On the 3rd of December 2016, Nigeria and the Kingdom of Morocco signed a Bilateral Investment Treaty (BIT) with the aim to improve bilateral trade relations and strengthen their business relationship.
The Nigeria/Morocco BIT is an ambitious update on traditional treaties and a significant attempt by two developing countries to move toward a more balanced regime of intra-African investor protection. Some of the significant provisions are:
Standards of treatment
This provision ensures substantive protection of investors by the host state usually contained in traditional treaties. It further states that investors are not only entitled to the minimum standard of treatment, but also to fair and equitable treatment, which includes full protection and security.
Sustainability
Sustainable development is a key theme of the treaty. The promotion of sustainable development is featured in the preamble as well as in other provisions. Sustainability can be found in the definition of “investment” under Article 1(3), which requires investors to contribute to sustainable development coupled with Article 24(1), which states that investors “should strive to make the maximum feasible contributions to the sustainable development of the host state and local community”.
Investors’ Obligations to the Host State
Another term of the treaty is the reciprocity of the relationship between the Investor and the Host State. Unlike, the traditional treaties, the Nigeria/Morocco BIT imposes a number of obligations on the investors. According to Article 14, investors must satisfy environmental and social impact assessment requirements based on standards agreed by the Joint Committee. Investors must also comply with international labour standards, uphold human rights and operate through high levels of socially responsible practices. Article 20 encourages investment, but not at the expense of environmental and social well-being of the host state; an investor in breach of this provision will be subject to civil liability in their home state, in the event that acts or decisions lead to significant damage or loss of life in the host state.
Dispute prevention
In most traditional treaty agreements, there is provision for the amicable settlement of disputes between an Investor and the Host State. Article 26(1) of the Nigeria/Morocco BIT takes things a step further by requiring that prior to the commencement of treaty based arbitration, the dispute must be assessed through consultations and negotiations by the Joint Committee, after which the Committee has 90 days to submit relevant information about the presented case. This requirement applies to both Investor-State and State parties disputes.
As stated earlier, the Nigeria/Morocco BIT is a marked departure from the traditional treaties. Morocco has signed a number of treaties in recent years, most recently with Mali and Burkina Faso. Neither of these examples include the innovations found in the Nigeria/Morocco BIT. Nigeria’s most recent bi-lateral investment treaty (before the Nigeria/Morocco BIT) was with China and was signed in 2001 and came into force in 2010.
