International Natural Resources Law, Investment and Sustainability

Shawkat Alam,Jahid Hossain Bhuiyan,Jona Razzaque

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781317535881
• Edition: 1
• Topic: Law
• Subtopic: Environmental Law
• Index: Law

International Natural Resources Law, Investment and Sustainability provides a clear and concise insight into the relationship between the institutions that govern foreign investment, sustainable development and the rules and regulations that administer natural resources. In this book, several leading experts explore different perspectives in how investment and natural resources come together to achieve sustainable development in developing countries with examples from water, oil and gas, renewable energy, mineral, agriculture, and carbon trading. Despite varying perspectives, it is clear that several themes are central in considering the linkages between natural resources, investment and sustainability. Specifically, transparency, good governance and citizen empowerment are vital conditions which encourage positive social, economic and environmental outcomes for developing countries. In addition, this book provides new insights into key concepts which underpin international law, including sovereign rights and state responsibility principles. It is clear from this book that in the attempt to reconcile these concepts and principles from separate legal regimes, complex policy questions emerge whereby it is difficult to attain mutually beneficial or succinct outcomes. This book explores how countries prioritise their policy objectives to achieve their notion of sustainable natural resource use, which is strongly influenced by power imbalances that inform North–South cooperation, as well as South–South cooperation in the international investment regime.

This book will be of great interest to students, academics and researchers of international environmental law, international human rights law, international investment law and international economic law. This book may also be of relevance to environmentalists, policy-makers, NGOs, and investors working in the natural resources field.

Part I
Natural resources law and investment law

Interactions

Foreword

Elizabeth Maruma Mrema

Natural resources are essential to sustaining people’s livelihoods, safeguarding peace and security and promoting economic development, yet they are being rapidly overexploited. Forests are under threat from illegal logging and trade. Fish stocks continue to be depleted. The illegal trade in wildlife is hastening the extinction of flora and fauna, and destabilizing ecosystems. And the illegal extraction and trade in minerals is fueling many conflicts in the poorest of countries and stifling economic development. The sound governance of natural resources is one of our most effective means of addressing the illegal and unsustainable use of natural capital, promoting inclusive economic growth and ensuring peace and security. It is international natural resources law that provides the foundation upon which sound and effective governance can be exercised.

This timely publication presents a much needed analysis of the principles that underpin the sustainable utilization of natural resources and adds momentum to UN Environment’s work on the establishment of just and legal frameworks to support the sustainable use of natural resources across borders. International Natural Resources Law, Investment and Sustainability examines the existing legal structures for conserving, preserving, using and extracting natural resources at an international level and provides examples of how to balance social, economic and environmental priorities in an investment context.

We know that human beings are entirely dependent on what our environment provides in order to survive and thrive. This interdependence is being increasingly recognised in courts of law around the world where the relationship between biodiversity loss and human rights is coming under closer scrutiny. The illegal and unsustainable exploitation of natural resources – from water theft and artisanal mining, to deforestation and pollution – affects people’s livelihoods, health and security: in short, it jeopardises their enjoyment of a range of human rights.

That is why the development and application of sustainable international natural resources law and international investment law is so integral to protecting human rights and to achieving the Sustainable Development Goals. Without them, the balance between economic, social, cultural and environmental priorities in an investment context cannot be achieved. The responsibility to ensure a sustainable earth for future generations not only rests with international organisations, governments and environmental human rights defenders, but on the shoulders of the business community whose interests can threaten the wellbeing of those relying on natural resources for their survival.

This book covers many critical social and environmental issues relating to investment in natural resources law for sustainable decision-making at international, regional and national levels. It addresses the key considerations that must be met for investment regimes to harmonise economic, social, cultural and environmental priorities. I hope that the book becomes a central reference for strong and effective governance of natural resources – including the enhancement of the rights of the most vulnerable groups – in the use of natural resources.

