This chapter takes Afghanistan as an emblematic example of countries in the throes of armed conflict, in which both human rights and investment have a crucial role to play for the sustainable development of the country. In so doing, it considers the practical dimension of the relationship between investment and human rights within a conflict context. It discusses the protection of the right to water in Afghanistan within the context of the country’s booming extractive sector, in order to outline how conflict areas represent a worst-case scenario for the practical implementation of both investment and human rights protection. In order to identify ways to harness investment for sustainable development, the chapter considers the relevance of the United Nations (UN) Framework and Guiding Principles for Business and Human Rights, and analyses specifically the home state’s duty to protect human rights, including the right to water, within the Afghan context. The argument advanced is that a different approach to investment protection is needed in Afghanistan, not least one which takes into full consideration the home state’s obligation to regulate its investors, so that they will find themselves unable to evade compliance with their responsibility to respect human rights, irrespective of where they carry out their activities. Key words: right to water; international investment law; economic, social and cultural rights; guiding principles for business and human rights; Afghanistan; extractive sector
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Juan Pablo Bohoslavsky, Liber Martin and Juan Justo
The human right to water and sanitation has captured primary attention since General Comment No. 15, issued in 2002 by the UN Committee on Economic, Social and Cultural Rights, interpreted Articles 11 and 12 of the International Covenant on Economic, Social and Cultural Rights. Since then, much has been written on this human right, but very little on the existing linkage between it and private corporations providing public water and sanitation services, and even less on the bilateral investment treaties (BITs) implications of the state’s duty to protect this specific right. This chapter will study the BIT’s implications of the state’s duty to protect from business-related human rights violations in water and sanitation services, which raises questions such as: how should we interpret BITs that protect foreign companies providing water and sanitation in light of the state’s duty to protect from business-related human rights violations? How to reconcile the state’s BITs commitments with its obligations under human rights treaties in water and sanitation services? Do we need to reconcile them at all? The chapter concludes that arbitrators, when interpreting BITs, should consider the human rights fibre of the regulation under scrutiny in order to verify its international legality. Keywords: bilateral investment treaties; corporate social responsibility; International Covenant on Economic, Social and Cultural Rights; human rights; right to water and sanitation
Emma Wilson and James Van Alstine
The demand for raw materials from emerging economies such as China and India fueled a global commodity boom from the late 1990s until 2010, while in the past decade more countries in sub-Saharan Africa have developed their oil, gas and mineral resources. Although the commodities super-cycle may now be over, increased foreign direct investment may now offer these resource-rich but poor economies a major opportunity to accelerate their development. However, countries that are dependent on natural resources often suffer from the so-called ‘resource curse’, characterized by poor economic growth, unregulated government spending, a decline in other sectors, increased corruption and political authoritarianism. The Extractive Industries Transparency Initiative (EITI) was set up in 2002 in response to this challenge. Transparency has been rising up the political agenda – it was a key theme of the June 2013 G8 summit and is now being legislated in the US and Europe. A huge increase in extractive industries data is expected in the coming years. Yet a decade since EITI was established, the question remains whether transparency can in fact mitigate the resource curse. In this chapter we consider to what extent transparency initiatives to date have served to institutionalize better resource governance practices and the extent to which this has enhanced development potential in our case-study countries. The case-study countries include two lower middle-income countries (Ghana and Nigeria) that are EITI-compliant, and a lower-income country that is considering EITI participation (Uganda). There is evidence that institutional reform can generate potential for broad-based changes in culture and mind-set, especially when introduced in the early stages of oil industry development, as can be seen in the new oil producer Ghana and to some extent Uganda, which seeks to become an oil producer by 2020. As the case of Nigeria demonstrates, institutionalization is not a guarantee of positive socio-economic and political change, especially in countries where elite bargaining, corruption and criminality have become deeply entrenched in the way the sector operates. Sub-national implementation of transparency initiatives and more direct engagement of local communities are important in enabling people to use extractive industries data effectively to hold industry and decision-makers to account, and help to achieve better development outcomes. Key words: extractive industries, transparency, resource curse, Africa, EITI
Foreign direct investment is commonly believed to have a stabilizing effect in countries receiving investments, and is believed to lead to positive development outcomes. This chapter pushes back on these assumptions. Informed by nearly four years of intermittent ethnographic fieldwork in the towns surrounding the Páramo de Santurban in the rural highlands of Colombia, it provides a grounded account of how investments by foreign mining companies may destabilize populations and cause conflict, rather than perpetuate stability. This empirical study lends support to the argument that the design of the FDI project, and the process by which it is established, may determine whether the project will be beneficial or detrimental to common development goals, including whether it will cause conflict or act as a stabilizing force. This chapter is largely informed by the fieldwork that led to the production of the documentary film directed by the author, There is Nothing Else/ Otra Cosa No Hay, in which many of the topics discussed herein are explored in further detail.
