The Need for Conducting Social Impact Assessment Before Commencing a Development Project The Les
I.Introduction
This short term paper discuss about the amazing case of the Shandong Dongs’ ‘donkey slaughterhouse’ in the town of Bishoftu (Debrezeit). It tries to outline the need of conducting social impact assessment before commencing business project. To this end the paper has four parts. The first part is an introductory part. The second part of the paper briefly summarizes the facts of the case. The third part of the case analyzes the case in light of the international investment law. And finally the fourth part of the case concludes the paper and draw a recommendations for the concerning bodies.
II.The Brief Summary of the Case
Shandong Dong is a donkey slaughterhouse owned by a private Chinese company, established after 80 million Br investments in Bishoftu town of Oromia aiming to slaughter up to 200 donkeys a day. It is the first ever donkey slaughterhouse to become operational in the country.
The company first came to Ethiopia five years ago and secured a license from the Ethiopian Investment Commission. Its original plan was to buy donkey skins from the Ethiopian market. The Commission, however, suggested the Company open its slaughterhouse instead, saying that they would not find anyone suppliers for donkey skin. Then Shandong started to build a donkey abattoir and made it functional in short time. [1]
Just as soon as, the government announced the fact that the country will export donkey meat and hide to China and Vietnam, the public expressed anger via social media and main stream media. Many said it is out of their religion and culture. [2]
As the media has it, the ‘unique’ plant is stalled by local authorities’ decision following a clear and loud opposition from the community around the plant, which found it offensive to its belief system and values, despite its benefits economically for it employs local people. After a while, the company was torched down by protestors during the unrest in the Oromia region. Following this bishoftu’s City Administration said it has closed down the abattoir because it is against the norms and culture of the people. [3]
III.Analyzing the Case in Light of International Investment Laws
The company comes to Ethiopia based on the investment advertisements and negotiations done by the government of Ethiopia. And accordingly the company registered and given a license to conduct its project in accordance with the contract of investment by the investment commission of the state of Ethiopia. Based on this the company invested more than 80 million Ethiopian birrs.
After all this expenses as a form of investments are made the company was torched down by protestors during the unrest in the Oromia region. Following this bishoftu’s City Administration said it has closed down the abattoir because it is against the norms and culture of the people. This made all the property of the company in functional. Thus the government of Ethiopia is indirectly expropriating the property of the company because it is against the norms and culture of the people.[4]
The recent measure taken by city officials to close the donkey slaughterhouse around Bishoftu is reminiscent of a deficit by way of lack of adequate laws to address social impact or the lack of robust implementation. The project owners, apparently foreign investors, have been reportedly instructed to pack and close off. It is possible the government has already thought of compensating the investors for their investment outlays (over 80 million Br) and other aspects of the project, a direct cost of an investment.
But, what about the indirect cost of frustration to the particular investors, and to those far off and not directly affected by the act? Investors, logically, would take government action to be arbitrary and thoughtless. Honestly, there is no wrong in that judgment. At a time when the country is short of its breaths to promote itself as a competitive investment destination, what does this action portend? Is not it ominous to speak the least?
Ethiopia and China has also BIT which sets down the rules for the investment relationship between the two countries. Per this BIT and the CIIL the government of Ethiopia has the duty to afford full protection and security and, fair and equitable treatment to a chine investors person and property once it permitted and the company entered the territory of Ethiopia. [5]
It is possible to argue that a state is free to adopt measures of expropriation or nationalization of a foreign investment in its territory as a state is sovereign. But for expropriation to be lawful it shall, be carried out for reasons of public or social interest; following due process of law; in a non-discriminatory and good faith manner; and accompanied by prompt, adequate, and effective compensation.[6]
Thus the government of Ethiopia has the duty to make good the damage caused to the Shandong Dong as it is happened due to the procedural irregularities created by the government itself as it does not conducted impact assessment and public participation before giving the license to the company or permitting the company to commence the development project. [7]
IV.Conclusion and Recommendation
A state of the art social impact assessment, whether public hearing stands as a separate process, or as part of it, provides for improved methods of assessing and managing social implications of projects. And, this is recognized globally, and there is no flinching from this ‘elephant in the room’. It increases the certainty of project success; helps avoid or prevent social risks and potential conflicts. It improves the project proponent’s ability to identify issues at an early stage and build trust between policymakers and communities, and extend the legacy of the project beyond its planned life cycle.
The list of benefits is not to be exhausted. Nor can one pretend it is all roses and no downsides of a public hearing. When public hearing goes awry, the damage is detrimental and not amenable to secure redress. It could also mean that highly viable projects could get stuck in mid air.
One emphasizes that there is no substitute to approaching investments with deliberate and value conscious attitude, losing no sight that they should be subject to the requirements of the law and the constitution. I would say ‘no hurrying for factories after factories’. The country can do it in a sustainable manner with due regard to the environment and its value system, history and community satisfaction. I hope this is in line with the concept of a ‘developmental state’.
V.References
Brown, C Commentaries on selected model investment treaties Oxford University Press 2013
Collier, P; Dollar, D; World Bank Globalization, growth, and poverty : building an inclusive world economy The new wave of globalization and its economic effects 2002 Washington, DC, New York, Oxford University Press, http://economia.unipv.it/pagp/pagine_personali/msassi/readinglist/globalization.pdf Accessed on 2017-2-24
Dolzer, R and Stevens, M Bilateral investment treaties International Centre for Settlement of Investment Disputes 1995 Netherlands
4. Houde, M, OECD International investment perspectives 2006 Novel features in recent OECD bilateral investment treaties 18 Sep 2006 http://www.oecd.org/daf/inv/internationalinvestmentagreements/40072428.pdf Accessed on 2017-1-7
[1] DW borkena, Ethiopian News April 21,2017
[2] Ibid
[3] Ibid.
[4] Comeaux, PE and Kinsella, N.S “Reducing Political Risk in Developing Countries: Bilateral Investment Treaties, Stabilisation Clauses, and MIGA & OPIC Investment Insurance” 1994 New York Law School Journal of International and Comparative Law 3 www.kinsellalaw.com/wpcontent/uploads/publications/polrisk.pdf Accessed on 2017-1-7.
[5] China-Ethiopia BITs /1998/ art’s 4 and the followings.
[6] Ryan, MC “Glamis Gold, Ltd. V. The United States and the Fair and Equitable Treatment Standard” 2011 McGill Law Journal 927 http://lawjournal.mcgill.ca/userfiles/other/1169738-Ryan.pdf Accessed on 2017-1-7
[7] See ICSID Award, “MTD Equity Sdn. Bhd. and MTD Chile S.A. v. Republic of Chile” 2004 Washington, D.C. Case No. ARB/01/7 31 http://italaw.com/documents/MTD-Award_000.pdf Accessed on 2017-2-18.