Giving his views on the matter, a member of the Lawyers’ Environmental Action Team (Leat), Mr Clay Mwaifani, advised the Government to start a process of reconciliation with all those whose investments were affected during the Magufuli regime.
Dar es Salaam. One day after the government said it would appeal a recent by the International Centre for Settlement of Investment Disputes (ICSID), analysts say it was about time the government engaged in discussions with people who were affected by investor-harsh policies of the fifth phase administration.
Under the recent ICSID ruling, Tanzania is to pay an Australian firm, Indiana Resources Limited (IDA) $109.5 million.
But the Attorney General, Judge Eliezer Feleshi said on Tuesday that the government was proceeding with appeal and other communication processes.
In its ruling, the Tribunal, which is part of the World Bank’s ICSID, ordered Tanzania to pay Indiana Resources the sum following the seizure of a nickel mine way back in 2018 when the country was under the leadership of the late John Magufuli.
The Tribunal found on 14 July that Tanzania had breached the UK-Tanzania Bilateral Investment Treaty when it seized the Ntaka Hill Nickel Project in early 2018.
Ntaka Hill was held by UK-registered Ntaka Nickel Holdings and Nachingwea UK, as well as a Tanzania-registered entity called Nachingwea Nickel. The three entities acted as claimants in the case.
Indiana Resources, in turn, is a 62.4 percent majority shareholder of the combined holdings of the claimants, and Indiana was responsible under JV agreements to handle arbitration.
“The amount of the Award reflects the substantial investment that has been lost by shareholders through Tanzania’s unlawful expropriation of Ntaka Hill,” Indiana Resources Executive Chairman Bronwyn Barnes said.
“The ICSID Convention has been ratified by 158 Member States of the World Bank – including Tanzania. This means that any award issued by an ICSID tribunal is enforceable in any one of those 158 member States as if it were a judgment of one of their own courts.”
Tanzania was also ordered to pay the ICSID’s legal costs, and part of the $109.5 million payment to Indiana includes compound interest.
Tanzania will also ultimately pay the UK-based international law professional Litigation Capital Management Limited some $15 million of the amount. That amount could climb further over the next 120 days.
Since coming to power on March 19, 2021, President Samia Suluhu Hassan has since made efforts to craft a more investor-friendly atmosphere.
It is on the back of this view that analysts say the government should seek to discuss with those who were adversely affected by the policies with a view to striking a win-win situation and avoid the recurrence of such cases that cost Tanzanian taxpayers dearly.
Their views are also based on the fact that there were still several cases involving Tanzania and other investors who were equally affected by the change in policy during the period.
The cases include the one that was filed on July 27, 2020 by Winshear Gold Corporation and by Montero Mining & Exploration Limited on October 5, 2020.
These cases come at a time when the government has already started paying a compensation of $165 million (Sh380 billion) to the Eco Energy Group Company that won its case against the decision to revoke its ownership of 20,400 hectares in Bagamoyo during the late Magufuli era. The land was later given to an investor for sugar production.
The latest ruling also comes at a time when the Airbus A220 aircraft that was held in The Netherlands since January last year by the Eco Energy Group Company for allegedly delaying making compensations has just returned home after being held abroad due to similar cases.
Giving his views on the matter, a member of the Lawyers’ Environmental Action Team (Leat), Mr Clay Mwaifani, advised the Government to start a process of reconciliation with all those whose investments were affected during the Magufuli regime.
This, he said, would be one of the best ways to foster the implementation of President Hassan’s 4Rs (Reconciliation, Reforms, Resilience and Rebuilding).
“They used their money for research and the licences allowed them to do so and the Government said it would reimburse the costs incurred by the investors and that is the basis of their claims. Let’s pray they withdraw their case (Indiana Resources), and all the others should be called for talks before they decide to sue us,” he advised.
Mr Mwaifani’s argument was echoed by the Executive Secretary of the Tanzania Chamber of Mines and Energy (TCME), Mr Benjamini Mchwampaka, who advised the Government to be more careful about making changes in its laws, believing in discussions.
“When the government wants to make legal changes, it needs to have discussions with stakeholders to avoid such things, I believe that if there had been discussions we would not have reached this stage, consultations would have brought a win-to-win situation (benefiting both sides),” said Mchwampaka.
In July 2017, former President Magufuli’s administration introduced wide-ranging amendments to the Mining Act 2010, which, inter alia, abolished the legislative basis for the Retention Licence classification with no replacement classification.
On 10 January 2018, Tanzania published the Mining (Mineral Rights) Regulations 2018 whereby the government cancelled all Retention Licences issued prior to 10 January 2018 at which point they ceased to have any legal effect.
The rights over all areas under Retention Licences, including the Retention Licence held for the Project, were immediately transferred to the Government of Tanzania.
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