the Implication of Bilateral Investement Treaties of Ethiopia on Labour Regulation
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Date
2023-06
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Addis Ababa University
Abstract
Bilateral Investment Treaties are legal agreements between two sovereign nations to entice
Foreign Direct Investment into the capital-importing country. Meanwhile, the capital-exporting
nation endeavors to shelter investors from political uncertainties and instability, and more
widely, to safeguard their investments on foreign soil. Ethiopia has sign nearly 35 BITs with
other nations. Upon meticulous scrutiny of the country's existing BITs, it surfaced that most of
them were ignorant of the labour clause, which is the primary obligation of the investor in the
host country. The majorities of Ethiopia’s ratified BITs are disadvantageous in terms of labour
rights and exhibit the symbol of outdated investment treaties. While Ethiopian BITs have ample
safeguards for foreign investors, they do not impose any legal duties on investors to protect
labour rights. This absence of labour-friendly clauses in BITs undermines the right to steer FDI
towards labour protection. However, Ethiopia's BITs have endeavored to integrate labour
provisions in two ways. The BIT between Ethiopia and Finland features a labour clause in the
preamble as a non-binding element of the investment agreement. In contrast, the other BITs
incorporate a labour clause in the substantive section of the agreement. Examples of such BITs
are the BIT between Ethiopia and the United Arab Emirates, the BIT between Ethiopia and
Qatar, the BIT between Ethiopia and the Belgium-Luxembourg Economic Union, and the BIT
between Ethiopia and Brazil. The study employed the doctrinal method of legal research. To
safeguard labour rights, Ethiopia has integrated most international labour instruments into its
bilateral investment treaties. The concept of labour regulation has also been entrenched in the
country's constitution and domestic legislation. However, it is absent in most BITs. As such, any
action taken by Ethiopia to comply with labour regulation may be deemed indirect
expropriation. Consequently, Ethiopian BITs must be amplified with domestic and international
labour responsibilities defined by its constitution and domestic legislation. Therefore, the study
recommends a remedial measure, such as renegotiating existing BITs and amending them to
expressly incorporate labour protection provisions. The Ethiopian government must scrutinize
BITs with utmost care, striking a balance between investor rights and obligations. It is crucial
that any fresh BITs include a provision mandating governments to safeguard and enforce labour.