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Investment contracts and sustainable development: How to make contracts for fairer and more sustainable natural resource investments

Lorenzo Cotula

Issue paper, 104 pages

Economic liberalisation, improved transport and communication systems, and the global demand for energy, minerals and agricultural commodities have fostered natural resource investment in many lower- and middle-income countries. Increased investment may create opportunities to improve living standards, but it also creates risks such as environmental damage and loss of key livelihood assets like land, water and grazing. Investment contracts define the terms of an investment project and the extent to which it advances – or undermines – sustainable development. Government capacity to negotiate and manage contracts and civil society capacity to scrutinise government dealings can make a real difference to getting a better deal from natural resource investment. Drawing on test trainings in Ghana and Central Asia and targeting host governments and civil society, this guide discusses how to structure investment contracts for natural resource projects in ways that maximise the investment’s contribution to sustainable development.

This report has been produced under IIED’s Legal tools for citizen empowerment project.

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Investment contracts – from land concessions to production sharing agreements for oil and gas projects – define the terms of an investment and influence the distribution of its costs and benefits. The process to conclude the contracts influences who has what say, when and how. IIED works with partners to rethink these legal documents and the process through which they are formulated.

More at www.iied.org:
Realigning investment contracts with sustainable development

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