CSO Proposals on the Amendment of the Investment Code Act, 2019

In 2019, the Government of Uganda amended the Investment Code Act (the “Act”) to replace the previous Code which was enacted in 1991 and was long overdue for amendment given the changes in approach to attracting investment and the glaring weaknesses in the old Code. The core objective of the new code is to strengthen the Uganda Investment Authority (the “Authority”), establish it as a one-stop investment centre, and also provide for the financing and auditing of the Authority. The Code also aligns the provisions on protection from expropriation with the Constitution, providing for prior payment of compensation. The Code also expressly provides for the removal of the now titled Director General (previously the Executive Director), an area that saw some contention under the old Code. 

During the amendment of the Investment Code Act (2019), there was limited consideration of inserting substantive and effective human rights clauses hence leaving the code unbalanced in terms of balancing the rights of the citizens, state, Investors, communities and the environment. To this end, multinational corporations have taken advantage of the gaps within the investment code to practice human and environmental rights violations within the host communities. 

It is therefore of crucial importance that the Government rethinks re-amending the current Investment Code Act 2019 to enable Foreign Direct Investment to deliver on its promises, provide certain safeguards to the affected parties, especially to the vulnerable and marginalized groups and also strike a balance between business and human Rights. In the same light, the outbreak of covid-19 presents us with an opportunity to accelerate economic growth and development thus building back better from the negative effects the pandemic had on the economy. It is against this background that we call for the amendment of the Investment Code Act of 2019. We are concerned about some of the provisions in the Investment Code and the gaps therein and we, therefore, wish to make the following observations and recommendations; 

¹