BAK
JF-Expert Member
- Feb 11, 2007
- 124,790
- 288,165
- Thread starter
- #21
Hii ndiyo kesi ambayo jamaa waliamua kufungua na Tanzania ikashinda. Verdict yake nadhani itakuwa hapa JF.
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$25m at stake over Dar water contract
From East African
$25m at stake over Dar water contract
By WILFRED EDWIN
Tanzania may be forced to pay $25 million to a British company whose water management contract it cancelled in 2005.
Despite earlier claims by government officials that the case had been withdrawn, a landmark hearing at the International Centre for the Settlement of Investment Disputes (ICSID) may bring into sharp focus how current international dispute settlement mechanisms favour powerful transnationals at the expense of developing countries.
While observers have expressed fears that the decision at an international investment tribunal could go against Tanzania, a unique intervention by civil-society groups could still save the day.
The EastAfrican has now learnt that a coalition of human-rights activists from Tanzania, Switzerland and Canada have filed a joint submission as amicus curiae (friends of the court) at ICSID, in the legal arbitration case between Biwater Gauff (Tanzania) Ltd and the Tanzanian government scheduled to be heard from this Monday in the Netherlands.
This means they can present expert arguments to assist the arbitrator in the hearing of the matter.
On February 2 this year, the arbitral tribunal granted the Centre for International Environmental Law (CIEL) from Switzerland and its partners the opportunity to file a written amicus curiae submission. CIEL is currently also heading a civil-society coalition making an amicus curiae submission in a similar water-privatisation case involving Argentina also before ICSID.
The Lawyers Environmental Action Team, the Legal and Human Rights Centre, the Tanzania Gender Networking Programme, all from Tanzania, the International Institute for Sustainable Development (IISD) of Canada, and CIEL, filed the amicus curiae submission.
The submission was opposed by Biwater, but was supported by the Tanzanian government.
The resurfacing of the case, earlier reported to have been withdrawn, marks Tanzanias third appearance at the tribunal, the first being when the Tanzania Electric Supply Company (Tanesco) was involved in an international contract dispute with Independent Power Tanzania Ltd.
The country also featured at the ICSID during the dispute between the Tanzania Telecommunications Company (TTCL) and investors MSI/Detecon over TTCLs accounts, which were a benchmark for valuing the investors 35 per cent stake in the company.
Eventually, instead of the last instalment of $60 million, the investors ended up paying $5 million, as ruled by the independent auditor.
In the latest dispute, the claimant UK-based British investor Biwater Gauff is demanding $25 million from the government of Tanzania after the latter terminated its contract with City Water Services in 2005, allegedly because the company had failed to provide clean drinking water to millions of people in Dar es Salaam.
On February 2 this year, the arbitral tribunal granted the Centre for International Environmental Law (CIEL) from Switzerland and its partners the opportunity to file a written amicus curiae submission.
The Lawyers Environmental Action Team, the Legal and Human Rights Centre, the Tanzania Gender Networking Programme, all from Tanzania, the International Institute for Sustainable Development of Canada, and CIEL, filed the amicus curiae submission.
The submission was opposed by Biwater, but was supported by the Tanzanian government.
The hearing of the case also comes at a time when the Tanzanian government through its Business Registration and Licensing Agency has started petitioning to wind up City Water Services Ltd. The petition will be heard on Wednesday this week (April 18) at the High Court of Tanzania, Commercial Division.
Biwaters 10-year contract to provide water services in Dar es Salaam was terminated by the Tanzanian government in 2005, only two years after it began operations in 2003.
Biwater is now demanding compensation under the UK-Tanzania Bilateral Investment Treaty. Experts say the matter puts the spotlight on the responsibilities of foreign investors under international investment agreements, particularly where these investments have implications for human rights or sustainable development objectives.
The engaging of a private operator for running water services commercially a radical departure from the free service tradition in place until 1991 was one of the conditions imposed by the World Bank and the International Monetary Fund for Tanzania to qualify for debt relief under the Heavily Indebted Poor Countries initiative.
