Host State’s Regulatory Space For Essential Security Interests: A Scrutiny Of Ethiopian Bits

Abstract

While host states interest in concluding BITs is to have the BIT that incorporates terms that empower them to effectively regulate foreign investments situated in them, the home states interest on the other hand is to limit the regulatory power of host states over their investments situated abroad even up to taking away the inherent sovereign power of the host states of protecting their essential security interests. Ethiopia is one among the least developed countries of the world and parties to many bilateral investment treaties with various countries across the globe. A systematic analysis into the terms of all BITs concluded by Ethiopia reveals a serious issue of not uniformly incorporating terms that will allow the government of the country to exercise its essential security interests on the one hand, and protect the interests of foreign investor concerning their investments, on the other hand. The research seeks to employ the doctrinal research method. It analyzes BITs concluded by Ethiopia in line of their regulation of essential security interests of the country with the objective of addressing three main questions; how the contemporary international investment agreements strike balance between the foreign investor need of protection for their investment and host countries power of exercising their regulatory power of essential security interests? How BITs concluded by Ethiopia accommodate the sovereign power of the regulatory space of essential security interests of the country without violating the BIT obligations entered into? And finally, how other countries regulate their essential security interests in line with their BIT obligations they concluded with other countries? By analyzing all Ethiopian BITs and laws with different literatures and some countries Model BITs concerning essential security interests with current hot argument of developing countries in the way the international investment concept reframed to strike balance the two contradicting interests of host and home countries. The thesis concludes that the majority of Ethiopian BITs do not protect the essential security interest, hence, the study forwards recommendations for the country to terminate all BITs that do not recognize the state’s inherent power to protect its essential security interests, and to adopt a Model BIT.