Activists push for review of Investment Code Act – The Kampala Report

A group of civil society organisations is pushing for the review of the Investment Code Act 2019, to possibly make it responsive to the current business environment and regulatory and social needs.

Many say that while some aspects were either omitted or not comprehensively catered for in the Law, there are also new and emerging issues related to investment that need to be addressed in the Act.

These would not only help protect the rights of consumers, workers and communities, and the environment, but also further streamline the investment climate for all business operators.

Led by SEATINI-Uganda, the newly-formed Investment Core Group says that the existing investment policies, laws and agreements are the major source of violation of economic, social, cultural and environmental rights, among others.

These, they say, have continued to negatively impact on cost communities and marginalized categories of people through land dispossessions, impoverishment, environmental degradation, and violation of labour rights, among others.

“This is coupled with the evolving investment policy landscape with various emerging issues that necessitate the review of existing investment policy frameworks at the national level to address these issues,” says the group, adding that this is the reason they want the Investment Code Act, 2019, reviewed.

Joseph Byomuhangi, the Project Coordinator, of the Uganda Consortium on Corporate Accountability, gives the example of rights violations by investors on workers in flower firms and mining projects as well as displacement of populations from their land by large-scale agriculture and mining projects.

Byomuhangi also says that much as many laws regulate investments, including the Public Procurement and Disposal of Assets Authority (PPDA) Act, the Companies (Amendment) Act, 2022, and the National Content Act, among others, these issues are not catered for.  The group says that the Investment Code Act and indeed most other laws related to investments were designed to attract investments into the country, hence protecting the investors at the expense of local businesses, workers and surrounding communities.

Jane Nalunga, the Executive Director, of SEATINI Uganda says the investment promotion agencies and the entire leadership of the country talk of job creation as the major reason for promoting foreign direct investments.

However, according to her, the laws do not provide for the quality of jobs created, protection of local and exported workers against abuse, environmental rights and inclusivity to ensure that all categories of civilians benefit from the benefits of the attracted investments.

Nalunga also cited the controversies around China Town Superstore the coming of which has caused uproar among the local traders.

“What do we want to achieve as a country? Where does China Town fall?,” she asked, adding, “We demand robust policies that ensure our government can regulate effectively and equitably.”

She insists that by rethinking the country’s investment policies, the country can create an environment where economic growth and community welfare go hand in hand.

“Investments should lift communities, not displace them. We need to ensure that our investment laws protect both our people and our planet.”

This also comes at a time of increasing global regulations like the European Union Deforestation Regulations which is likely to affect not only Uganda’s exports but also human rights. But they say such policies should ensure the rights of all are protected.

“The Investment Code should recognize that the state, citizens, and foreign entities are all stakeholders. We need a framework that acknowledges everyone’s role and rights in the investment landscape,” says Faith Lumonya, Economic Justice and Climate Action Programme Officer at Akina Mama wa Afrika.

She said the current law does not provide clear guidelines on bilateral investment treaties, adding that the “Investment Code must provide clarity on which agreements to pursue for balanced and effective international partnerships.”

The core group now wants the Investment Code Act, 2019 revamped to address climate justice, energy transition, and human rights, “to align with global standards and local needs.”

Herbert Kafeero, the Programs Manager at SEATINI Uganda says the Investment Code Act 2019 has gaps mainly due to the changing local, regional and global investment terrain, that a review should address.

They also want the government to introduce a Human Rights Assessment Report as a prerequisite for granting a license to the investor.

Kafeero added that Uganda Investment Authority, a one-stop centre for investment promotion should be given more mandate including supervising or coordinating all the agencies that are in the line of promoting investments, as well as revoking a license of any investor violating the Code Act.

Denis Lee Oguzu, Member of Parliament Maracha County and also a member of the National Economy Committee at Parliament, said there is a need to consider the politics of the country when designing the policy review draft so that it is attractive to the people in order not to reject it.

On the role of the parliament, Oguzu says, a lot depends on the interest of the president who can influence what the House decides, hence the need for the Group to make comprehensive studies of the environment as they come up with their demands.