2. In assessing "in like circumstances" an overall examination is required on a case by-case basis, of all the circumstances of an investment, including, among others:
a. its effects on third persons and the local community;
b. its effects on the local, regional or national environment, the health of the populations, or on the global commons;
c. the sector in which the investor is active; d. the aim of the measure in question; e. the regulatory process generally applied in relation to a measure in question; and
f. any other factor directly relating to the investment or investor in relation to the measure in question.
The examination referred to in this Paragraph shall not be limited to or biased towards any one of the factors.
Article 13. Exceptions to National Treatment
1. Measures taken by a State Party that are designed and applied to protect or enhance legitimate public policy objectives such as, but not limited to, public morals, public health, prevention of diseases and pests in animals or plants, climate action, essential security interests, safety and the protection of environment shall not be construed as a breach of Article 12.
2. Preferential treatment granted by State Parties to national investments and investors, in accordance with domestic laws and regulations, in order to achieve national development objectives or address the internal needs of designated disadvantaged persons, groups, or regions shall not be construed as a breach of Article 12.
3. Each State Party reserves the right to adopt or maintain certain exceptions to the standard of national treatment provided by Article 12 to investments made by investors of another State Party in its territory if those exceptions fall within one of the sectors or geographical regions that represent strategic importance for the Host State in accordance with its laws and regulations.
4. For greater certainty, discriminatory measures taken by a State Party to comply with its obligations under other regional or international agreements shall not be construed as a breach of Article 12.
Article 14. Most-Favoured Nation Treatment
1. Each State Party shall accord to investors of another State Party and their investments treatment no less favourable than it accords, in like circumstances, to investors of any other State Party or Third Parties with respect to the management, conduct, operation, use, expansion and sale or other disposition of their investments.
2. The provisions of Article 12, Paragraph 2 of this Protocol on assessing "in like circumstances" shall apply mutatis mutandis to this Article.
3. For greater certainty, the "treatment" referred to in Paragraphs 1 and 2 does not include dispute settlement procedures, including, but not limited to, those related to admissibility and jurisdiction, provided for in other treaties. Substantive obligations in other investment treaties, do not in themselves constitute "treatment", and cannot give rise to a breach of this Article.
Article 15. Exceptions to Most-Favoured Nation Treatment
1. Measures taken by a State Party that are designed and applied to protect or enhance legitimate public policy objectives, such as, but not limited to, public morals, public health, prevention of diseases and pests in animals or plants, climate action, essential security interests, safety and the protection of environment, shall not be construed as a breach of Article 14.
2. Nothing in Article 14 shall oblige a State Party to extend to the investors and their investments the benefit of any treatment, preference or privilege contained in:
a. any existing or future free trade area, customs union, common market agreement or any similar international agreements or arrangements to which the investor's Home State is not a Party; or
b. any existing or future international agreement or domestic legislation relating wholly or mainly to taxation.
Article 16. Interpretation of Non-Discrimination
Articles 12, 13, 14 and 15 shall govern the definition, scope, application and interpretation of all references to non-discrimination or non-discriminatory measures under this Protocol.
Article 17. Administrative and Judicial Treatment
1. Each State Party shall ensure that, in administrative and judicial matters, investors and investments of another State Party are not subject to treatment which constitutes a fundamental denial of justice in criminal, civil and administrative adjudicative proceedings, an evident denial of due process, a manifest arbitrariness, a discrimination based on gender, race or religious beliefs, or an abusive treatment in administrative and judicial proceedings.
2. For greater certainty, Paragraph 1 shall not be interpreted as equivalent to fair and equitable treatment. For further certainty, Paragraph 1 includes the minimum standard of treatment under customary international law and does not allow for an interpretation and application of such a standard that would go beyond the elements contained in Paragraph 1.
Article 18. Physical Protection and Security
1. A State Party shall, subject to its capabilities, accord to investors and their investments physical protection and security no less favourable than that which it accords to the investments of its own investors or to the investments of the investors of any other State Party or Third Party.
For greater certainty, the expression "subject to its capabilities" refers to the obligation of due diligence that a State Party shall exercise on its territory in accordance with customary international law and does not allow for an interpretation and application of such a standard that would go beyond the elements contained in this Paragraph.
2. Investors of one State Party whose investments in the territory of the other State Party suffer losses as a result of a failure of the Host State to comply with Paragraph 1, owing to war or other armed conflict, revolution, revolt, insurrection or riot in the territory of the Host State shall, as regards restitution, indemnification, compensation or other settlement, be accorded by the Host State treatment no less favourable than that which the Host State accords to investments of its own natural and legal persons or to investments of investors of any other State Party or Third Party.
