BACKGROUND TO THE STUDY

Foreign direct investment (FDI) rose to prominence in the late 19th and early 20th centuries. Even back then, a bigger fraction of foreign investments took the form of portfolio investments, so it constituted a relatively small portion for decades.  For instance, in 1914, portfolio investments accounted for 90% of all foreign capital inflows.  However, over time, the nature of foreign investments gradually shifted. Actually, in the 1920s, FDI made up around 25% of all foreign investment flows. The Great Depression and World War I combined with the collapse of the global monetary system in the 1930s to cause a fall in portfolio holdings.

In order to draw international investment into the country when colonialism ended, Cameroon, like other former colonies of France and Britain, relied on the legislation it got from those overlords. It established trading ties with its previous colonial masters, Britain and France, by utilizing several clauses of the Treaty of Rome that favored overseas colonies.[1]

In order to attract the investment necessary for economic progress, Cameroon passed its first investment code in 1960, the year it gained independence. The aforementioned investment code had to be updated two decades later since the global economy had changed and rendered it obsolete. On July 4, 1984, a second investment code was created because the first one no longer met the needs of the state.[2] Unfortunately, both investment scripts had flaws and needed to be corrected.

Multinational Corporations (MNCs), which have been recognized over the years as the principal channel for transmitting FDI to developing nations, are often where investment flows from one country to another take place. According to Kenneth Mwenda[3], extensive research has been done to learn more about the reasons behind and effects of the rapid rise of FDI on home countries, host countries, the global economy, and the political system.[4]

Bilateral, regional, and multilateral agreements help the flow of FDI between nations and regions. Cameroon became an active member of numerous regional and economic organizations, including the Central African and Economic Community (CAEC) and the Organization for the Harmonization of Business Law in Africa (OHADA), in order to guarantee the peaceful expansion and development of its economy (CEMAC). Many regional agreements’ primary goal is to draw in investment. Thus, Cameroon’s participation in regional and economic organizations—particularly those described above—is motivated by a desire for bigger markets, more intense rivalry, and enhanced policy legitimacy, all of which will increase the incentives for investment.

The study examines the investment of MNC in community development projects in Cameroon using the case study of the TOTAL Cameroon. It assess the value of MNC supported community development projects as an expression of demonstrating cooperate social responsibility and legitimacy to operate at different regions of the country. This is undertaken within the context of growing demands from various stakeholders for MNCs to be more socially responsible. Yet, despite the effort, these MNCs are making to give back to communities, many people still believes that the main objective of these cooperation is to exploit the economies of Africa in general and Cameroon in particular

Consequently this work is aimed at evaluating the realization or effectiveness of this protection under Cameroonian law.

• STATEMENT OF THE PROBLEM

Understanding the essence of foreign companies in Cameroon and its effect on economic growth in Cameroon has become a global phenomenon. In the light of this, there has been increasing attention to what indicators to look out for in the valuation of economic growth in Cameroon. From researches, it is being noted that, less attention has been laid on foreign companies activities and its contribution to the growth of the Cameroonian economy that is on: employment, infrastructures, goods and services, local firms and GDP. Some believe foreign companies are agents of imperialism while others believe foreign companies are agent of growth and development. These controversies are due to lack of proper understanding of the nature and workings of foreign companies. As a result, the judgment of the government and the people are from personal perspectives. Cameroon Government give more preference to foreign companies by aviating them from tax payments.That is they are being given a certain amount of money to pay and as such they can escape tax for about 10-15years, foreign companies takes advantage of home based companies and lay more cost on their customers who pay their taxes indirectly.

Cameroon has enacted some laws in that domain like the 1960, 1984, 1990 and the 2002 investment codes. Cameroon has also signed several bilateral, regional as well as multi-lateral treaties for the protection of foreign companies. For instance the OHADA[5], CEMAC[6] and several others.

Despite these legal instruments enacted and the several multi-lateral treaties signed by Cameroon, foreign companies are still not adequately protected.

1.3 RESEARCH QUESTIONS

The research questions are divided into the main research question and specific research questions.

• Main Research Question

How does Cameroon law protect foreign investments and to what extent is the law effective?

• Specific Research Questions

• What is TOTAL Cameroon as a foreign investment in Cameroonian?
• What are the legal and institutional frameworks for protection of foreign investments in Cameroonian?
• How effective are the legal and institutional frameworks and what challenges do they face?
• What policy recommendations can be proposed to improve the protection of foreign investments under Cameroonian law?
  • OBJECTIVES OF THE STUDY

The objectives are divided into main research objective and specific research objectives.

• Main Research objective.

To critically examine the protection of foreign investments in Cameroon and the extent to which it is effective.

• Specific Research Objectives.

• To examine TOTAL Cameroon as a foreign investments in Cameroon.
• To examine the legal and institutional frameworks for protection of foreign investments in Cameroonian.
• To assess the effectiveness of the legal and institutional frameworks in the protection of foreign investments under Cameroonian law.
• To propose some policy recommendations aimed at improving the protection of foreign investments under Cameroonian law.
  • RESEARCH METHODOLOGY

This research adopts the qualitative research methodology. The qualitative approach in this study means that the information had to be categorized thematically, and this work weighed the information from legal sources based on their authoritative quality. Thus, to arrive at findings and conclusions of this research, the researcher relies on different techniques of legal reasoning namely inductive, deductive, reasoning by analogy and reasoning by justification. Inductive refers to reasoning from a particular premise to a general premise while deductive reasoning here refers to reasoning where logical conclusions are arrived at by moving from a general premise to a particular premise. Reasoning by analogy refers to a situation whereby to arrive at any logical conclusion or finding, it must be based on the movement from a particular premise to another particular premise while reasoning by justification refers to a situation by which any logical conclusion must be backed by both law and facts.

Qualitative research refers to a scientific method observation to gather non-numerical data. It is primarily exploratory in nature.

The main research method is doctrinal. Doctrinal research entails the content analysis and interpretation of primary and secondary data. Primary data include case law, treaties, and statutes. Secondary sources of data include a review of books, journals articles, reports and other relevant publications. It assesses the legal framework pertaining to protecting foreign investments under Cameroonian law. This method is important because it warrants the researcher to identify specific legal rules, then discuss the legal meaning of the rule, its underlying principles, and decision-making under the rule (whether cases interpreting the rule fit together in a coherent system or not). The researcher must also identify ambiguities and criticisms of the law, and offer solutions.

Due to the wealth of available data in this subject in terms of decided cases, legislation, and treaties, qualitative research is judged a more appropriate approach for conducting this study. Significant literature already exists in relation to this topic, allowing the candidate to meet deadlines. These primary sources are reviewed in an in-depth manner in order to better appreciate the dynamics of the rules in the protection of foreign investments under Cameroonian law. The review of these sources helps to show how the legal system protecting foreign investments is perceived by other legal scholars. It further stimulates a better understanding of the context of the study and also formulates and guides the research.

Another research method adopted is unstructured interviews. Some restricted interviews with important stakeholders such as manager of TOTAL, delegate for trade in southwest region were conducted in order to obtain their perspectives, which could help the researcher come up with useful recommendations for the study. Unstructured interviews do not use any set questions, instead, the interviewer asks open-ended questions based on a specific research topic, and will try to let the interview flow like a natural conversation. The interviewer modifies his or her questions to suit the candidate’s specific experiences.

The study employs observational method as well. This is relevant because we shall not only depend on the information from online sources, interviews, text books etc for the study but shall make use of observation.

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