Investment Treaties: Policy Alert Warns Nigeria of Billion-Dollar Risks

Blessing Ibunge in Port Harcourt

Policy Alert has urged the National Assembly to take a more active role in Nigeria’s bilateral investment treaty (BIT) process, warning that poorly negotiated agreements and investor-state dispute settlement (ISDS) provisions could expose the country to billion-dollar liabilities and restrict its ability to implement environmental and climate policies.

The organisation made the call in Port Harcourt, Rivers State, during a multi-stakeholder dialogue on ISDS, energy transition risks and responsible divestment in the Niger Delta.

The two-day event, which ends with a capacity-building session, is part of Policy Alert’s intervention, ‘From Exit to Accountability: ISDS, Energy Transition Risks, and Responsible Divestment in the Niger Delta’.

Speaking with journalists, Lead, Energy, Extractive and Climate Justice Programme at Policy Alert, Edidiong Dickson, said Nigeria’s efforts to attract foreign direct investment must be balanced with safeguards against fiscal and policy risks associated with investment treaties.

“Bilateral investment treaties have become a very great source of worry for the country because of the fiscal risks they expose the country to and how they have reduced the policy legroom for government,” Dickson said.

He said some investors had invoked ISDS provisions to pursue claims against Nigeria before international arbitration tribunals, with the claims running into billions of dollars.

Dickson said the major outcome of the dialogue was the decision to engage the National Assembly as the federal government reviews Nigeria’s bilateral investment treaties.

“What has emerged strongly here as the next action point is engagement with the National Assembly legislature because we are at a time where the government is reviewing bilateral investment treaties,” he said.

He said legislative participation would provide greater democratic scrutiny of treaty-making and enable Nigeria to negotiate “carve-outs” that would protect critical areas of public policy from investor-state claims.

Dickson also called for greater transparency in the negotiation and implementation of investment agreements, particularly where communities and the environment could be affected.

“You cannot go into a room with only a handful of people to talk about something that has such consequence for the generality of the population, and yet the people don’t know about it,” he said.

Policy Alert Executive Director Tijah Bolton-Akpan said Nigeria’s drive for foreign investment must also be consistent with its climate commitments and energy-transition objectives.

He noted that Nigeria had made commitments under the Paris Agreement and adopted frameworks including the Climate Change Act 2021, its updated Nationally Determined Contribution and the Energy Transition Plan.

Tijah questioned how these commitments could be achieved if investment treaties narrowed the government’s policy space.

“We are trying to use this multi-stakeholder dialogue today to link this conversation with the energy sector,” he said, adding that the Niger Delta was selected because it remains the centre of Nigeria’s oil and gas industry and is home to communities directly affected by investment decisions.

Also speaking, Chris Nku of the Stakeholder Democracy Network (SDN) said investment treaties should be aligned with Nigerian laws and contain adequate environmental and social safeguards.

He said communities were often excluded from treaty and investment processes despite bearing the consequences of projects in their areas.

“When new treaties are involved, new investments are coming in, what happens to the dwellers of that environment? They need to work, they need income, so our treaties should be able to capture that,” Nku said.

He urged the government to embed environmental protection and community participation in future investment agreements covering the oil, gas and mining sectors.