Similarly, the World Banks 2000 Country Assistance Strategy made the signing of a concession agreement assigning the assets of Dawasa (the Dar es Salaam Water and Sewage Authority) to a private management company one of the conditions Tanzania had to meet in order to qualify for enhanced annual loans.
But the Tanzanian government had already begun, in 1997, to look for a private operator to take over water production, distribution, billing and collection. The search took a full six years to conclude, going through two phases, with two rounds of bidding in the second phase.
In the second round of the second phase, Biwater was the only bidder, and was ultimately awarded a 10-year lease contract in February 2003. Things immediately began to go wrong
A report on the Dar es Salaam water privatisation by a former World Bank expert on privatisation processes states, The primary assumption on the part of almost all involved, certainly from the donor side, was that it would be very hard if not impossible for the private operator to perform worse than Dawasa. But that is what happened.
So on May 13, 2005, after months of negotiations, mediations, renegotiations and other efforts, and faced with continued deterioration in the water service, the government announced that the lease contract was terminated effective from that day.
Human-rights activists supported the governments move, but observers have warned that the country could end up paying dearly for breaching the contract.
Usu Mallya, executive director of the Tanzania Gender Networking Programme, said last week that although there is no legitimate case against the people of Tanzania, a report titled Challenging Investment Rule, released in the UK recently, shows that nearly 70 per cent of cases brought to the investment disputes centre an institution of the World Bank group are settled in favour of the investor, with a compensation award against the country where the investment failed.
The report notes that in seven out of 109 cases filed with ICSID, the investors revenues exceeded the gross domestic product of the country they were suing. This case may add to the number of such cases.
The Centre for International Environmental Law says the arbitration raises a number of issues of vital concern to the local community in Tanzania, as well as for other developing countries that have privatised, or are contemplating a possible privatisation of water or other infrastructure services.
Another organisation, Public Services International, says the dispute shows how problematic it is to include investment rules in trade investment agreements, particularly if they include investor-state provisions, which allow investors to sue host governments in international tribunals.
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$25m at stake over Dar water contract
From East African
$25m at stake over Dar water contract
By WILFRED EDWIN
Tanzania may be forced to pay $25 million to a British company whose water management contract it cancelled in 2005.
Despite earlier claims by government officials that the case had been withdrawn, a landmark hearing at the International Centre for the Settlement of Investment Disputes (ICSID) may bring into sharp focus how current international dispute settlement mechanisms favour powerful transnationals at the expense of developing countries.
While observers have expressed fears that the decision at an international investment tribunal could go against Tanzania, a unique intervention by civil-society groups could still save the day.
The EastAfrican has now learnt that a coalition of human-rights activists from Tanzania, Switzerland and Canada have filed a joint submission as amicus curiae (friends of the court) at ICSID, in the legal arbitration case between Biwater Gauff (Tanzania) Ltd and the Tanzanian government scheduled to be heard from this Monday in the Netherlands.
This means they can present expert arguments to assist the arbitrator in the hearing of the matter.
On February 2 this year, the arbitral tribunal granted the Centre for International Environmental Law (CIEL) from Switzerland and its partners the opportunity to file a written amicus curiae submission. CIEL is currently also heading a civil-society coalition making an amicus curiae submission in a similar water-privatisation case involving Argentina also before ICSID.
The Lawyers Environmental Action Team, the Legal and Human Rights Centre, the Tanzania Gender Networking Programme, all from Tanzania, the International Institute for Sustainable Development (IISD) of Canada, and CIEL, filed the amicus curiae submission.
The submission was opposed by Biwater, but was supported by the Tanzanian government.
The resurfacing of the case, earlier reported to have been withdrawn, marks Tanzanias third appearance at the tribunal, the first being when the Tanzania Electric Supply Company (Tanesco) was involved in an international contract dispute with Independent Power Tanzania Ltd.
