Legal empowerment for local resource control

30
compensation), 11 and those on the borderline between regulation and
takings of property; 12
The gradual emergence of a web of more than 2000 bilateral investment
treaties, which typically includes provisions on the protection of foreign
property 13 (not only on takings of property, but also for instance on “fair and
equitable treatment”);
The growing use of international arbitration (rather than domestic courts) in
investment disputes; and
Tailored contractual commitments to ensure the stability of the investor’s
property rights and of the regulatory framework governing them
(“stabilisation clauses”). 14
African countries have been part of this process, for instance through signing a
large number of bilateral investment treaties, through integrating various
types of stabilisation clauses in their contracts with foreign investors, and
through accepting international arbitration as the means to settle investment
disputes.
International rules on the property rights of nationals (which protect local
resource rights) emerged only after World War II with the development of
international human rights law. In Africa, these rules are not very robust,
however, and provide lower standards compared to international economic
law.
Article 17 of the 1948 Universal Declaration of Human Rights recognises the
right of “everyone” (whether nationals or foreigners) to own property and not
to be arbitrarily deprived of it. However, due to the ideological confrontation
11. These requirements are spelt out in a large number of legal instruments (e.g. UN General Assembly
Resolution 1803 of 1962), of bilateral investment treaties (BITs) and of arbitral awards. For examples of BIT
provisions concerning Africa, see e.g. Kenya-UK BIT 1999, article 5; Mozambique-Netherlands BIT 2001,
article 6; France-Madagascar BIT 2003, article 5; France-Uganda BIT 2003, article 5; and Mali-Netherlands
BIT 2003, article 6.
12. International economic law provides that, where regulatory changes affect an investment project to
such an extent to undermine its very commercial viability, regulation amounts to taking of property and
requires the host state to pay compensation. This approach has been taken the furthest in the case law
developed under NAFTA (namely in the Metalclad v. Mexico case), although more recent NAFTA arbitrations
have followed a more balanced approach (e.g. Methanex v. US).
13. See footnote 11 above.
14. Under increasingly broad stabilisation clauses, the host state may commit itself not to unilaterally
change the regulatory framework in a way that affects the “economic equilibrium” of an investment
project (see Cotula, forthcoming).