OROMIA STATE UNIVERSITY SCHOOL OF LAW

DEPARTEMENT OF GRADUATE STUDIES

WEEKEND PROGRAM

A RESEARCH PROPOSAL SUBMITTED FOR ADVANCED LEGAL RESEARCH

TITLE: Ethiopian Investment Policy-legal frame work in Light of Environmental

Concern; The Case of Share Ethiopia Flower Farm Company

Submitted By :-Jemal Ukusa

Presented to: Shimelis Ashagire, (PHD, Ass. Professor)

Advanced Legal Research Class

Year: 2nd

OSU: Shashemene Center

Jun, 2021

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NTRODUCTION

1.1, Background of the study

With an impressive economic growth over the last decade, Ethiopia is making itself
of the major destinations of investments especially foreign direct investments in
Africa. The whole effort of attracting foreign investments to Ethiopia is premised on
assumption that it will lead to economic growth, employment opportunity, transfer
of technology and knowledge and etc. This can be seen from national investment
laws and policy and from different bilateral investment treaties Ethiopia has so far
signed. Since Ethiopia is one of the fastest growing economies in the world endowed
with rich natural resources, cheap human labor, stable in terms of peace and security
and suitable infrastructure facilities for investments, it has been catching the eyes of
many investors.

Consequently, foreign investments in general and foreign investments in flower

producing farms in particular, have been growing in the country attracting the
attention of world’s big economies of which China, India and Holland are some
instances.

The relationship between international foreign investments and the environment has
been a preoccupation of various scholars and institutions for decades. Accordingly,
there have been conflicting researches on the impact of foreign direct investments on
the Environment of the host state and the dominant view in this regard is the
pollution hypothesis postulating that foreign investment seeks developing countries
with lax environmental laws and enforcement 1. On the other hand, the flower
farming investment is growing in Ethiopia which is the second largest rose exporter
in Africa and the sixth in the world currently.

The flower farm companies in Ethiopia currently produce a number of flowers;

including rose, gypsophila, Hypericum, limonium, carnations, and chrysanthemum.
Rose is the most widely produced flower species by most of these companies and by
the Share Ethiopia Flower Farm Company in particular.

1
US Department of State; Ethiopia Investment Climate (2015); Accessed as of June 20, 2018.
https://www.state.gov/documents/organization241767 pdf
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Despite the industry’s significant contribution to the national economy, many issues
are raised by environmentalists’ that are related to the expansion of flower farming
sector and the adverse effect of pesticides and chemical fertilizers, disposal of waste
materials, and pollution of water bodies2. When rapid development threatens
Ethiopians’ environmental health, the people must decide whether the immediate
economic benefits are worth the environmental damage. However, some optimists
say that economic development “need not” harm the environment at all, or that
environmental damage in fact will result from lack of development and so the
matter becomes the current, most crucial and controversial question drawing the
attention of policy makers, academicians, legal practitioners and the society at large.

As part of the controversy, the investment – environment relation with regard to the
Share Ethiopia Flower Farm Company, the largest flower company in the country,
has been debating and even inciting public protests some times since its arrival in
the country among the peoples living in the locality, the public authorizes concerned
and the administration authorities of the company. The company has several
branches/project cites in different parts of the country with its largest and principal
flower production center located in Adami-Tulu District of East Shao Zone and
Zeway/Batu Town.

The residents of the area, particularly, residents of Zeway/Batu Town have been
complaining, since seven or six years ago, the company’s flower investment alleging
that it has been polluting the water of Zeway Lake and adversely affecting the flora
and fauna living in and around the lake, seriously threatening the health and life of
the peoples and cattle, and adversely damaging soil and the soil fertility. Further, it
is now a matter of public knowledge that the residents of Zeway Town and the
surrounding rural areas have stopped drinking the water service supplied by the
Town since six years ago.

Therefore, this research study is inspired by the above stated controversy and
intending to review the Ethiopian investment policy and laws in relation to flower
farming industry and their impact on the environment with specific focus being had
on the case of Share Ethiopia Flower Farm Company.

1.2, Statement of the problem

As far as the impacts of the flower farming investments in Ethiopia in general and
the Share Ethiopia Flower Farm Company in particular, are concerned, several social
science and medical science researches have so far been made and all of them have
found out and listed down in detail the impacts this investment has had on
environment such as; medical, biological, reproductive, socioeconomic and
2
Asamnew D. gizew; Ethiopia’s Bilateral Investment Treaties and Protection of Environment
(2017) (Unpublished LLM thesis) p.2
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gynecological adverse impacts. On the other hand, the environmental policy and
pertinent legislations of the country provide for the ways and means as to how to
prevent or at least control environmental pollution and any other adverse impacts to
environment.

