THE ADEQUACY OF ETHIOPIA’S BILATERAL INVESTMENT TREATIES IN PROTECTING THE ENVIRONMENT: RACE TO THE BOTTOM

Abstract

States have the sovereign right to regulate investment activities within their territories to
cope up with various policy objectives. One such areas where regulation is necessitated
is the protection of the host State’s society and the environment. This article aims at
elucidating how to strike a balance between the protection of foreign investment and
the protection of the environment under Ethiopia’s Bilateral Investment Treaties (BITs).
Through a comparative doctrinal investigation, this piece finds that the BITs of Ethiopia
accord various protections to investments of foreign investors but they do not impose
adequate obligations on the investors concerning environmental protection. It comes
across the need to adopt a holistic approach of reforming the BITs from the preambles to
the substantive contents. In order to safeguard Ethiopia’s right to regulate, the preambles,
fair and equitable treatment (FET) and indirect expropriation provisions of the BITs
should be reconsidered. For this to happen, a resort to amendment, termination, and
renegotiation of the agreements would be a way out. Thus, a new generation of BITs is
needed to introduce a bottom-up approach and ensure sustainable development.