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The Turn to Contractual Responsibility in the Global Extractive Industry

  • James GATHII and Ibironke T ODUMOSU-AYANU
Abstract

This article argues that there is a newer model of contracting for natural resources that expands the potential for corporate responsibility towards those adversely affected by business activities. It lays out the conceptual roadmap and justification underlying these shifts and changes in contracting for natural resources. The article calls for a renewed focus in exploring enforcement of corporate obligations for impacts to individuals and communities within a contractual framework. Examples of this type of arrangements include contracts that can be construed to allow third parties to sue on a contract; community development agreements; contracts between investors and communities; environmental contracts; human rights deeds, and investor–state–local community contracts (tripartite contracts). These contractual forms demonstrate that the law of contract has evolved from the nineteenth century idea that contracts merely protect the rights of investors without much concern for those who are directly affected by extractive industry operations. By including affected communities, indigenous communities, and others, these new contractual forms demonstrate that investors and governments are trustees and that extractive resources must be mobilized for the benefits of their publics. In so doing, we map this turn to contracts between multiple parties in the resource extraction context, and argue that it affirmatively demonstrates real potential to address or mitigate the absence of remedial and responsibility regimes for the adverse impacts of extractive industry activities on individuals and communities.

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Copyright
Footnotes
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*

Wing-Tat Lee Chair in International Law and Professor of Law, Loyola University Chicago School of Law.

**

Associate Professor, College of Law, University of Saskatchewan. Thanks to the Social Sciences and Humanities Research Council (Canada) and the Law Foundation of Saskatchewan for providing research funds for aspects of the research presented in this article and to Olufunmi Ayotunde and Janelle Souter for excellent research assistance.

Footnotes
References
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1 UN Human Rights Office of the High Commissioner, ‘Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework’, HR/PUB/11/04 (2011), http://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf (accessed 1 August 2015).

2 Fuller, Lon, ‘Consideration and Form’ (1941) 41 Columbia Law Review 799, 821–22.

3 Ibid, 810–13.

4 Boyle, James, ‘Legal Realism and the Social Contract’ (1993) 78 Cornell Law Review 371, 377–8.

5 Ibid, 378.

6 Trebilock, Michael, The Limits of Freedom of Contract (Cambridge, MA: Harvard University Press, 1993).

7 See Nerken, Ira, ‘A New Deal for the Protection of Fourteenth Amendment Rights: Challenging the Doctrinal Bases of the Civil Rights Cases and State Action Theory’ (1977) 12 Harvard Civil Rights-Civil Liberties Law Review 297, 332.

8 We do not have space to go into a detailed discussion of various types of individualism (e.g., libertarian, contractarian, or utilitarian). For this, see Rosenfeld, Michel, ‘Contract and Justice: The Relation between Classical Contract Law and Social Contract Theory’ (1984–1985) 70 Iowa Law Review 769.

9 On this notion of dis-embeddedness, see Kennedy, Duncan, ‘From the Will Theory to the Theory of Private Autonomy: Lon Fuller’s Consideration and Form’ (2000) 100 Columbia Law Review 94, 136–8.

10 Ibid, 173.

11 See Gathii, James, ‘Incorporating the Third Party Beneficiary in Natural Resource Contracts’ (2014) 42 Georgia Journal of International and Commercial Law (forthcoming) (Gathii, ‘Third Party Beneficiary’).

12 Pauwelyn, Joost, Wessel, Ramses A, and Wouters, Jan, ‘When Structures Become Shackles: Stagnation and Dynamics in International Lawmaking’ (2014) 25 European Journal of International Law 733, 762.

13 Ibid, 762. Thick stakeholder consensus is regarded to have been met where the following criteria have been met. (i) the source, respectability, and authority of the norm creating body, (ii) the transparency, openness, and neutrality in the norm’s procedural elaboration, and (iii) the substantive quality, consistency, and overall acceptance (consensus) and objectivity of the norm. Ibid.

14 Here we simplify a rather broad area by emphasizing the distinction between legally-binding and non-legally-binding approaches. The modern trend is to conceive of the field as occupied by multiple options. For example, see De Schutter, Oliver, ‘The Accountability of Multinationals for Human Rights Violations in European Law’, Center for Human Rights and Global Justice Working Papers 1/2004, http://chrgj.org/wp-content/uploads/2012/07/s04deschutter.pdf (accessed 1 August 2015).