This chapter examines the impact of international legal rules on the natural resource policies of Brazil, Chile and Ecuador during the recent commodities boom. By means of three case studies, it shows that their policies were remarkably similar despite considerable economic and political differences. Although they complied with norms on investment and trade liberalization, they were not constrained by other international rules, in particular those that recognize the rights of indigenous people and the need to protect the environment. Thus, the chapter shows that, while in some respects international law has reduced governments’ policy space in the area of natural resources, it provided them encouragement and flexibility to take advantage of the commodities boom. On close inspection, however, the political space created by the contradictory nature of international law conceals a more fundamental constraint arising from the nature of prevailing rules on trade and investment. Keywords: commodities; development; governance, international law; natural resources; Latin America; trade and investment
Celine Tan and Julio Faundez
The current economic and ecological climate calls for a reappraisal of the international legal and political framework governing natural resources, defined broadly to include materials and organisms naturally occurring in the environment, such as water, mineral and fossil fuels, and cultivated resources, such as food crops, both renewable and exhaustible. This reappraisal is urgent because the governance and management of natural resources have formed a pivotal backdrop to the evolution of international economic law in the post-war period and have been critical components of the process of economic globalization. Contributors to this collection explore the different dimensions of natural resource governance in the contemporary economic, political and legal landscape. They reflect upon and address the different aspects of the conflicts and contradictions arising at the intersection between international economic law, sustainable development and other areas of international law, notably human rights law and environmental law.
Legal evolutions associated with economic globalization have highlighted the ever closer connection between the international legal arrangements governing the global economy on the one hand, and land and natural resources on the other. International investment law is at the heart of this connection, protecting and promoting foreign investments in the natural resource sector. Natural resource-related investor-state disputes have fuelled debates about the interface between investment promotion and regulatory space. This chapter assesses whether investment treaties unduly constrain regulatory space. It explores trends in the normative content of investment treaties, and mechanisms for control over treaty administration, interpretation and compliance. The findings suggest that investment treaties, even of the ‘recalibrated’ type, can have far-reaching implications for regulatory space, requiring careful thinking through. Ultimately, choices on the boundaries between investment promotion and regulatory space are eminently political, and a key challenge ahead is increasing democratic oversight in investment treaty-making. Key words: investment treaties, arbitration, regulatory space, sovereignty, politics
This chapter will examine a specific aspect within a range of continuing legal issues arising from the non-compliance of environmental protection standards by private transnational economic actors operating beyond the national jurisdiction from which they originate. The focus here is on litigation within the ‘home’ state jurisdictions of multinational oil companies for the alleged harmful effects of their activities conducted within ‘host’ state jurisdictions abroad. This ‘home’ state litigation against multinational companies on behalf of the victims of alleged pollution by these companies when they operate in the ‘host’ states of these victims will be examined in terms of their viability from both legal and practical perspectives. Key words: Multinational Oil Companies; Pollution Damage Claims; ‘Home’ State Jurisdiction; Alien Tort Statute; Brussels Regulation; Compensation
Natural resources are critical to global value chains as minerals, good climate and fertile soil are commonly required for the beginning of the chain, with the consequence that any interruption in their supply threatens the chain’s continued integrity. Trade in such resources provides a valuable source of income for resource-rich states. Yet, exploitation of natural resources can result in their exhaustion and biodiversity loss, while their extraction can lead to environmental damage and human rights abuses, with the result that any positive contribution to sustainable development for resource-rich states is quickly undermined. Effective regulation is critical to maximize benefits and minimize potential harm. The WTO’s rules seem ideally suited to allow the state to impose measures that militate against the over-exploitation of the resource by corporations, whilst simultaneously ensuring that regulation does not unnecessarily impede the flow of resources within the value chain. However, this chapter will show that applying the WTO’s rules to natural resource use in global value chains presents both substantive and normative challenges.