State-Investor Contracts and Human Rights: Taking a Critical Look at Transparency and Participation

Abstract

This chapter addresses the topic of state-investor contracts from a human rights perspective, focusing in particular on transparency and participation. Firstly, the role and function of state-investor contracts in the extractive industries is considered, focusing predominantly on mining in Africa. Secondly, five key human rights issues associated with state-investor contracts are examined and discussed, namely: (1) human rights coverage in state-investor contracts; (2) asymmetry in capacity and information of negotiating parties; (3) stabilisation clauses and regulatory chill; (4) transparency, public sector oversight and monitoring; and (5) access to remedy and dispute settlement. It is argued that the use of the generally applicable law to govern extractive industries foreign direct investment projects, rather than state-investor contracts, should be encouraged as this provides opportunities for greater transparency and participation for impacted rights-holders and other stakeholders in the way that agreements governing such projects are negotiated and implemented. Furthermore, opportunities exist to enhance transparency and participation in the use of state-investor contracts, which should be realised irrespective of whether a jurisdiction favours a contractual or licensing regime. The chapter concludes by highlighting key opportunities for improving transparency and participation in state-investor contract negotiation and implementation, whilst noting that any such opportunities should be realised in the context of broader reform considerations regarding extractive industries governance for sustainable development.