The black gold rush in Namibia and its implications for the investor–state dispute settlement

9 November 2026 – Namibia stands at a crossroads in its development trajectory. As the country pursues ambitious green industrialisation plans, major offshore oil discoveries are simultaneously positioning it as a potential new petroleum producer. These competing ambitions, coupled with uncertainty in global energy markets and evolving climate commitments, raise important questions about Namibia’s long-term development pathway and its ability to adapt to changing priorities.

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This paper from the University of Cambridge Institute for Sustainability Leadership (CISL) examines how Namibia's existing bilateral investment treaties and domestic investment laws could expose the country to costly investor–state dispute settlement (ISDS) claims. Drawing on international arbitration cases and an analysis of Namibia's investment governance framework, it explores how such claims, or even the threat of arbitration, could create significant fiscal liabilities and contribute to regulatory chill, discouraging governments from adopting measures in the public interest.

The paper identifies opportunities to reform Namibia's investment governance framework, strengthen accountability and safeguard the country's sovereign right to regulate, ensuring that investment commitments do not undermine its ability to pursue evolving environmental, climate and development priorities.

Key insights

• Namibia's development pathway is at a crossroads. Its ambitions to become a major offshore oil producer, alongside its green industrialisation agenda, are unfolding amid shifting political priorities, uncertain global energy markets and evolving climate commitments. Preserving the flexibility to adjust its energy and development policies is therefore critical.
• Namibia faces overlapping legal risks under its investment governance framework. Eight older-generation bilateral investment treaties (BITs) remain in force, while the Foreign Investments Act of 1990 provides a separate route to international arbitration for qualifying investors. 
• Namibia's non-ratification of the ICSID Convention does not eliminate its exposure to investor claims. Four BITs provide alternative routes to international arbitration, while major petroleum investors operating through Dutch subsidiaries could potentially benefit from protections under the Namibia–Netherlands BIT.
• Investment treaties can constrain public-interest regulation long after investments are made. Broad investor protections, limited environmental safeguards and sunset clauses extending up to 20 years after treaty termination could expose Namibia to substantial compensation claims. Even the threat of arbitration can contribute to regulatory chill, discouraging governments from pursuing environmental, climate and natural-resource governance reform required for a just energy transition.  
• Domestic legislative reform is critical to reducing Namibia’s exposure to investor–state dispute settlement (ISDS), but it is insufficient on its own. While reforms can restrict future access to international arbitration under domestic law, existing bilateral investment treaties continue to create independent legal obligations and potential liabilities. 
• Safeguarding Namibia’s regulatory autonomy therefore requires a coordinated approach to domestic legislative reform and the renegotiation or termination of outdated investment treaties, including addressing the prolonged exposure created by sunset clauses.
• Continued foreign investment despite regulatory uncertainty challenges the assumption that extensive investor protections are necessary to attract capital. Namibia can leverage its resource wealth to negotiate more balanced investment arrangements that protect its sovereign right to regulate while supporting responsible investment. 

This paper contributes to CISL Africa's work on supporting Africa’s just and sustainable transition. It shows that a just and fair transition does not only depend on finance and leadership, but on African states retaining the policy space to change course.