15 See United Nations Commission on Transnational Corporations, ‘Draft United Nations Code of Conduct on Transnational Corporations’, UN Doc E/C.10/1984/S/5 (1984).

16 See Kimberly Process, ‘About’, http://www.kimberleyprocess.com/en/about (accessed 1 August 2015).

17 See Extractive Industries Transparency Initiative, ‘History of EITI’, http://eiti.org/eiti/history (accessed 1 August 2015).

18 For example, the UN encourages its vendors to participate in the Global Compact. ‘Overview of the UN Global Compact’, http://www.unglobalcompact.org/AboutTheGC/index.html (accessed 1 August 2015).

19 Guiding Principles, note 1. For an excellent exposition of the possibilities and limitations of the Guiding Principles, see Surya Deva and David Bilchitz (eds.), Human Rights Obligations of Business: Beyond the Obligation to Respect (Cambridge: Cambridge University Press, 2013).

20 See, e.g., Coca Cola, ‘Code of Business Conduct’ (August 2012), http://assets.coca-colacompany.com/45/59/f85d53a84ec597f74c754003450c/COBC_English.pdf (accessed 1 August 2015); Rio Tinto, ‘The Way We Work: Our Global Code of Business Conduct’ (December 2009), http://procurement.riotinto.com/documents/The_way_we_work_-_English_-_Final.pdf (accessed 1 August 2015); Nestle, ‘Code of Business Conduct’ (2008), http://www.nestle.com/asset-library/Documents/Library/Documents/Corporate_Governance/Code_of_Business_Conduct_EN.pdf (accessed 1 August 2015).

21 For a recent criticism of non-binding mechanisms and argument in favour of home-state regulation, see Simons, Penelope and Macklin, Audrey, The Governance Gap: Extractive Industries, Human Rights and the Home State Advantage (London/New York: Routledge, 2014).

22 See, e.g., Scott, Craig (ed.), Torture as Tort: Comparative Perspectives on the Development of Transnational Human Rights Litigation (Oxford: Hart Publishing, 2001).

23 Government of Canada, Foreign Affairs Trade and Development, ‘Doing Business the Canadian Way: A Strategy to Advance Corporate Social Responsibility in Canada’s Extractive Sector Abroad’ (14 November 2014), http://www.international.gc.ca/trade-agreements-accords-commerciaux/topics-domaines/other-autre/csr-strat-rse.aspx (accessed 1 August 2015). See also Canadian Business Ethics Resource Network, ‘Building the Canadian Advantage: Ottawa’s Approach to Corporate Social Responsibility’ (4 January 2013), http://cbernblog.ca/2013/01/building-the-canadian-advantage-ottawas-approach-to-corporate-social-responsibility/ (accessed 1 August 2015) (describing that Canada released a report that outlined a four-tier approach to ensure that Canadian companies would become the most competitive in international markets based on their ability ‘manage social and environmental risks’).

24 See Rosenblum, Peter and Maples, Susan, Contracts Confidential: Ending Secret Deals in the Extractive Industries (New York: Revenue Watch Institute, 2009).

25 Ibid, 16–17.

26 See, e.g., International Monetary Fund, ‘Guide on Resource Revenue Transparency’ (2007), https://www.imf.org/external/np/fad/trans/guide.htm (accessed 1 August 2015).

27 Dodd-Frank Wall Street Reform and Consumer Protection Act 2010 (US).

28 National Association of Manufacturers v Securities and Exchange Commission 748 F 3d 359 (DC Cir 2014).

29 Kiobel v Royal Dutch Petroleum Co. 133 S Ct 1659 (2013)

30 Human Rights Council, ‘Principles for Responsible Contracts: Integrating the Management of Human Rights Risks into State–Investor Contract Negotiations: Guidance for Negotiators’, A/HRC/17/31/Add.3 (25 May 2011). Principle 9 contemplates that business should have in place grievance mechanisms for non-contractual parties affected by a project.

31 Gathii, James T, War, Commerce and International Law (Oxford: Oxford University Press, 2010) 216222, 237–42.

32 Sen, Amartya, Choice, Welfare and Measurement (Oxford: Basil Blackwell, 1983) 82104, as quoted by Self, Peter, Government by the Market? The Politics of Public Choice (London: Macmillan, 1993) 9.

