Promotion and protection of foreign investment in many years now has been in dilemma. This dilemma is influenced mainly by competition between foreign investors and host states for more benefits from investment. This has led to development of two groups of concepts, theories and principles in the investment arena. Thus, concepts, theories and principles said to promote and protect foreign investment and those that are said to discourage it. The previous concepts, theories and principles are encouraged by capital exporting states, because they protecting their investments in the host states, while the later concepts, theories, and principles are encouraged by investment hosting states to achieve maximum benefits from the resources exploited in their countries, hence a dilemma.
In natural resources sector, there have been conflicts between foreign investors and the host states for a long time now. The main issue being investors rights against those of the host state over the Principle of PSNR. This paper reviews the principle of PSNR and its impact on the promotion and protection of foreign investment in the world, exploring Tanzanian experience in implementing it in its legal regime.
In the review, the author discovers that the principle is a valid principle of international law, nevertheless it does not encourage foreign investment since it tend to favor host states than the foreign investors. This is because the principle calls for maximum control of the resources by the host country. This can be well described by the laws enacted by Tanzania when domesticating the principle of PSNR.
It is recommended that the international community should come as one and create a single law that guides international investment and especially on matters concerning investment disputes. This will set a clear ground and eliminate all competitions between host states and investors.
