Abstract:
Safeguarding the right to regulate foreign investments for legitimate public policy objectives such as the protection of public health from NCDs has recently emerged as a „sine qua non‟ of IIAs as the agreements via broadly formulated treatment standards encroaching on this fundamental right of sovereign States. The formulation of the FET standard and (indirect) expropriation provisions of Ethiopian BITs, as they are the leading alleged breaches against government regulatory measures with a significant success rate in favor of investors, and their potential impediment on Ethiopia‟s regulatory autonomy for public health concerns, particularly concerning NCDs is the focus area of this study. This work also aims to study the best procedural approach to inculcate upgraded regulatory-friendly BIT provisions to Ethiopian BITs. Through qualitative doctrinal analysis, this work finds that the formulation of the two standards of treatment provisions under Ethiopian BITs is broad and vague enough to encroach to and limit Ethiopia‟s regulatory autonomy for the regulation of NCDs risks factors as per its policy objectives and national and international obligations. As the arbitral jurisprudence depicts, the broadly formulated provisions that do not clarify the specific elements and scope of protection result in inconsistent and unpredictable tribunals‟ interpretation. The treatment standards under Ethiopian BITs need to be clarified, considering the emerging treaty drafting experiences of other states to ensure predictability and certainty to avoid possible adverse effect on the regulation of NCDs risk factors and the general right to regulate. Accordingly, the FET provisions should be meticulously formulated by providing an exhaustive list of state obligations and delimiting the application of investors‟ legitimate expectations. The (indirect) expropriation provisions should contour a distinguishing line between indirect expropriation and legitimate non-compensable regulations providing an absolute public health carve-out that underlines the NCDs‟ concerns. Further, the study divulges the best possible alternative approaches to incorporate redrafted BIT provisions that safeguard regulatory autonomy into existing BITs based on pertinent BIT provisions and Ethiopia‟s entire BIT system. The alternative approaches are analyzed based on a qualitative analysis of the pertinent provisions of Ethiopian BITs, interviews with relevant personnel, the entire BIT system of the country, and other jurisdictions experiences employing appropriate legal reasoning techniques. It finds that jointly interpreting or amending the provisions is the best alternative approach for the Ethiopian BITs context, considering their efficacy and procedural easiness. For long term effect, a resort to renegotiation to replace the existing BITs would be significant.
