Competition for Natural Resources and International Investment Law: Analysis from the Perspective of Africa

Abstract

Africa is abundantly endowed with natural resources, such as minerals, oil and gas. To exploit those resources and bring them to the market, it has been necessary to involve foreign multinational extractive companies that have the required technical and managerial expertise. While the terms on which these companies undertook such projects were determined for long by brute force, the instrument of choice today is the web of treaties, contracts, and institutions that may be collectively termed international investment law. This article examines the complex relationship between this body of international law, on the one hand, and the sovereignty of states over their natural resources, on the other, from the perspective of African countries. Adopting historical, theoretical and jurisprudential analyses, this contribution argues that the competition between developed countries and developing countries for control of extractive resources defined both the content and the evolution of international investment law. This article further finds that contemporary international investment law significantly erodes the state’s sovereignty over its natural resources by, at the minimum, (1) limiting its legislative jurisdiction through the doctrine of internationalisation of the investment contract and stabilisation clauses, and (2) virtually eliminating its judicial jurisdiction through the almost uniform adoption of international arbitration as the means to settle investment disputes. The article concludes by calling on African countries to work together through their regional and continental institutions, develop common positions, conduct a comprehensive review of their respective bilateral and other investment treaties and related national legislation and natural resources contracts, terminate those that undermine their national interests or renegotiate them based on regionally- and/or continentally-harmonised policy frameworks.