Farmland Investments and Water Rights: the Legal Regimes at Stake
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Farmland Investments and Water Rights: The legal regimes at stake Makane Moïse Mbengue Susanna Waltman May 2015 www.iisd.org/gsi www.iisd.org © 2015 The International Institute for Sustainable Development Published by the International Institute for Sustainable Development. International Institute for Sustainable Development The International Institute for Sustainable Development (IISD) contributes to sustainable development by advancing policy recommendations on international trade and investment, economic policy, climate change and energy, and management of natural and social capital, as well as the enabling role of communication technologies in these areas. We report on international negotiations and disseminate knowledge gained through collaborative projects, resulting in more rigorous research, capacity building in developing countries, better networks spanning the North and the South, and better global connections among researchers, practitioners, citizens and policy-makers. 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Head Office 111 Lombard Avenue, Suite 325, Winnipeg, Manitoba, Canada R3B 0T4 Tel: +1 (204) 958-7700 | Fax: +1 (204) 958-7710 | Website: www.iisd.org Geneva Office International Environment House 2, 9 chemin de Balexert, 1219 Châtelaine, Geneva, Switzerland Tel: +41 22 917-8373 | Fax: +41 22 917-8054 | Website: www.iisd.org Farmland Investments and Water Rights: The legal regimes at stake May 2015 Makane Moïse Mbengue and Susanna Waltman Acknowledgements Special thanks goes to the Swiss Agency for Development and Cooperation (SDC) for the invaluable support to IISD's work on investment in agriculture and water The authors would like to thank Nathalie Bernasconi-Osterwalder, Carin Smaller, Julie Dekens and Dimple Roy for their invaluable contributions to this report. About the Authors Makane Moïse Mbengue is Associate Professor at the Faculty of Law and the Institute of Environmental Studies of the University of Geneva. He is a member of the Platform for International Law of the University of Geneva and a visiting professor at the Sciences Po Law School in Paris. Susanna Waltman is a PhD Candidate at the Faculty of Law of the University of Geneva. She holds a Masters of Law in international dispute settlement. She is currently a consultant and researcher in international law. Farmland Investments and Water Rights: The legal regimes at stake i Table of Contents Executive Summary ...............................................................................................................................................1 Introduction .............................................................................................................................................................5 Part I. The Growing Pressures on Freshwater Resources ................................................................ 7 1.0 Population Growth .........................................................................................................................................7 2.0 Climate Change .............................................................................................................................................8 2.1 Climate Change Impacts on Food Security ......................................................................................9 2.2 Increased Use of Irrigation as a Response to Climate Risks .....................................................9 3.0 Industrial Agriculture ..................................................................................................................................11 4.0 Unregulated and Unlimited Access to Water ................................................................................... 13 Part II. The Parallel Legal Regimes Governing Water and Farmland Investments .................... 15 5.0 Domestic Law ..............................................................................................................................................17 5.1 Informal vs. Formal Rights: The role of custom in Africa ...........................................................18 5.2 Common and Civil Law Systems: ....................................................................................................19 5.3 Weak Implementation and Enforcement of Domestic Law ...................................................20 5.4 Examples of Domestic Law Approaches: Zambia and Mozambique ..................................20 6.0 Contracts Between Foreign Investors and Host States .................................................................. 24 6.1 Provisions Impacting Water Management in a Sample Contract: An American palm oil plantation in Cameroon ........................................................................... 24 7.0 International Investment Law ................................................................................................................28 7.1 Standards in International Investment Agreements Relevant to Farmland Investmentsand Water Use ..............................................................................................................28 7.1.1 The Fair and Equitable Treatment Standard ........................................................................28 7.1.2 Prohibition Against Expropriation Without Compensation ..........................................29 7.1.3 Umbrella Clauses .......................................................................................................................30 7.1.4 Dispute Settlement: Investment Arbitration ....................................................................30 8.0 International Freshwater Law .................................................................................................................. 31 8.1 The Watercourses Convention ......................................................................................................... 31 8.1.1 The Principle of Reasonable and Equitable Use ................................................................ 32 8.1.2 Transboundary Environmental Impact Assessments ..................................................... 32 8.1.3 The “No-Harm” Principle ........................................................................................................ 33 8.1.4 Consultations and Negotiations if a State Considers It Has or May Sustain Harm ............................................................................................................................................ 33 8.1.5 Protection and Preservation Against Pollution and Overexploitation........................34 8.1.6 Procedural Obligations and Institutional Structure .........................................................34 Farmland Investments and Water Rights: The legal regimes at stake ii 9.0 Integrated Water Resources Management Schemes in Africa .................................................... 37 9.1 The Southern African Development Community (SADC) ...................................................... 37 9.2 The Economic Community of West African States (ECOWAS) ........................................... 39 9.3 The Legal Regimes of Some Major African River Basins ......................................................... 39 9.3.1 The Legal Regime Governing the Senegal River ..............................................................40 9.3.2 The Lake Chad Basin Commission ......................................................................................42 9.3.3 The Niger Basin Authority .....................................................................................................44 9.3.4 The Zambezi Watercourse Commission ...........................................................................45 9.4 The Link Between International Freshwater Law and the Integrated Water Resources Management (IWRM) Schemes in Africa .................................................................................45 9.5 The Problems of Poor Implementation and Enforcement of the Legal Regimes Governing Water Use ........................................................................................................................46 10.0 International Environmental Law.........................................................................................................48 10.1 The Obligation to Conduct a Transboundary Environmental Impact Assessment ........48 10.2 The United Nations Framework Convention on Climate Change .......................................49 11.0 International Human Rights Law ........................................................................................................... 51 12.0 Soft Law ....................................................................................................................................................... 55 12.1 The Voluntary Guidelines on the Responsible Governance of Tenure of Land, Forests and Fisheries ........................................................................................................................