1 International natural resources law and sustainable investment

Principles and practices

Shawkat Alam, Jahid Hossain Bhuiyan and Jona Razzaque

Introduction

Natural resources are important for both developing and developed countries given their significant contribution to economic activity.¹ States need to use and manage natural resources carefully to achieve sustainable development. Sustainable use and management of natural resources are also necessary to reduce the potential for resource depletion and environmental degradation. The International Union for the Conservation of Nature (IUCN) in its report World Conservation Strategy provides three fundamental objectives in relation to development and environmental limits:

(a) to maintain essential ecological processes and life-support systems (such as soil regeneration and protection, the recycling of nutrients, and the cleaning of waters) on which human survival and development depend;

(b) to preserve genetic diversity; and

(c) to ensure the sustainable utilization of species and ecosystems (notably fish and other wildlife, forests and grazing lands), which support millions of rural communities as well as major industries.²

Increased foreign investment in the natural resources sector of developing countries plays an important role in promoting sustainable development, especially in countries that are heavily reliant on natural resources for economic growth and wellbeing. Sustainability has become a vital component in contemporary management of natural resources by governments. Within the resource sectors, international bodies such as the World Bank, World Economic Forum (WEF) and the UN are working with national governments to establish programmes intended to help increase environmental standards as well as develop sustainability. New businesses are being urged to become increasingly sustainable in their practices through policy development and regulatory reform, as well as subsidies. Globally, economically disadvantaged communities rely on natural resources, where these are readily available, as vitally important to their prospects of development. The economic benefits to be derived from natural resources are equally important to indigenous communities and smallholder individuals. In recognition of the need for an increase in the living standards of these communities, international development efforts are accordingly directed with this aim.³

Recent developments indicate that various low or middle-income countries have shown interest in attracting foreign investment in projects such as petroleum, mining, food and other commodities, including rubber.⁴ The investment resulting from economic liberalisation in resource-rich host countries has enhanced communication and transport systems in those countries and has gone some way to supplying the rising demand for agricultural, mineral and energy products, particularly in those countries new to the influence of international investment. Within sub-Saharan Africa alone, approximately US$64 billion in foreign investment flows were largely attributed to the natural resource sector.⁵

Sustainable development and growth can be attained by governments through careful management and regulation of natural resources.⁶ Historically, there is a high cost associated with mismanagement of natural resources, leading typically to social, environmental and economic damage, including corruption. Given that domestic governments are responsible for natural resources within their countries’ borders, they must ensure that these natural resources are regulated appropriately for the benefit and future prosperity of present and future generations. It is also the responsibility of the relevant extractive industries to manage an effective and transparent system for the exploitation and production from forest holdings, agricultural land, hydrocarbon resources and minerals. Such an initiative would help foster inclusive as well as sustainable economic development.⁷

The value in pursuing sustainable development was recognised in the Stockholm Declaration on the Human Environment, adopted at the 1972 UN Conference on the Human Environment,⁸ which states ‘[m]an is both creature and moulder of his environment, which gives him physical sustenance and affords him the opportunity for intellectual, moral, social and spiritual growth’.⁹ Consequently, ‘[t]he natural growth of population continuously presents problems for the preservation of the environment, and adequate policies and measures should be adopted, as appropriate, to face these problems’.¹⁰ Again, recognising the intrinsic importance of economic development to the capacity for increased environmental protection, the Declaration acknowledges that ‘[e]conomic and social development is essential for ensuring a favourable living and working environment for man and for creating conditions on earth … essential for the improvement of the quality of life’.¹¹ Meanwhile, it was accepted that the onus was on host states to ensure that economic growth arising from investment in natural resources occurred in the context of appropriate measures taken for the protection of those resources and the environment impacted by their exploitation, but that these should not be excessively restrictive. Accordingly, the Declaration also states that ‘[t]he environmental policies of all States should enhance and not adversely affect the present or future development potential of developing countries, nor should they hamper the attainment of better living conditions for all’.¹²

Sustainable development has received worldwide attention following the publication of the report Our Common Future, known as the Brundtland Report, by the World Commission on Environment and Development (WCED) in 1987. The report defined sustainable development as ‘development that meets the needs of the p...