Article 19. Expropriation
1. State Parties shall not, directly or indirectly, expropriate or nationalise investments in their territory except:
a. fora public purpose;
b. in accordance with due process pursuant to the procedure established by the laws of the State Party;
c. in a non-discriminatory manner; and
d. against a fair and adequate compensation paid within a reasonable period of time in accordance with Article 21, and taking into account that the assessment of the reasonable period of time shall be made on a case-by-case basis in accordance with the domestic laws and regulations of the State Party and on a non- discriminatory basis.
2. For the purposes of this Protocol:
a. direct expropriation occurs when an investment is nationalised or expropriated directly, through a formal transfer of ownership or outright seizure;
b. indirect expropriation results from a measure or a series of measures having an equivalent effect of direct expropriation without formal transfer of title or outright seizure. The sole fact that a measure or a series of measures has an adverse effect on the economic value of an investment does not establish that an indirect expropriation has occurred; and
c. the determination of whether a measure or a series of measures have an effect equivalent to expropriation requires a case-by-case, fact-based inquiry, that takes into consideration among others:
i. the duration of the measure or series of measures of a State Party; and
ii. the character of the measure or series of measures, notably their object, context and intent.
Article 20. Exceptions to Expropriation
1. Nothing in Article 19 shall prevent the issuance of compulsory licences granted in relation to intellectual property rights, or to the revocation, limitation, or creation of intellectual property rights, in accordance with international obligations and other relevant Protocols under the Agreement, where applicable.
2. Non-discriminatory regulatory actions by a State Party designed to protect legitimate public policy objectives, such as public morals, public health, prevention of diseases and pests in animals or plants, climate action, essential security interests, safety and the protection of the environment, labour rights or to comply with other international obligations, shall not constitute indirect expropriation.
Article 21. Compensation for Expropriation
1. Fair and adequate compensation shall be assessed on a case-by-case basis in relation to the fair market value of the expropriated investment, and in a reasonable period of time, in accordance with domestic laws and regulation.
2. The assessment of fair and adequate compensation shall be based on an equitable balance between the public interest and interest of those affected, having regard for all relevant circumstances and taking account of the current and past use of the investment, the history of its acquisition, the fair market value of the investment, the purpose of the expropriation, the extent of previous profit made by the investor through the investment, the previous behaviour of the investor, and the duration of the investment.
3. Compensation shall be assessed based on the fair market value of the expropriated investment at the date immediately before the expropriation took place ("date of expropriation") or before the measure became publicly known, whichever is earlier. For greater certainty, the fair and adequate compensation standard also applies in case of unlawful expropriation.
4. The computation of the fair market value of the expropriated property shall exclude any consequential losses or speculative or windfall profits claimed by the investor.
5. Any payment of compensation according to this Article shall be made in a freely convertible currency. Payment shall include simple interest at the applicable commercial rate in the Host State from the date of expropriation until the date of actual payment. On payment, compensation shall be freely transferable.
Article 22. Transfer of Funds
1. State Parties shall, in accordance with national laws and regulations, permit all transfers relating to an investment to be made freely and without delay in and out of the territory after payment of the respective taxes and duties, such transfers may include:
a. initial capital and additional amounts to maintain or increase investment;
b. profits, capital gains, dividends, royalties, interests and other current income accruing from an investment;
c. the proceeds from sale of all or any part of or from total or partial liquidation of a covered investment;
d. repayments made pursuant to a loan agreement in direct connection with an investment;
e. license fees in relation to investment;
f. payments in respect of technical services and management fees;
g. payments in connection with contracting projects;
h. earnings, such as wages and salaries, of staff who work in connection with an investment; or
i. payments arising under the dispute settlement mechanism of this Protocol or any compensation paid in relation to an investment.
2. The Host State, subject to the choice of the investor, shall allow transfers to be made in the currency of the host economy, or in a freely convertible currency recognised by the International Monetary Fund (IMF), at the market rate of exchange prevailing on the date of the transfer, in accordance with the laws and regulations of the Host State.
Article 23. Exceptions to Transfer of Funds
1. A State Party may apply non-discriminatory restrictions on transfers of funds relating to investments made in its territory in accordance with its domestic laws and regulations where applicable and in particular, relating to:
a. fulfilment of tax obligations to the Host State;
b. bankruptcy, insolvency, or the protection of the rights of creditors;
c. issuing, trading or dealing in securities, futures, options or derivatives;
d. criminal or penal offences and the recovery of the proceeds of crime;
e. financial reporting or record keeping of transactions when necessary to assist law enforcement or financial regulatory authorities;
f. ensuring compliance with orders or judgments in judicial or administrative proceedings;
g. social security, public retirement or compulsory savings schemes;
h. severance entitlements of employees; or
i. anti-money laundering and financing of terrorism.
