Constitution vs investment: The real test in Dangote oil refinery project

President William Ruto alongside Aliko Dangote in the groundbreaking of Lamu Oil Refrinery.[PCSS]

There is an old African saying that when two elephants fight, it is the grass that suffers. But sometimes the wiser lesson is that when two powerful interests meet, the community must never be reduced to grass. The unfolding controversy around the proposed Dangote project in Lamu therefore raises questions much bigger than whether one industrial project should proceed or stop.

At its heart lies a difficult but important discourse: how does Kenya protect foreign investment while simultaneously protecting the environment, community rights and the Constitution? The debate deserves space. It deserves evidence. Above all, it deserves civility as we do so.

The Dangote proposed Oil refinery investment represents the promise that large-scale African capital can cross borders and contribute to industrialisation on African soil. Kenya has every reason to attract investment, create employment, expand manufacturing and develop infrastructure. International investment law itself is built around the idea that investors should not be subjected to arbitrary or discriminatory treatment. Depending on the applicable treaty and circumstances, investors may receive protections such as fair and equitable treatment, protection against unlawful expropriation, and national or most-favoured-nation treatment. But investment protection cannot also be a magic shield against the domestic legal framework.

The modern understanding of international investment law increasingly recognises that governments retain a legitimate right to regulate in the public interest. Environmental protection is among the clearest examples. The so-called police-powers doctrine, reflected in contemporary investment jurisprudence and studies, recognises that bona fide, non-discriminatory regulation undertaken for legitimate public purposes will not automatically amount to compensable expropriation. Likewise points towards a closer relationship between investment protection and sustainable development.

That distinction matters greatly in Lamu. The Constitution does not treat the environment as a footnote to economic development. Article 42 guarantees every person the right to a clean and healthy environment. Article 69 places environmental obligations upon the State, including sustainable exploitation, utilisation, management, and conservation of the environment and natural resources. Article 10 further identifies public participation as a national value and principle of governance. These form an important part of the constitutional bargain when Kenyans are having this discourse.

The Environmental Management and Co-ordination Act provides for environmental-impact-assessment requirements, giving practical effect to that constitutional framework. Environmental decision-making is therefore not per se a technical exercise of ticking boxes. Questions of consultation, information, environmental risk, mitigation and public participation can become questions of constitutional governance.

This is where the Lamu conversation becomes particularly interesting. If a project is challenged because its environmental consequences have not been adequately considered, that challenge should not automatically be understood as hostility to investment. Equally, the existence of environmental objections should not automatically mean that an investor has acted improperly. The task of the court is precisely to separate legitimate regulatory concerns from unsupported allegations and to determine whether the relevant authorities followed the law.

An African proverb says, ‘until the lion has a historian, the hunter will always be the hero’. In modern environmental governance, communities must have a meaningful opportunity to tell their side of the story. Public participation should never be confused with giving every objector a veto. Its purpose is to ensure that decisions affecting communities are informed by the people who will live with their consequences.

There is another side to the equation. Investors also require certainty. A country cannot invite investment with one hand and then subject investors to unpredictable, discriminatory or arbitrary treatment with the other. If government agencies give lawful assurances, issue approvals and establish legitimate expectations, those actions can become relevant under investment-protection principles. At the same time, an investor entering Kenya enters a constitutional order.

Compliance with our environmental, land, planning, labour and other laws is part of doing business in Kenya. This is where international investment law and constitutional law can appear to pull in opposite directions, although they need not necessarily do so. The Constitution speaks in the ‘lingua’ of rights, participation, accountability and sustainable development. Investment law speaks in the language of protection, certainty and fair treatment. The sensible approach to allow these principles to live side by side when dealing with an investment project.

Indeed, contemporary African investment thinking is increasingly concerned with this balance. Within the African Continental Free Trade Area, the investment framework is viewed as part of a broader movement towards investment that contributes to sustainable development rather than merely protecting capital. African states increasingly seek investment that creates value while preserving regulatory space for public-interest objectives. That brings us to the language used in the current controversy. If litigants are described as people who merely want to ‘bring trouble,’ as Aliko Dangote did, the statement may deepen rather than resolve the dispute. Litigation is not, by itself, evidence of hostility to development. In a constitutional democracy, approaching a court is one of the lawful ways citizens challenge governmental or corporate decisions. Conversely, a court case as the one filed should never always be seen a weapon for paralysing legitimate development without evidence.

People, the national government, county authorities, environmental regulators and the investor all have legitimate interests that deserve consideration. The question is whether those interests can be reconciled through transparent processes, credible environmental assessment, genuine participation and adherence to the law.

Africa has learnt, sometimes painfully, that development without justice can plant the seeds of future conflict, as we see with the resource curse in so many African states. The Lamu debate therefore presents Kenya with an opportunity. The country can demonstrate that attracting investment does not require weakening constitutional protections, just as environmental protection does not require closing the door to responsible investment. The real test is not whether Kenya chooses investment over the environment, or the environment over investment. The real test is whether Kenya can show that investment and constitutionalism can sit under the same tree.

That is the conversation Lamu deserves. It is only on this dual lens that this discourse can be beneficial for future projects.