Investment Law amendments unconstitutional for their protection of corruption: ECESR

Adam Koppeser
4 Min Read

Recent amendments to the Investment Law “protect corruption” and infringe on the ability of the courts to carry out their duties, the Egyptian Centre for Economic and Social Rights said in a Tuesday statement.

The ECESR announced Sunday it had received a permit from the Administrative Court to challenge the constitutionality of amendments to the Investment Law, approved on 22 April by interim President Adly Mansour, which would effectively prohibit the challenging of contracts between the state and investors.

In its Tuesday statement, the centre called the amendments “one of the worst new laws for wasting public funds and [eroding] the rights of the state”.

In any democratic government, the ECESR said, the judicial system must be able to carry out its role effectively. “Judicial oversight [of the rest of the government] does not exist unless… the right to litigation [against government decisions] is ensured,” the statement read. Inability to litigate “limits the oversight role” of the judiciary in the process of legislation, it said.

The ECESR cautioned that the law  enables future contracts that waste state assets and the country’s natural wealth , which belongs to Egypt’s citizens.

One of the most commonly cited justifications by successive Egyptian governments for the law is that allowing domestic litigation against contracts would “increase the number of cases heard internationally against Egypt”.

While the ECESR acknowledged that Egypt is one of the four most-sued countries internationally, it asserted that “the solution certainly does not lie in the closure of the local litigation against corruption”.

At fault for such cases, it said, was the government’s continued engagement in bilateral agreements whose terms leave them vulnerable to such litigation, while at the same time allowing “domestic legislation to reconcile with corruption and [abolishing] provisions in the judiciary which aim to expose corruption in privatisation cases and land sales”.

Meanwhile, the ECESR also heavily criticised the government’s argument that the law is “necessary to promote a reassuring investment climate” and that “challenging the provisions have harmed the reputation and integrity of state bodies”. Such claims, the ECESR said, are based on “no acceptable logic”.

The ECESR also stated that the amendments are part of “a package of legislation taken hastily in a few months by the two [transitional] governments… to achieve secure transmission of power to the President and the Parliament elected enjoy real legitimacy”.

“The common factor leading to this legislation and procedures is that they reflect a clear bias by the transitional authority based on the interests of businessmen and investors” at the expense of “the erosion of the powers and functions of the judiciary”, the centre said.

The ECESR concluded by calling on the president “in his capacity as judge and man of the law” to recognise the “difficult situation” the law creates and to cease its implementation.

Leading up to the granting of its right to appeal the law, the ECESR had sent a memorandum to the Administrative Court, basing it on previous rulings made by the Constitutional Court and the Supreme Administrative Court. The previous ruling denied the state the right to issue such laws which defy “transparency and can directly lead to corruption”.

Since the 2011 uprising, Egyptian courts have issued around 11 rulings that ordered the state to reverse privatisation deals signed by former president Hosni Mubarak, one of the most famous being the renationalisation of Omar Effendi from Saudi investors.

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Adam Koppeser is the Op-Ed editor at Daily News Egypt. Available via email at [email protected], and on twitter @akoppeser.