AfCFTA - Protocol to the Agreement Establishing the African Continental Free Trade Area on Investment - Draft - January 2023
We, Member States of the African Union,
RECALLING Decision Ext/Assembly/AU/Dec.1(X) of the Assembly of Heads of State and Government during its 10th Extraordinary Session held in Kigali, Rwanda, on 21 March 2018 adopting the Agreement Establishing the African Continental Free Trade Area;
DESIRING to strengthen the bonds of friendship and cooperation between African nations;
REAFFIRMING the African Union's vision for Agenda 2063 of an integrated, prosperous, and peaceful Africa driven by its own citizens and representing a dynamic force in the international arena;
PURSUANT to the objectives and principles of the Agreement Establishing the African Continental Free Trade Area signed at Kigali, Rwanda on 21 March 2018;
TAKING INTO ACCOUNT Article 7 of the Agreement Establishing the African Continental Free Trade Area which requires State Parties to enter into Phase II negotiations in respect of, among other areas, investment;
MINDFUL of best practices incorporated in the Pan-African Investment Code, the investment instruments of the Regional Economic Communities, bilateral investment treaties concluded by African States, national investment laws as well as other relevant international investment instruments and agreements;
DETERMINED to establish a balanced, coherent, clear, transparent, predictable and mutually- advantageous continental framework of principles and rules for investment promotion, facilitation and protection;
MINDFUL of the different levels of development of the State Parties and the challenges they may face in the adoption and implementation of this Protocol and other related investment policies;
RECALLING the 2030 Agenda for Sustainable Development, as contained in Resolution A/RES/70/1 of the United Nations General Assembly, and in particular the 17 Sustainable Development Goals;
TAKING INTO ACCOUNT the Investment Policy Framework for Sustainable Development of the United Nations Conference on Trade and Development (UNCTAD) and other relevant UNCTAD instruments that support new generation investment policies for inclusive growth and sustainable development;
COGNISANT of the increasing importance of trade and investment for the inclusive growth and industrial development of Africa, and the role played by the private sector in expanding productive capacity, creating jobs, facilitating transfer of technology as well as building regional, continental and global value chains;
RECOGNISING the significant contribution investment can make to the sustainable development of the State Parties, including the reduction of poverty, and the furtherance of investment-related human rights and human development while understanding that sustainable development requires the fulfilment of its economic, social and environmental pillars;
MINDFUL of the necessity of retaining, and expanding intra-African investment to increase economic resilience, and enable diversification in furtherance of achieving sustainable development in Africa;
DESIRING to establish within State Parties an overall attractive investment climate conducive to the development of a more vibrant and dynamic private sector that encourages mutually beneficial partnerships;
SEEKING to create a framework for investment cooperation and facilitation and for the prevention of investment disputes;
AFFIRMING the desire to promote accountability, good governance and responsible business conduct in a fair, transparent and predictable investment environment;
SEEKING to achieve an overall balance of the rights and obligations between State Parties and investors under this Protocol;
REAFFIRMING the inherent right of State Parties to regulate in their territories and to introduce measures in order to achieve their national public policy objectives, promote sustainable development objectives and protect legitimate public welfare objectives, such as public health, national security, the environment, the conservation of living and non-living exhaustible natural resources, labour standards, the integrity and stability of the financial system and public morals;
RECOGNISING the importance of encouraging investment activities that benefit economically disadvantaged areas, small and medium-sized enterprises, local communities, indigenous peoples, and underrepresented groups, including women and youth;
DESIRING to increase the share of African countries in global flows of foreign direct investment and to benefit from it in accordance with the objectives set out in this Protocol;
TAKING INTO ACCOUNT the relevant obligations of State Parties under international law and international agreements to which they are parties;
HAVE AGREED AS FOLLOWS:
CHAPTER 7 - MANAGEMENT AND SETTLEMENT OF DISPUTES
Article 44 - State-State Dispute Settlement
1. The relevant provisions of the Protocol on the Rules and Procedures on the Settlement of Disputes shall apply to consultations and the settlement of disputes between State Parties relating to the interpretation and application of this Protocol.
