The Ethiopian Investment Commission (EIC) has launched a new complaint system that will be handling grievances from investors in a standardised manner. The grievance management procedure aims at ensuring the timely resolution of investment grievances that occur in the post-implementation phases.

Dubbed the Investment Grievance Management Procedure (IGMP), the programme was carried out with technical support from the International Finance Corporation (IFC) and the financial support of the UK Foreign, Commonwealth & Development Office (FCDO). Reporting directly to the commissioner, the unit has an early warning and tracking mechanism to identify problems that arise around investments.

Two-thirds of investors consider withdrawing or cancelling their investment in the face of political risk or exposure, according to a study presented by the Commission during IGMP's virtual launch. The same research showed that 42pc of investors consider the legal environment a critically important factor and the lack of a standard grievance management procedure may push investors to consider the withdrawal or cancellation of investments and expansion plans.

The systematic grievance management procedure has been set up to address these challenges early on, according to a statement from the Commission.

The unit has been informally operational since early 2019. Still, it gained its legal mandate following the legislation of the issuing of the investment proclamation in January 2020, according to Lilanie Gudeta, team leader of the Unit. Since early 2019, although operating informally, the IGMP has managed 12 grievances, five of which have been successfully settled. It also has managed to save around 239 million Br in investments and around 590 jobs.

"The main goal of the system is to retain investment," said Lilanie.

In the past, different management procedures have been practised to settle pre-implementation and post-implementation grievances. One of these is the After Care Unit, which was set up to handle post-implementation issues and has now had its responsibilities shifted to address grievances that are not to be solved through the new unit.

Once an investor files a complaint, the nature of the issue and the status of the investor is analysed. If the disagreement occurred due to an administrative decision by a federal body that may include a misinterpretation of legal laws and regulations, international agreements or breach of contract, the grievance is referred to the new unit. Otherwise, the complaint is directed to the After Care unit.