2. A State Party may adopt or maintain non-discriminatory measures not conforming with its obligations relating to the free transfer of funds:
a. in the event or threat of serious balance-of-payments deficits or external financial difficulties; or
b. in exceptional circumstances where movements of capital cause or threaten to cause serious economic or financial difficulties in the State Party concerned.
3. Subject to the reservations of each State Party, nothing in Article 22 shall affect the rights and obligations of a State Party that is a member of the IMF under the IMF Articles of Agreement, including the right to apply a safeguard measure at the request of the IMF.
4. The State Party applying a safeguard measure contemplated in Paragraphs 1 and 2 shall promptly notify the AfCFTA Secretariat and provide a schedule for its removal within a reasonable period of time. For greater certainty, these safeguard measures shall:
a. avoid unnecessary damage to the economic and financial interests of investors and other State Parties;
b. be proportionate in the circumstances; and
c. be temporary and phased out progressively as the situation necessitating the safeguard measure improves.
Chapter 4. SUSTAINABLE DEVELOPMENT-RELATED ISSUES
Article 24. Right to Regulate
1. In accordance with customary international law and other general principles of international law, each State Party has the right to regulate, including to take measures to ensure that investment in its territory is consistent with the goals and principles of sustainable development, and with other national environmental, health, climate action, social and economic policy objectives and essential security interests.
2. For greater certainty, measures taken by a State Party to comply with its international obligations under other relevant treaties shall not constitute a breach of this Protocol.
3. For avoidance of doubt, the exercise of the right to regulate under Paragraphs 1 and 2 cannot give rise to any claim by an investor for compensation.
Article 25. Minimum Standards on the Environment, Labour and Consumer Protection
1. State Parties shall ensure environmental, labour, and consumer protection, taking into account domestic policies, international best standards and relevant international agreements to which they are parties, and shall continue to improve their standards within their domestic laws and regulations.
2. State Parties shall not encourage investment by relaxing or waiving domestic standards, or compliance with environment, labour and consumer protection laws and international minimum standards.
Article 26. Investment and Climate Change
In accordance with their domestic climate change policies, the principle of Common but Differentiated Responsibilities, and relevant international climate change instruments, each State Party shall:
a. promote and facilitate investments that support actions to mitigate greenhouse gas emissions and measures to adapt to the negative impacts of climate change;
b. promote and facilitate investments that support initiatives conducive to the financing of regional climate mitigation and adaptation programmes;
c. promote and facilitate investment of relevance for a fair and just transition in sectors such as renewable energy, low-carbon technologies, and by adopting policy frameworks conducive to transfer and deployment of climate-friendly technologies and goods and services, taking into account socio-economic constraints, in particular those related to the transition of the workforce;
d. promote, facilitate and encourage new investment regimes, such as low or zero carbon Special Economic Zones;
e. encourage investments that mitigate climate change impacts on exhaustible natural resources such as fresh water and biological diversity; and
f. cooperate with the other State Parties on investment-related aspects of climate change policies and measures.
Article 27. Investment, Public Health and Pandemics
1. Each State Party has the right to determine its public health policies and priorities, to establish its own levels of domestic public health protection, and to adopt or modify its relevant laws and measures in the context of epidemics, pandemics and other public health emergencies in accordance with its international commitments.
2. Each State Party shall, in accordance with national laws and regulations, promote and facilitate investments in the public health sector and the subsectors and related industries, including medical equipment, pharmaceuticals especially for chronic diseases, vaccines and Intensive Care Units requirements.
3. State Parties shall cooperate to identify relevant investment policies and measures to address epidemics, pandemics and other public health emergencies in accordance with the decisions and declarations of the African Union.
Article 28. Pursuit of Development Goals
Pursuant to the objectives set out in this Protocol, State Parties may introduce measures to promote domestic development including local content, taking into account Articles 12, 13, 14 and 15. Measures covered under this Article include among others:
a. granting of preferential treatment to any enterprise or company qualifying under the domestic law of a State Party in order to achieve national, sub-regional, or regional development goals;
b. supporting the development of local entrepreneurs and to establish linkages with local firms, supply chains, industries and institutions with a view to strengthening local capabilities;
c. enhancing productive and trade capacity, generating employment, wealth creation, developing human resource capacity and training, research and development;
d. appointing, where appropriate, as executives, managers or members of board of directors, nationals from the State Party where the investment is made;
e. promoting transfer of technology, skills and know-how, innovation and other benefits, a production process or other proprietary knowledge; or
f. addressing economic and development disparities suffered by identifiable ethnic or cultural groups, including historically marginalised groups or geographical regions and localities.
