Tanzania: Fipa – the Myth of Reciprocity – by Paula Butler and Evans Rubara (All Africa.com – August 8, 2013)

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The new investment code between Tanzania and Canada raises questions as to whose interests the Tanzanian state really serves, why, and to whom the Tanzanian state is accountable. Such a far-reaching investment regime has been adopted with minimal public awareness and debate among Tanzanian citizens. Hypocritical! This may be the most accurate word to characterize the recent Foreign Investment Protection Agreement (FIPA) between the United Republic of Tanzania and Canada.

Since the infamous demise of the proposed Multilateral Agreement on Investment (MAI) in 1999, Canada has been quietly using bilateral trade agreements to introduce the very investment terms that were then opposed by a groundswell of Global South countries and informed citizens. The most recent of these is an investment agreement with Tanzania.

WHAT TRANSPARENCY?

While Canadian government officials pose as champions of transparency in the realm of global governance, and have touted their support for the Extractive Industries Transparency Initiative (EITI) in Tanzania, this Agreement has had minimal public visibility.

Even though the Agreement was signed in Dar es Salaam on May 16, 2013, and tabled in the Canadian parliament on June 12, 2013, only recently was the Agreement made available on a Canadian government website.

There is no indication that the Agreement was also tabled in the Tanzanian parliament or that Tanzanian parliamentarians have had access to its content.

Further, while the terms of the Agreement apply to both central and ‘sub-national levels of government – i.e. in Tanzania’s case, to municipal and local government authorities – it is not clear that Tanzanian municipal and local government officials had any access to the proposed content of the Agreement, information about its implications or opportunity to provide input, debate or dissent. Indeed, in Canada, much of the opposition to the MAI in the late 1990s was due to the strictures it would have placed on municipal and provincial governments.

Given Canada’s stated commitment to supporting transparency in governance practices in countries of the Global South, did Canada take any steps to encourage or enable the Tanzanian government to popularize the content of the proposed investment agreement, educate the citizenry and provide forums for discussion and debate?

Notably, the official signed version of the Foreign Investment Protection Agreement between the United Republic of Tanzania and Canada is written only in Canada’s two official languages – English and French – and not in Kiswahili.

Does a Kiswahili translation exist, and if so, has it been circulated to Tanzanian stakeholders such as parliamentarians, local governments and civil society organizations? It appears not.

Can the Agreement be deemed to have legitimate legal status if it has not been subject to a legitimate democratic process?

WHAT MUTUALITY?

A second major concern is the imbalance in benefits to Tanzanian and Canadian investors. While the agreement purports to ‘intensify economic co-operation and promote sustainable development for the mutual benefit of both countries’ and to ‘create and maintain favourable conditions for investments by investors of one Party in the territory of the other Party’, this is little more than rhetorical flourish: the agreement is surely primarily designed to protect Canadian investments in Tanzania.

The economic difference between Tanzania and Canada is of ‘David and Goliath’ proportions: at $1.8 trillion GDP (Canada) versus $28 billion GDP (Tanzania) in 2012, Canada’s economy is 65 times larger than Tanzania’s.

While direct investment figures indicating Tanzanian FDI in Canada and Canadian FDI in Tanzania are not available – ‘due to issues of commercial confidentiality’ – they are predictably at least as disproportionate as the trade figures: in 2012, Canadian exports to Tanzania were valued at $80.5 million, while imports from Tanzania were just under $9 million.

While there is an active and growing Canadian investor presence in Tanzanian transportation, electricity infrastructure, mining equipment and services, and the oil and gas sector, Canada’s most important presence in Tanzania is in mining.

In 2011, there were 16 Canadian mining companies active in Tanzania with cumulative mining assets amounting to $2.3 billion. Indeed, benefits and protections for Canadian mining companies appear to subtend the latest round of bilateral investment agreements that Canada has instigated.

Significantly, similar agreements signed with Zambia and Cameroun were announced at the annual Prospectors and Developers Association of Canada (PDAC) conference in March 2013, where they were applauded by mining company officials.

WHAT ARE THE DETAILS? (IF THE FIPA ENCOURAGES MORE CANADIAN INVESTMENT IN TANZANIA, WON’T THAT BE GOOD FOR TANZANIA?)

The Canada-Tanzania FIPA agreement features all the now-classic elements of a neo-liberalized investment regime designed to favour and benefit transnational business. It limits the possibilities for Tanzania to introduce policies that will protect and favour domestic businesses and Tanzanian citizens against aggressive foreign competition.

For the rest of this commentary, click here: http://allafrica.com/stories/201308090801.html?viewall=1

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