Creeping Expropriation of Mining Investments: An African Perspective
In the realm of international law an expropriation of property is considered to be one of the most severe forms of interference with property rights as it destroys investors' legitimate expectations relating to their investments. With the exception of the Andean region,1 direct expropriations have recently become rarer as governments, generally, are concerned about the negative impact this has on investor perceptions and country risk. As a consequence, indirect expropriations, an example of which is creeping expropriation, have grown in prominence.2
A creeping expropriation “may be defined as the slow and incremental encroachment on one or more of the ownership rights of a foreign investor that diminishes the value of its investment. The legal title to the property remains vested in the foreign investor but the investor's rights of use of the property are diminished as a result of the interference by the state”.3
It is frequently asserted that the identification of indirect expropriation measures cannot be assessed using abstract legal principles, but rather depends on a case-by-case analysis of the specific facts.4 This approach was highlighted in the case of Tecnicas Medioambientales Tecmed SA v The United Mexican States5 (“Tecmed”), which was heard by an arbitral tribunal convened under the auspices of the International Centre for Settlement of Investment D
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