In this view, the fundamental economic/development, environmental and

sociocultural principles and objectives enshrined in the FDRE Constitution, the
environmental authority/Agency establishment proclamation, the environmental
pollution control proclamation and the environmental impact assessment
proclamation are some of the laws to regulate the investment – environment
relationship in the country. In addition, the country’s investment policy and its
pertinent specific investment legislations and the relevant bilateral or multilateral
investment treaties signed by Ethiopia are assumed to be compatible to and
consistent with those fundamental constitutional principles and objectives and,
environmental policy and legislations as regard to environmental conservation and
protection.

Based on such general assumption, the first problem states/asks whether or not the
country’s investment policy and legislations are in integration to environmental
policy objectives and legal rules because some sources assert that the negative
environmental impacts of the flower farm investments briefly stated above were
basically caused because of the incompatibility of the investment policy and
legislations with the environmental policy and legislations. In other words, it means
that there is non-integration between the investment policy and laws on one hand
and environmental policy and legislations on the other. Hence, it is in contradiction
to the integration principle of sustainable development.

Similarly, the Ethiopian investment policy and legal framework itself is criticized for
being pro investment and investors more than necessary as argued by some sources
which assert that investment policy and laws provide unreasonable incentives for
investors while Ethiopia has geographical advantages for a flower farming
investments, the vast unexploited arable land and the conducive climate for flowers
in addition to the large low-cost labor market together are very attractive for the
industry3. This also indicates the problems as to whether the Ethiopian investment
policy and legal frame work unnecessarily inclines/favors flower farm investments
at the adverse environmental costs.

Further, despite the flower farm investments significant contribution to the national
economy, many problems are also raised by environmentalists’ that are related to
the expansion of flower farm investment sector and the adverse effect of pesticides

3
Messay Adugna Kassa; Review on Environmental Effects of Ethiopian Floriculture
Industries, Asian Research Journal of Agriculture, Vol. 4 No. 2 (2017) p. 2
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and chemical fertilizers, disposal of waste materials, and pollution of water bodies.
For example, Ministry of agricultural development has stated that more than 300
chemicals as pesticides and growth regulators are used in flower farms. It believes
that excessive pesticide is getting into water bodies damaging the biodiversity and
chemicals are killing useful organisms in the soil4.

Furthermore, environmentalists are also worried that waste materials can damage
the environment, will get into the soil, into water bodies or be used by people and
cause serious damage. Flower investment is also known for using a large volume of
water resulted in shrinking of surface and underground water and companies such
as Rose Ethiopia and Garad Flowers (sub-flower investors of the Share Ethiopia
Flower Company) are some examples causing shrinkage of water 5.

1.3, Objectives of the study

1.3.1, General objective

The general objective of this research is to analyze and evaluate the Ethiopian
investment policy and legal frameworks in light of the environment related
principles of sustainable development with specific reference to the case of Share-
Ethiopian Flower Farm Company.

1.3.2, Specific Objectives

The following are the specific objectives of this study:

 To review the basic principles and rules of the Ethiopian investment policy
and its relevant legislations applicable to flower investments in general and
the Share-Ethiopia Flower Farm Company,
 To review the fundamental principles and rules of the Ethiopian
Environmental policy and that of the pertinent environmental legislations as
relevant to the flower farm company in focus,
 To examine and evaluate the national investment and environmental legal
frame works in light of the fundamental principles of sustainable
development,
 To inquire and identify the Share-Ethiopian Flower Farm Company’s adverse
impacts on environment and know whether the impacts are attributable to the
investment and environmental policies and legislations or to the practical
implementation of the laws and,
 To search and recommend the appropriate policy or legal measures

4
Ethiopian Investment Commission, Ethiopia; A preferred Location for Foreign Direct
Investment in Africa, An investment guide (2014) P. 11
5
Mesay Adugna Kassa, cited at note 3 above pp. 2-3
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1.4, Research questions of the study
1.4.1, General question

The general research question of this study asks whether or not the Share-Ethiopia
Flower Investment Company has any adverse impacts on environment and if it has
any environmental impact whether or not the impact(s) is attributable to the
policy/law or to the practice.

1.4.2, Specific questions

This study will try to answer the following specific questions:

 Is Share-Ethiopia Flower Farm Company’s flower producing investment

affecting the environment and if it is so doing what are the core
environmental impacts?

 If the flower investment company under this study has any environmental
impact(s), is it/are they due to the policies/laws or attributed to the problem
of putting the policies/laws in to practice?

 Is the Ethiopian investment policy/law in integration with the Ethiopian

environmental policy/laws in light of the fundamental principles of
sustainable development?

1.5, Methodology of the study and sources of data

This study will adopts and follows different methods of study appropriate and
necessary to properly answer the research questions set forth above. Accordingly,
the study will use the doctrinal method to answer specific research questions stated
in #2 and #3 herein above through theoretical and logical analysis of the relevant
rules and principles of the Ethiopian investment laws and environmental laws
against the relevant international principles of the sustainable development policy.

