Safeguarding the State’s Regulatory Autonomy: Rethinking Bilateral Investment Treaties in Kenya

Abstract

The current regime under which Bilateral Investment Treaties (BITs) are negotiated is tilted in favour of the foreign investor. Consequently, the BITs that have been concluded by Kenya curtail the government’s regulatory autonomy. This is made possible through formal trappings of the law, which though subtle and indirect, lead to chilling implications on the government’s regulatory autonomy over foreign investments. While the situation can be blamed on poor negotiation skills on the part of the Kenyan government, in reality, such would be just but an epidermal view as the problem runs much deeper. Through an interpretative analysis of the historical emergence of BITs, this paper argues that BITs were intended to achieve just that – limit governmental action aimed at regulating foreign investments. Therefore, a critique of BITs, purely on textual analysis, would be misplaced, not because of lack of legitimacy in the concerns, but rather, for a failure to appreciate the role played by these ever-present historical nuances. It is for this reason that this paper contextualizes its analysis of BITs within the greater historical context with the ultimate aim of unravelling the implication of this skewed normative framework on the regulatory autonomy of the Kenyan government. The paper demonstrates the pitfalls that await a country too eager to trade its rights to full sovereignty in the hope of growing its economy through Foreign Direct Investments. By so doing, this paper advocates for a conscious management of Kenya’s BIT portfolio and a possible rethinking of the necessity of BITs for the country.