A LOCAL development analyst has challenged the government to disclose the details of the investment protection deal it recently signed with Canada.
Canada, home of the largest mining investors in Zambia, last week moved in to secure its investments in Zambia with the signing of a foreign investment promotion and protection agreement ( FIPA).
A FIPA is a treaty designed to help protect a country’s investments abroad through legally binding provisions and to promote foreign investment in the other country.
But Nsama Chikwanka, a Lusaka- based development analyst, said Zambia’s signing of a FIPA with Canada raises a lot of questions.
“For example, who signed on behalf of Zambia? What is the range of investments covered in the agreement? Why was it done from Canada when there’s an embassy nearby; was it to avoid public scrutiny? Why should we continue to sign important documents in secrecy?” he noted.
“It is important that government is seen to uphold transparency in its dealings, and therefore, Zambians need to know the details of this agreement.”
He said Zambians were all too familiar with mineral development agreements and the adverse effects these has had on future revenues for the country and on local benefits.
Chikwanka said agreements like FIPAs create an unequal environment with other investors and also undermine the very essence of competition.
“It is agreements like FIPAs that government enters with individual multi- national corporations ( MNCs) without the full knowledge of other stakeholders accessing the details that are responsible for the allegations and counter allegations recently witnessed in the local media on the tax avoidance cases involving a named MNC,” he said.
The trend by countries to sign investment protection agreements such as FIPAs has became especially pronounced in recent years as emerging nations seek to renegotiate terms of mining investments in the wake of booming prices for metals like gold and copper, trading several times more than they were a few years ago.
Canadian companies have invested more than US$ 6billion in Zambia.
In 2011, Barrick Gold Corporation, the world’s largest gold miner and one of Canada’s largest miners, spent US$ 7.3 billion on the acquisition of Zambia- focused Equinox Minerals as it pursued assets in the country’s Copperbelt Province.