Similarly, the qualitative and quantitative data collection and analysis will also be
used in this research particularly in relation to answering the specific research
question under #1 of the specific research questions mentioned above. In this view,
interviews will intensively and extensively be made with the relevant
environmental, investment and other appropriate public authorities, the concerned
administrative organ of the company under this study and professional experts from
other relevant disciplines such as health science, environmental science and etc.

In addition, relevant documents such as laboratory examinations, license/permit,

different administrative and regulative letters and etc will be collected or consulted.
Judicial orders and/or decisions relevant to the questions of this study will also be
used in the conduct of this study. Lastly but not least, person, property, animal or
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any environmental unit injured by the flower farm investment or found to be victim
of it will be consulted, observed or otherwise interviewed as deems appropriate.

1.6, Significance of the study

The proposed study attempts to clarify some of the key issues revolving around
Administration of environmental Justice in Ethiopia.

The study will first provide some additional insight into definitions and
conceptualizations of investment law, environment law and sustainable
development and the relationship among them.

Secondly, the findings will provide a means for examining the feasibility of
currently adopted integrative approach in the administration of environmental
justice so as to achieve the basic objective of the sustainable development policy by
protecting environment on one hand and promoting development on the other.

Moreover, the challenges this mode of administering investments and

environmental justice encumbers are to be identified with a view to see how best one
can utilize it in policy considerations. In addition, it contributes in the debate
concerning environmental issues and may also serve as a reference for those who are
interested in the study of investment and environment relationship in general and
particularly in the flower farming investment context.

1.7, Scope of the research

This research

1.8, Ethical considerations

During data collection which requires permission of individuals or authority, the

researchers will take due care to get the permission and to properly preserve and
take appropriate measures to any possible harmful information during the data
collection process.

The researchers will also guarantee to handle data properly so that it does not fall
into the hands of other researchers who might appropriate it for other purposes.
Further, in the interpretation of data, the researchers will provide an accurate
account of the information and will not use language or words that are biased
against persons because of racial, ethnic, belief or other similar grounds.

1.9, Organization of the study

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The thesis contains a total of five chapters. The first chapter is an introductory part.
The second chapter deals with the definition, purpose, and historical development of
investment and environment relationships with special emphasis on flower farm
investments in Ethiopia, and the fundamental principles of sustainable development.
In chapter three, survey of the international and national legal regimes for the
administration of investment and environment is made with an additional review on
the investment and environmental policies of Ethiopia.

The relationship between Ethiopian investment law and environmental law, the
consistency and compatibility among them and with the fundamental principles of
sustainable development, their integrative administration approach and, their
practical implementation in Share-Ethiopia Flower Farm Investment Company
together with the company’s investment impact(s) on the environment will be
discussed in chapter four.

Chapter five is the last chapter devoted to the conclusions and recommendations.
Accordingly, it provides a holistic overview of the study, draws together the
questions that are raised, the findings finally discovered, the conclusions reached at
and the appropriate solutions to be recommended.

Tentative table of contents

Chapter I: Introduction
1.1, Background of the study
1.2, Statement of the problems
1.3, Objectives of the study
1.4. Research questions
1.5, Methodology and sources of data
1.6, Significance of the study
1.7, Ethical considerations
1.8, Organization of the study
Chapter II: Definition and conceptual analysis of investment and environment
2.1, Definition and conceptual overviews of the investment and environment
2.1.1, Definition of investment and environment
2.1.2, Conceptual/theoretical foundations of environmental law
2.2, Investment and environmental legal regimes; Respective historical
development and purposes

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 2.2.1, Historical development
2.2.2, The purposes of investment law and environmental law
2.3, Conceptual overview of the sustainable development
Chapter III: International and national legal regimes
3.1, International legal regimes governing investment and environment
3.1.1, International trade and investment law
3.1.2, International environmental law
3.2, National legal regimes
3.2.1, Constitutional principles and policy frame works
3.2.2, Ethiopian investment legislations
3.2.3, Ethiopian environmental laws
3.3, Establishment and administrative regulations of the Share-Ethiopia
Flower Farm Company
Chapter IV: Analysis of legal and practical problems on the Ethiopian investment
policy/law; the case of Share-Ethiopia Flower Farm Company
4.1, Analysis of policy/legal problems
4.1.1, Incompatibility of the investment policy/laws with the environmental
policy/laws
4.1.2, Non-compliance to the fundamental principles of the sustainable
development.
4.2, Analysis of practical problems
4.2.1, Non-observance of the company’s environmental duties and
obligations provided by the law
4.2.2, In-activeness and non functionality of the Environmental
authority/agency
4.2.3, Disregard of environmental responsibility by the investment authorities
4.3, Analysis of the Company’s impacts on environment
Chapter V: Conclusions and recommendations
5.1, Conclusions
5.2, Recommendations.

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