The country also featured at the ICSID during the dispute between the Tanzania Telecommunications Company (TTCL) and investors MSI/Detecon over TTCLs accounts, which were a benchmark for valuing the investors 35 per cent stake in the company.
Eventually, instead of the last instalment of $60 million, the investors ended up paying $5 million, as ruled by the independent auditor.
In the latest dispute, the claimant UK-based British investor Biwater Gauff is demanding $25 million from the government of Tanzania after the latter terminated its contract with City Water Services in 2005, allegedly because the company had failed to provide clean drinking water to millions of people in Dar es Salaam.
On February 2 this year, the arbitral tribunal granted the Centre for International Environmental Law (CIEL) from Switzerland and its partners the opportunity to file a written amicus curiae submission.
The Lawyers Environmental Action Team, the Legal and Human Rights Centre, the Tanzania Gender Networking Programme, all from Tanzania, the International Institute for Sustainable Development of Canada, and CIEL, filed the amicus curiae submission.
The submission was opposed by Biwater, but was supported by the Tanzanian government.
The hearing of the case also comes at a time when the Tanzanian government through its Business Registration and Licensing Agency has started petitioning to wind up City Water Services Ltd. The petition will be heard on Wednesday this week (April 18) at the High Court of Tanzania, Commercial Division.
Biwaters 10-year contract to provide water services in Dar es Salaam was terminated by the Tanzanian government in 2005, only two years after it began operations in 2003.
Biwater is now demanding compensation under the UK-Tanzania Bilateral Investment Treaty. Experts say the matter puts the spotlight on the responsibilities of foreign investors under international investment agreements, particularly where these investments have implications for human rights or sustainable development objectives.
The engaging of a private operator for running water services commercially a radical departure from the free service tradition in place until 1991 was one of the conditions imposed by the World Bank and the International Monetary Fund for Tanzania to qualify for debt relief under the Heavily Indebted Poor Countries initiative.
Similarly, the World Banks 2000 Country Assistance Strategy made the signing of a concession agreement assigning the assets of Dawasa (the Dar es Salaam Water and Sewage Authority) to a private management company one of the conditions Tanzania had to meet in order to qualify for enhanced annual loans.
But the Tanzanian government had already begun, in 1997, to look for a private operator to take over water production, distribution, billing and collection. The search took a full six years to conclude, going through two phases, with two rounds of bidding in the second phase.
In the second round of the second phase, Biwater was the only bidder, and was ultimately awarded a 10-year lease contract in February 2003. Things immediately began to go wrong
A report on the Dar es Salaam water privatisation by a former World Bank expert on privatisation processes states, The primary assumption on the part of almost all involved, certainly from the donor side, was that it would be very hard if not impossible for the private operator to perform worse than Dawasa. But that is what happened.
So on May 13, 2005, after months of negotiations, mediations, renegotiations and other efforts, and faced with continued deterioration in the water service, the government announced that the lease contract was terminated effective from that day.
Human-rights activists supported the governments move, but observers have warned that the country could end up paying dearly for breaching the contract.
Usu Mallya, executive director of the Tanzania Gender Networking Programme, said last week that although there is no legitimate case against the people of Tanzania, a report titled Challenging Investment Rule, released in the UK recently, shows that nearly 70 per cent of cases brought to the investment disputes centre an institution of the World Bank group are settled in favour of the investor, with a compensation award against the country where the investment failed.
The report notes that in seven out of 109 cases filed with ICSID, the investors revenues exceeded the gross domestic product of the country they were suing. This case may add to the number of such cases.
The Centre for International Environmental Law says the arbitration raises a number of issues of vital concern to the local community in Tanzania, as well as for other developing countries that have privatised, or are contemplating a possible privatisation of water or other infrastructure services.
Another organisation, Public Services International, says the dispute shows how problematic it is to include investment rules in trade investment agreements, particularly if they include investor-state provisions, which allow investors to sue host governments in international tribunals.
