TRENDS AND IMPACTS OF FOREIGN INVESTMENT IN DEVELOPING COUNTRY AGRICULTURE

MALI
Trends and impacts of foreign investment in
developing country agriculture
commitment, the government warrants that it will
do everything necessary to ensure that the two
companies are granted full rights of access and
extraction with regard to water from the Macina
canal or any other canal bringing water from the
river and/or another source of water close to the
site, at an initial maximum rate of 20 m3/s every
day of the year (increased to 35 m3/s if the site is
extended as mentioned above).
The government is also to make every effort
to ensure that the water charge is set at a rate
that will not affect project viability or exceed
the price paid by other major consumers of
agricultural water in the Markala area. The rate
must take account of the proportional length
of the canals used by the project and reflect
the comparative efficiency of using central
pivot irrigation. Notwithstanding these clauses,
however, if drought results in inadequate flow in
the river Niger to meet domestic water demand
and the requirements of international treaties,
an emergency system of concerted water
management will be implemented.
According to articles 15.2.1 and 15.2.2,
once the minimum flow requirements laid down
in international treaties have been met, the
requirements of SOSUMAR and CaneCo on the
one hand and Sukala on the other will be met in
proportion to their respective areas of sugarcane
plantations, ‘with absolute priority rights over
the quantities of water available in the Office
du Niger scheme’ (the authors’ translation). So
SOSUMAR and Sukala have priority access to
water in the event of drought – for example,
vis-à-vis other agro industrial developments and
local farmers. Article 15.2.2 goes on to stipulate
that the absolute priority rights will apply up
to the total maximum agreed requirements of
Sukala, SOSUMAR and CaneCo ‘before any other
user can be supplied with water by the Office
du Niger. This disposition can be considered as
discrimination which is not in favour of food
crops. It carries prejudice to the other users of the
Niger River, particularly in the area of Office du
Niger.
Social and environmental standards
SOSUMAR and CaneCo warrant and give an
undertaking to the government that they will
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do everything in their power to comply with
environmental legislation applicable to the
project. According to article 22.3, SOSUMAR,
CaneCo and IGHL must each be classified in the
agricultural category and sector as regards the
employment and social security requirements laid
down in the respective laws. The government will
facilitate the conclusion of a collective agreement
once a trade union has been set up. Each of the
companies agrees to observe and comply with
all laws and regulations applicable to labour and
employment.
However, the contract also features a very
broad stabilization clause. When not properly
formulated, broad stabilization clauses can raise
concerns about the ability of the government to
improve social and environmental standards over
project duration (see Cotula, 2011). According
to article 7.3, the Malian Government warrants
that no law can nullify the agreement or any
one of its terms, or cause it or any one of its
provisions to cease to have effect. To this end,
the terms of the agreement will continue to be
applicable and enforceable and ‘take precedence
over any new law enacted after signature of the
agreement, the enforcement of which might
affect the continuation of the project or cause
the agreement or any one of its provisions to
cease to have effect’. So the contract prevails
over national law. In article 4.4, the Malian
Government warrants that it will do everything
necessary to ensure that the provisions of
the agreement ‘shall bind the government
and local authorities and all other authorities
or government or similar bodies in Mali...’.
More specifically, article 4.4.1 states that ‘the
provisions of clauses 12 to 15 of the agreement
[concerning the land and water rights aspects
of the project] bind and shall bind the Office du
Niger’ and undertakes to do everything necessary
to ensure that the latter complies fully with those
clauses.
However, article 7.5 of the agreement
stipulates that, if the Government of Mali adopts
any measures more favourable to SOSUMAR and/
or CaneCo and/or their shareholders, the latter
may individually or collectively adopt the more
favourable arrangements provided that they
adopt them in their entirety.