Creeping Expropriation of Mining Investments: an African Perspective

Abstract

Indirect or creeping expropriation in international investment law is the incremental encroachment of an investor’s ownership rights by a host state, which effectively neutralises such investor’s rights. This article seeks to extract principles of creeping expropriation from various investment arbitration decisions, particularly those relating to Argentina’s 2001/2 financial crisis, and apply these to assess the potential of creeping expropriation claims in five African mining jurisdictions, all of which have recently embarked on significant reforms to their mineral regulatory regimes. All these countries have signed and ratified bilateral investment treaties, principally with developed countries, which provide, in substantially similar terms, for protection against indirect expropriation. The countries reviewed in this article show signs, to a greater or lesser extent, of the creeping expropriation of their mining investments. The article considers the impact of the recent global recession, which, paradoxically, has limited the appetite of some African governments for more radical regulatory reform.