Introduction
On 17 December 2020, the Zimbabwe Investment Development Agency (ZIDA) was launched. ZIDA is established in terms of the Zimbabwe Investment Development Agency Act [Chapter 14:37] (hereafter the Act). The launch of this Investment Promotion Agency (IPA) is a welcome development by the Government of Zimbabwe in pursuance of its ease of doing business reforms.
ZIDA is an entity charged with the promotion, entry, protection and facilitation of investment (Preamble of the Act). Foreign Direct Investment (FDI) contributes significantly to the development of a nation. Countries are in a constant drive to attract FDI to contribute to Gross Domestic Product (GDP). In 2015, the United Nations (UN) Member States adopted seventeen Sustainable Development Goals (SDGs) 2015-2030. In the same year, the United Nations Conference on Trade and Development (UNCTAD) released a blueprint on Investment Policy Framework for Sustainable Development.
The Preambles to the Southern African Development Community (SADC) Finance and Investment Protocol (FIP) and Investment Agreement for the COMESA Common Investment Area (CCIA) make extensive reference to the aspiration for investment to contribute to sustainable development. However, in the entire Act there is no reference to the SDGs or 'sustainable development' even as an aspirational objective in the Preamble.
Investment Policy and Sustainable Development
At the 2012 UNCTAD XIII Conference, Member States recognized the role of FDI in the development process and called on countries to design policies aimed at enhancing the impact of foreign investment on sustainable development and inclusive growth, while underlining the importance of a stable, predictable and enabling investment climate.
The 2014 UNCTAD World Investment Report (WIR) identified ten relevant sectors for priority investment for the sustainable development which are as follows: power; transport; telecommunications; water and sanitation; food security and agriculture; climate change mitigation; climate change adaption; eco-systems/biodiversity; health and education. The National Development Strategy 1 (NDS1) (2021-2025) prioritizes development in all the foregoing areas.
In 2015, the UN Member States adopted the SDGs. In the same year, UNCTAD released a blueprint on Investment Policy Framework for Sustainable Development. In December 2019, the UN General Assembly adopted a Resolution Promoting Investments for Sustainable Development (A/RES/74/199).
Earlier Agreements such as the SADC FIP and COMESA CCIA make extensive reference to sustainable development in investment policy formulation. The South African Protection of Investment Act 22 of 2015, provides a useful example of legislation that endeavours to strike a balance between investment promotion, protection, facilitation, regulation and sustainable development.
Sauvant[1] defines sustainable investment as, "a commercially viable investment that makes a maximum contribution to the economic, social and environmental development of the host country and takes place in the context of fair governance mechanisms, as established by host countries and reflected, for instance, in the incentives they offer".
As negotiations continue for a Protocol on Investment for the African Continental Free Trade Area (ACFTA) it is anticipated that the Protocol shall have extensive provisions on sustainable investment and development. It is therefore not clear why the Act is silent on the need for ZIDA to focus on promoting investment which contributes to sustainable development.
The word 'development' only appears in the title of ZIDA without a functional role in the Act itself. NDS1 makes extensive reference to the SDGs and sustainable development, it is therefore unfortunate that the Act does not complement the policy direction by ensuring that ZIDA focuses on attracting investment which is sustainable and growth oriented. There is an urgent need to amend the Act to include the concept of sustainable investment in the Act to ensure that the envisaged functions of ZIDA conform to the developmental aspirations of the people of Zimbabwe.
It would have been preferable for the Act to specify sustainable investment criteria including an undertaking by the investor to comply with the International Labour Organization (ILO) Multinational Enterprise (MNE) Declaration; UN Guiding Principles on Business and Human Rights; and requiring investors to provide periodical corporate social responsibility (CSR) reports. An effort was made to incorporate some of these responsibilities for the investor in section 21 of the Act but more needs to be done to move from investor promotion and protection to facilitation and regulation.[2]
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Gabor E and Sauvant K "Incentivizing sustainable FDI: The Authorized Sustainable Investor" 2019 Columbia FDI Perspectives No. 256 at 1.
Baltag C "From investment promotion and protection to investment regulation" 2020 Columbia FDI Perspectives No. 293 at 1.
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