(Photo courtesy of ECESR)
Egypt is one of the most vulnerable countries regarding claims filed through international investment arbitration panels, according to an Egyptian Centre for Economic and Social Rights (ECESR) report published Sunday.
The report also describes the Bilateral Investment Treaties (BITs) that Egypt signed, as “imbalanced and favour[ing] the interests of foreign investors at the expense of state sovereignty and public interest”.
The mechanisms organising Multinational Corporations (MNCs) roles and holding them accountable are diminishing, the report said, adding that the legal framework regulating foreign investments is “aggressively shrinking” the state’s regulating role.
Egypt has also moved to revise its local investment codes with an eye to luring multinational corporations, “especially by ensuring that citizens cannot file lawsuits in national courts on corruption allegations, and ensuring that ‘economic crimes’ such as theft, corruption, bribery, are handled by the Investment Authority, away from the court system”, the report stated.
The current government has approved a law preventing third parties from challenging contracts signed between investors and the government. This law favours investors who suffered after the 25 January Revolution due to court verdicts cancelling contracts of privatising state-owned lands and companies.
The privatisation cases have harmed investors who had already pumped money in their projects, moving them away from the Egyptian market following legal instability.
“This national framework is a reflection of the global framework sketched by the World Trade Organization and its specified rules and agreements, and has essentially influenced the local government’s perception on what efforts need be undertaken in order to attract investments, especially by Multinationals,” the report explained.
