Transparency of the Regulatory System
The Competition Act of 2003 establishes the legal framework to “safeguard and promote competition in the Namibian market.” The Competition Act establishes a legal and regulatory framework that attempts to safeguard competition while boosting the prospects for Namibian businesses and recognizing the role of foreign investment. The act is intended to promote:
- The efficiency, adaptability, and development of the Namibian economy;
- Competitive prices and product choices for customers;
- Employment and advancement of the social and economic welfare of Namibians;
- Expanded opportunities for Namibian participation in world markets;
- Participation of small enterprises in the economy by ensuring a level playing field; and
- Greater enterprise ownership particularly among the historically disadvantaged.
The act established the Namibia Competition Commission (NaCC), which was officially launched in December 2009. The NaCC has the mandate to review any potential mergers and acquisitions that might limit the competitive landscape or adversely impact the Namibian economy. The Minister of Industrialization, Trade, and SME Development is the final arbiter on merger decisions and may accept or reject a NaCC decision. Any investor can file an appeal with the ministry, though no formal process for doing so has been established.
On December 31, 2015, the Namibian government published the Public Procurement Act of 2015, which is more in line with international standards and aims to ensure greater transparency in public procurements by government entities, including state-owned enterprises. The act entered into force in April 2017.
Draft bills and proposed legislation are normally not available for public comment. Bills are customarily drafted within the relevant ministry with minimal stakeholder or public consultation and then presented to the parliament for debate.
International Regulatory Considerations
Namibia is a member of the International Organization for Standardization. The coordinating bureau for standards in the country is the Namibian Standards Institution. As a member state, Namibia’s regulations conform to SACU and SADC agreements. Namibia is a member of the World Trade Organization (WTO) and notifies the Committee on Technical Barriers to Trade on draft technical regulations.
Legal System and Judicial Independence
The Namibian court system is independent and is widely perceived to be free from government interference. Namibia’s legal system, based on Roman Dutch law, is similar to South Africa’s. The system provides effective means to enforce property and contractual rights, but the speed of justice is generally very slow.
Laws and Regulations on Foreign Direct Investment
The FIA provides for liberal foreign investment conditions and equal treatment of foreign and local investors. With limited exceptions, all sectors of the economy are open to foreign investment. There is no local participation requirement in the FIA, but the Namibian government is increasingly emphasizing the need for investors to partner with Namibian-owned companies and/or to have a majority of local employees in order to operate in the country.
The FIA reiterates the protection of investment and property provided for in the Namibian constitution. It also provides for equal treatment of foreign investors and Namibian firms, including the possibility of fair compensation in the event of expropriation, international arbitration of disputes between investors and the government, the right to remit profits and access to foreign exchange.
Competition and Anti-Trust Laws
The Namibian Competition Commission (NaCC), established in 2009 under the Competition Act of 2003, is responsible for reviewing mergers (foreign and domestic) to safeguard and promote competition in the Namibian market.
Expropriation and Compensation
The Namibian constitution enshrines the right to private property but allows the state to expropriate property in the public interest. The Agricultural (Commercial) Land Reform Act 6 of 1995 (ACLRA) is the primary legal mechanism allowing for expropriation, but the government has adhered to a “willing seller/willing buyer” policy as part of land reform programs. In 2004, the government announced it would proceed with land expropriations after much criticism about the slow pace of land reform. Three farms were expropriated as part of the effort. Court decisions mandated sizeable compensation to land owners, and the government quickly returned to its “willing seller/willing buyer” policy. The Namibian constitution makes pragmatic provision for different types of economic activity and a “mixed economy” (Article 98), accepts the importance of foreign investment (Article 99), and enshrines the principle that the ownership of natural resources is vested in the Namibian state (Article 100). Section 11 of the FIA reiterates the commitment to market compensation in the case of expropriation in terms of Article 16 of the Constitution. Holders of a Certificate of Status Investment must be compensated in foreign currency and can opt for international arbitration if any disputes arise.
ICSID Convention and New York Convention
Namibia signed but has not ratified the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID). The ICSID and New York Convention are therefore not applicable.
Investor-State Dispute Settlement
The FIA allows for the settlement of disputes by international arbitration for investors that have obtained a Certificate of Status Investment (CSI) that includes a provision for international arbitration. The FIA stipulates that arbitration “shall be in accordance with the Arbitration Rules of the United Nations Commission on International Trade Law in force at the time when the Certificate was issued” unless the CSI stipulated another form of dispute resolution.
International Commercial Arbitration and Foreign Courts
As the “one-stop-shop” for investors, the Namibia Investment Centre (NIC) should be the body that first learns of an investment dispute between a foreign investor and a domestic enterprise. The NIC has not yet received a report of an investment dispute. Investment disputes can be handled by the courts.
There is no domestic arbitration body in Namibia. Investors without a CSI that encounter a dispute have to address their dispute in the Namibian courts or in the court system which has jurisdiction according to the investor’s contract. The Namibian court system is independent and is widely perceived to be free from government interference, including when SOEs are involved in investment disputes.
The Companies Act of 1973, amended in 2004, governs company and corporate liquidations while the Insolvency Act 12 of 1936, as amended by the Insolvency Amendment Act of 2005, governs insolvent individuals and their estates. The Insolvency Act details sequestration procedures and the rights of creditors. Through the law, all debtors (whether foreign or domestic) may file for both liquidation and reorganization, and a creditor may file for both liquidation and reorganization.