On 9th October 2023, the Council reached an agreement for the conclusion of the sustainable investment facilitation agreement (SIFA) between the European Union and Angola. The negotiations concerning the said agreement were concluded in November 2022.
The choice of Angola as an economic partner has been strongly influenced by the abundance of raw materials and energy resources on its territory. For the EU, Angola is the 7th largest investment destination in Africa and its investment stock in the EU in 2020 amounted to €2.4 billion.
The proposed legal bases of the agreement are Article 207 TFEU(4) and 218(6) TFEU. This is in line with Opinion 2/15 delivered by the EU Court of Justice, in which the objective of sustainable development was recognised as an integral part of the common commercial policy of the EU (CCP).
The novelty in this agreement is, in fact, the integration of environmental concerns and labour rights in the broader framework of the EU-Angola relationship aimed at boosting investments. In line with the Cotonou Agreement, the new EU-OACPS Partnership Agreement (post-Cotonou Agreement) and the Investment Facilitation for Development Agreement (negotiations are ongoing in the WTO), the agreement includes elements of traditional economic partnership, such as the diversification of Angola’s economy to new areas (especially, exports of coffee and tropical fruits), the improvement of public officials’ accountability while giving more weight to civil society’s concerns, and clearer rules to increase legal certainty for investors. Yet, this agreement also covers new commitments in terms of environmental and labour standards, such as the ones included in the Paris Agreement, corporate social responsibility and responsible business conduct (as supported inter alia in the UN Guiding Principles on Business and Human Rights), investment-related impacts on climate change and gender equality. These commitments are reciprocally binding investors on both parts. The EU-Angola SIFA is expected to enhance transparency and predictability of investment-related measures, such as providing accessible information for investors; to simplify investment authorisation procedures; and, to establish focal points and consultations between investors and the administration.
This agreement is part, on the one hand, of the Global Gateway strategy of the EU to pursue sustainable investment agreements with Africa and the Southern Neighbourhood. On the other hand, it is another step towards deepening the specific partnership with Angola, which is also joining the Economic Partnership Agreement (EPA) between the EU and the SADC EPA Group (including Botswana, Lesotho, Mozambique, Namibia, South Africa and Eswatini). More generally, concluding investment facilitation agreements also contributes to the Union’s role in the achievement of the UN’s 2030 Sustainable Development Goals by setting more stable conditions for small and medium-sized businesses to invest in foreign countries and by providing economic partners with the possibility to diversify their economy.
The next step for the EU-Angola SIFA is the signature of the agreement by the Union and Angola, whose conclusion also entails for the EU the consent of the European Parliament. If successful, this will be the first EU’s SIFA proving the tight and evolving relationship between trade and investment, as two sides of the same coin, coupled with sustainable goals. It remains to be seen, however, to what extent the novelty of this instrument will have a concrete impact on both EU’s economic partners and EU investors.
Reproduction autorisée avec la référence suivante : Sara Notario, The EU’s first sustainable investment facilitation agreement, actualité du CEJE n° 35/2023, 13 octobre 2023, disponible sur www.ceje.ch