2. For greater certainty, Paragraph 1 incorporates the right for a State Party to submit a claim on behalf of its nationals through the exercise of diplomatic protection and in accordance with customary international law.
Article 45 - Dispute Prevention and Grievance Management
State Parties shall, through their designated competent bodies, facilitate the prevention of disputes and management of grievances by:
a. receiving complaints or grievances from investors in relation to their investments;
b. following-up and undertaking actions for de-escalating potential differences, or disagreements between investors and State Parties; and
c. providing effective assistance in resolving difficulties experienced by investors and their investments in such a manner as to avoid disputes.
Article 46 - Dispute Resolution
1. In the event of a dispute between an investor of a State Party and a Host State relating to an alleged breach of this Protocol, the investor and the Host State shall initially seek to resolve amicably the dispute through consultations, negotiations, conciliation, mediation or other amicable dispute resolution mechanisms available in the Host State.
2. Notwithstanding the outcome of the dispute prevention and grievances management process under Article 45, in the event that an investor of a State Party and the Host State are unable to amicably resolve the dispute in accordance with Paragraph 1, they may seek to resolve such dispute in accordance with the dispute resolution mechanisms to be provided in the Annex referred to in Paragraph 3.
3. Rules and Procedures governing Dispute Prevention, Management and Resolution of disputes covered by this Protocol, shall be set out in an Annex to this Protocol. The Annex shall be negotiated after the adoption of this Protocol by the Assembly of Heads of State and Government of the Africa Union, and finalised within 12 months at the latest from the date of adoption of this Protocol. The Annex, upon adoption by the Assembly of Heads of State and Government of the Africa Union, shall form an integral part of this Protocol.
Article 47 - Investor Liability
1. Investors and their investments shall, where applicable and in accordance with domestic laws and regulations, be subject to civil actions for liability in the judicial process of their Home State for the acts, decisions or omissions made in the Host State in relation to the investment where such acts, decisions or omissions lead to damage, personal injuries or loss of life in the Host State.
2. State Parties shall develop rules and procedures that allow for, or do not prevent or unduly restrict, the bringing of court actions relating to the civil liability of investors in the territory of their Home States, taking into account rules governing conflict of laws and the recognition and enforcement of foreign judgments.
3. For greater certainty, this Article does not exclude the possibility to bring civil actions against investors and their investments before the domestic courts of the Host State.
Article 49 - Relationship with other International Investment Agreements
1. Existing bilateral investment treaties concluded between the State Parties shall be terminated within five (5) years from the entry into force of this Protocol. Upon termination of existing bilateral investment treaties concluded between the State Parties, their survival clauses shall also be terminated.
For the avoidance of doubt, this Protocol shall apply to investments of investors of State Parties that meet the criteria of an investment at the time of the termination of existing bilateral investment treaties concluded between the State Parties.
2. State Parties shall not conclude new bilateral investment treaties among themselves after the adoption of this Protocol.
3. State Parties shall make best endeavours to review and revise relevant existing regional investment agreements adopted by the Regional Economic Communities to achieve alignment with the Protocol within a period between five (5) to ten (10) years from the entry into force of this Protocol.
4. State Parties may take into account the requirements of this Protocol when negotiating international investment agreements and when reviewing existing international investment agreements concluded with Third Parties.
Article 50 - Relationship between the Protocol on Investment and other Protocols of the AfCFTA
Upon its adoption, this Protocol, as an integral part of the Agreement, shall not modify rights and obligations under other Protocols of the Agreement. In case of conflict between this Protocol and other Protocols of the Agreement in relation to matters specifically governed by the other Protocols, the provisions of the latter shall prevail to the extent of the conflict.