Isolation is not a joke: Leaving the ICSID would be a bitter mistake
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- Therefore this cannot be Albania’s choice. It cannot even be a bluff or a joke. Companies and investors make careful notes of such statements and register meticulously these facts in their business plans.
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TIRANA TIMES EDITORIAL
Albania’s troubles with the International Centre for Settlement of Investment Disputes (ICSID) seem to be expanding well beyond the infamous case of settling over the closure of Agon Channel and the hefty fine of 120 million euros that the country has to pay up to Italian investor Francesco Becchetti.
The most recent case involves a complaint registered by the German company EMS Shipping & Trading which has turned to ICSID to denounce an alleged infringement of its own contract of managing the Durres port, now that a lucrative deal has been signed with EMAAR Company to turn the port into a yacht marina and associated private villas, apartments and malls.
The recorded case logged on April 7 is based on the current ongoing concession that EMS Shipping & Trading has for the eastern terminal in the Durres port, a concession valid for 35 years and which started in 2013. This leaves at least 25 more years of operating for the company which will soon see its business wrap up once the construction from Emaar starts.
With an average annual profit of 1.3 million euro one can only imagine what would be the damage to the Albanian state if this company succeeds in its claim at the ICSID.
Albanian Prime Minister Edi Rama has mentioned that Albania may consider withdrawing itself from the jurisdiction of the ICSID. This can be a real move or a verbal maneuver to divert attention and show some strength. In both cases it’s a big mistake.
First and foremost withdrawing Albania from the ICSID would not recover the country one cent from what it has lost, on the contrary it would scare away all companies that would consider making investments here and which would like to enjoy the legal protections of a neutral, international dispute entity.
Albania has had serious issues and failures in attracting FDI. Its deteriorating business climate, observed by numerous reports of chambers of commerce, such as the American and German ones in the country, is not helping. Giving the signal of avoiding accountability and not being responsible to anyone else but themselves Albanian decision-makers are in fact giving a signal to investors, at least those in the western world to make different risk calculations when considering Albania.
Second, the country is in the process of accession negotiations with the European Union. The engagement and commitment to various dispute settlement policies and rules will only increase as the country seeks to anchor itself to the larger EU market and operate according to its regulations. This means more compliance and not less. Showing disregard for international norms would be another signal to the EU that Albania does not intend to play by the rules. The citizen might be more familiar with the political criteria but the economic one is just as important, if not more, in the path to membership.
Therefore this cannot be Albania’s choice. It cannot even be a bluff or a joke. Companies and investors make careful notes of such statements and register meticulously these facts in their business plans. This bitter joke affects only Albania itself.
