, he said, were often shrouded in great secrecy. 

Dr Doyle cited a case of a Spanish firm disposing of wastes in Mexico, prompting members of the community surrounding it to protest and the State to enact legislation against the environmental harm caused.

The State declined to renew a contract with the investor, pending compliance to the new law, yet the firm won an arbitration case and was awarded millions of dollars in compensation, he explained.

Dr Daniel Pallangyo from Tuma concurred with him, saying it was time the International Investment Law helped vulnerable Africans in strengthening their weak domestic legislations.

In another development, Dr Duncan Ojwang from the University of Nairobi lashed out at African researchers, saying they were sustaining the western power by perpetuating the colonial knowledge without critiquing it.

“Most of the local researches are steered by funding at the expense of academic freedom, as international development agencies control the agenda and curricula,” Dr Ojwang said.

He said academic freedom was about responsibility to the society and that knowledge ought to be grounded on culture, norms and values for it to liberate the people.

“You should be producers of knowledge, not consumers only,” he urged the upcoming lawyers, observing: “Our knowledge is not resolving problems of our society; we’ve been cornered and defeated.”

He wondered that Africa produced barely 3 per cent of the world knowledge of which Nigeria and South Africa alone commanded 2 per cent.

“Think of decolonising your society,” urged Dr Ojwang, as he wondered the motive behind colonial regimes replacing barter trade with currencies which could not be compared as was the case with commodities.

“As a result, tea is cheaper than technology today, thanks to what they call market forces,” he quipped. The theme of the seminar was International Trade and Developing Countries: How African can advance their Continent’s Agenda through Research.


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