Article 29. Human Resources Development
1. State Parties shall develop national policies to guide investors in developing human capacity of the labour force, including for mid-level and managerial positions. Such policies may include incentives to encourage employers to invest in training, capacity building and knowledge transfer.
2. In developing such policies, State Parties shall pay particular attention to the needs of youth, women, persons with disabilities and vulnerable groups.
3. State Parties are encouraged to develop and enforce mutual recognition agreements on human resource development in collaboration with the AfCFTA Secretariat, in particular on qualification and experience leading to certificates and diplomas.
Article 30. Transfer of Technology
State Parties, in accordance with their domestic laws and regulation and their respective capabilities, shall facilitate the intra-regional and international transfer of technology by various measures, such as
a. accessing available information regarding description, location and, as far as possible, approximate cost of technology;
b. establishing or strengthening of technology transfer centres;
c. providing training for research, engineering, design and other personnel engaged in the development of national technologies or in the adaptation and use of technologies transferred;
d. providing assistance in the development and implementation of laws and regulations with a view to facilitating the transfer of technology;
e. encouraging the granting credits on preferential terms for financing the acquisition of capital and intermediate goods in the context of approved development projects involving transfer of technology transaction;
f. assisting in the development of technological capabilities of the companies and their personnel;
g. encouraging investors to adopt in the course of their business activities, practices that permit the transfer and rapid diffusion of technologies and know-how, with due regard to the protection of intellectual property rights, on reasonable terms and conditions; and
h. fostering conditions that encourage investors to undertake research and development in a manner that contributes to the national development goals of the Host State.
Chapter 5. INVESTOR OBLIGATIONS
Article 31. Relation to State Party Obligations
1. Notwithstanding the investor obligations set out in this Chapter, the provisions in this Chapter are without prejudice to the obligations of the State Parties to promote and enforce, among others:
a. laws and policies to protect investment-related human rights, labour rights and the environment;
b. anti-corruption, anti-money laundering, anti-terrorism financing and anti-bribery measures; or
c. laws and policies to protect the rights of indigenous peoples and local communities.
2. State Parties shall ensure that investors and their investments comply with their domestic law and regulations and international law.
Article 32. Compliance with National and International Law
Investors and their investments shall carry out their operations in compliance with all relevant domestic laws and regulations, administrative guidelines as well as applicable international law.
Article 33. Business Ethics, Human Rights and Labour Standards
Investors and their investments shall comply with high standards of business ethics, investment-related human rights and labour standards, and in particular shall:
a. support and respect the protection of internationally recognised human rights;
b. ensure that they are not complicit in human rights abuses;
c. comply with the International Labour Organisation (ILO) standards, including the ILO Declaration on Fundamental Principles and Rights at Work, and domestic labour legislations;
d. not use child labour or forced and compulsory labour;
e. eliminate discrimination in respect of employment and occupation;
f. refrain from discriminatory or disciplinary action against employees who submit reports to the company's board or to the competent public authorities about practices that violate domestic laws, this Protocol, or other standards of corporate governance to which the company is subject; and
g. act in accordance with fair business, marketing and advertising practices when dealing with consumers and must ensure the safety and quality of goods and services they provide.
Article 34. Environmental Protection
1. Investors and their investments shall, in carrying out their business activities, respect and protect the environment, and, in particular shall:
a. respect the right to a clean, healthy and sustainable environment, as reflected in Article 24 of the African Charter of Human and Peoples' Rights, and the Resolution of the United Nations General Assembly A/RES/76/300 ("The human right to a clean, healthy and sustainable environment");
b. comply with the principles of prevention and precaution when conducting their business activities to anticipate and prevent any risk of significant harm to the environment;
c. carry out an environmental impact assessment, in accordance with the best international standards and practices and as required by domestic law;
d. apply the precautionary principle to their environmental impact assessment and to decisions taken in relation to a proposed investment, including any necessary mitigating or alternative approaches to the investment, or precluding the investment if necessary; and
e. where their business activities cause or may cause harm to the environment, take steps to mitigate the harm, to restore impacted sites and ensure a clean, healthy and sustainable environment.
2. Investors shall not exploit or use natural resources to the detriment of the rights and interests of the Host State and local communities.