IPP journalist Rodgers Luhwago asks “why land disputes can’t be resolved within the country’s judicial system."
When Tanzania’s 2011 PCCB report ranks the Tanzanian judiciary as the second most corrupt institution in Tanzania, it seems strange that the journalist should ask such a question?
ICC arbitration `pricking` public conscience
By Rodgers Luhwago
21st August 2011
t is a safe assumption that many Tanzanians are not endeared to the International Chamber of Commerce (ICC) because the public is often the loser in cases that the organ handles as the arbiter.
Fresh in their minds is the order the ICC issued late last year, ordering the Tanzania Electric Supply Company Limited (Tanesco) to pay Dowans Sh94 billion on grounds of contract violation.
A section of the print media reported yesterday that the government had complied by the order, a development which pours cold water on the mounting public resistance against what many perceive as a gross waste of tax payers’ money.
Preceding the Tanseco-Dowans saga was one pitting the Tanzanian government and the Independent Power Tanzania Limited (IPTL), in which the Chamber ruled in favour of the latter.
The government is currently paying to the firm, billions of shillings in capacity charges at monthly intervals, plus financing the purchase of heavy funnel oil for running the plant. About three weeks ago, The Guardian on Sunday published a story focusing on an agreement between Mpanda District Council and AgriSol Energy LLC, an American-based investor, under which the latter has been given over 300,000 hectares of land for a mere Sh200 per hectare per annum. A clause in the agreement binds the two parties to refer to the ICC, whatever dispute may arise between them.
Speaking in Parliament in Dodoma recently, outspoken MP Halima Mdee (Chadema-Kawe) echoed the sentiments of a Canadian researcher - that the contract was a worst case of land grabbing in Tanzania.
The issue triggered a heated debate in the August House, when MPs were discussing the budget package for the Ministry of Lands, Housing and Human Settlements Development.
Defending the contract, though, Prime Minister Mizengo Pinda said in the modern world of business, no nation could make much headway without investor participation.
Legislator after legislator faulted the PM, contending that contracts between majority of African governments and foreign investors were always tilted to the disadvantage of African people.
Up to now, the mining sector has preponderantly been a reference point for the lop-sided, ‘Winner-Loser’ scenario. Experts and non-expert stakeholders who include politicians and indigenous mining regime zone inhabitants feel, by and large, that, due to critically faulty contracts, what accrues from local mineral wealth is an abysmally tiny fraction of the justifiable due.
But lately, research findings point to land as constituting a worse sector in that regard.
For example, a report by the International Institute for Environment and Development (IIED) released earlier this year, suggests that although contracts define the terms of an investment project, and the way risks, costs and benefits are distributed, most agreements for large-scale land deals in Africa are negotiated in secret.
It further states that only rarely do local landholders have a say in those negotiations and few contracts are publicly available after they have been signed.
The report also observes that over the past few years, agribusiness, investment funds and government agencies have been acquiring long-term rights over large areas of land in Africa, raising both the promise of development opportunities while raising fears of a new “land grab”.
On land fees, the report notes, “it (the fee) tends to be very low”, citing one contract in Sudan, under which land is reportedly leased for less than a dollar per hectare per year while in Mali land can be leased to an investor for free.
The local media recently quoted the newly-crowned Chief Justice, Chande Othman, categorically stating that Tanzania is losing a lot in public resources and the people denied their legal and human rights because of lack of expertise in law.
As for the question of land allocation to investors, most of the legislators in the on-going ‘Bunge’ session said that while Zimbabwe and South Africa were now battling with the land question, Tanzania was passive.
More disturbing is that the question of investment disputes settlement, the land fees that the investor is assigned to pay and the duration of land possession are a handful of issues that the public have constantly failed to make sense of them.
The only instance when the government emerged triumphant so far, was in a dispute between the Ministry of Water and Livestock Development and the City Water, which the ICC ruled in favour of the local side.
Overall, however, the mandatory ICC involvement puzzles the public wondering why land disputes can’t be resolved within the country’s judicial system.
Kayichele Francis, an assistant lecturer at the Mwanza-based St. Augustine University of Tanzania (SAUT), explains that “the problem with Tanzanians is that most of us are ignorant of how these investment contracts work. They are thus suspicious over almost every deal related to investment.”
He said before 1998 Tanzania didn’t have as many investors as in the subsequent period, adding that amendments made to some laws related to investments in one way or another created an attractive environment for investors.
Creation of such attractive investment environment, according to Francis, involved ratifying the Convention of the International Centre for Settlement of Investment Disputes (ICSID) which among other things binds member States to use ICC in resolving investments disputes pitting member states and foreign investors.
SOURCE: GUARDIAN ON SUNDAY