33 Schachter, Oscar, International Law in Theory and Practice (Dordrecht: Nijhoff, 1991) 3537.

34 See, e.g., Nardin, Terry, Law, Morality and the Relations of States (Princeton, NJ: Princeton University Press, 1983) 19. See also Nye, Joseph S, The Paradox of American Power: Why the World’s Only Superpower Can’t Go It Alone (New York: Oxford University Press, 2003).

35 Our focus in this article is on oil, natural gas, and mining.

36 On debunking ‘the myth of contract as apolitical’, see Affolder, Natasha A, ‘Rethinking Environmental Contracting’ (2010) 21 Journal of Environmental Law and Practice 155, 176.

37 See Cotula, Lorenzo and Tienhaara, Kyla, ‘Reconfiguring Investment Contracts to Promote Sustainable Development’ in Karl P Sauvant (ed.), Yearbook on International Investment Law and Policy 2011–2012 (Oxford: Oxford University Press, 2013) 281, 282.

38 Tienhaara, Kyla, ‘Foreign Investment Contracts in the Oil and Gas Sector: A Survey of Environmentally Relevant Clauses’ (2011) 3 Sustainable Development Law and Policy 15.

39 See, e.g., Principles for Responsible Contracts, note 30; Model Mining Development Agreement Project, ‘Model Mine Development Agreement’ (MMDA) (04 April 2011), http://www.mmdaproject.org/presentations/MMDA1_0_110404Bookletv3.pdf (accessed 1 August 2015); Lorenzo Cotula, Investment Contracts and Sustainable Development: How to Make Contractors for Fairer and More Sustainable Natural Resource Investments (London: International Institute for Environment and Development, 2010).

40 But see Sarkar, Sunrita et al, Mining Community Development Agreements Practical Experiences and Field Studies (Washington DC: The World Bank, 2010).

41 We use the term ‘tripartite’ in this article to identify the type of parties involved in a contract rather than the number of the actual parties. While there could be more than three parties, we refer to a contract as a tripartite agreement if it involves three types of parties: governments, investors, and local communities.

42 This is not an exhaustive study for two reasons. First, too many extractive industry contracts exist to offer a comprehensive study in an article of this length. Second, many extractive industry contracts remain confidential (even though access to contracts has improved with some of the initiatives to further transparency) making a comprehensive study of these important instruments difficult. Hence the choice of contracts discussed in this article is influenced by availability in the public domain. Tienhaara, note 38, is a very useful resource for some of the contracts discussed in Part V(B)(1). In spite of the limitations generated by availability of contracts, this article offers a critical review of a wide variety of extractive industry contracts in multiple jurisdictions. On transparency, see generally Rosenblum and Maples, note 24.

43 Rosenblum and Maples note that ‘a typical oil project could have around 100 contracts supporting and flowing from the project. Most of these contracts are between private parties, such as contractors and sub-contractors, private banks, and individual financiers’. Ibid, 18

44 See, e.g., Agreement among the Azerbaijan Republic, Georgia and the Republic of Turkey relating to the Transportation of Petroleum via the Territories of the Azerbaijan Republic, Georgia and the Republic of Turkey through the Baku-Tbilisi-Ceyhan Main Export Pipeline (18 November 1999).

45 Affolder, Natasha, ‘Why Study Large Projects? Environmental Regulation’s Neglected Frontier’ (2011) 44 University of British Columbia Law Review 521, 526.

46 Rosenblum and Maples, note 24, 18. We do not address the myriad of contracts that a company might form with contractors and service providers or for purposes such as sale or transportation of the resources. We also do not discuss government–local community contracts. For examples of these agreements, see Government of British Columbia, ‘First Nations Negotiations’, http://www2.gov.bc.ca/gov/content/environment/natural-resource-stewardship/consulting-with-first-nations/first-nations-negotiations (accessed 2 August 2015).

47 Omorogbe, Yinka, The Oil and Gas Industry: Exploration and Production Contracts (Oxford: Malthouse Press, 1997).

48 See, e.g., Tienhaara, note 38.

49 Ibid, 16.

50 See generally Affolder, note 36.

51 See Ako, Rhuks Temitope, Environmental Justice in Developing Countries: Perspectives from Africa and Asia-Pacific (London/New York: Routledge, 2013).

52 See generally Deketelaere, Kurt and Orts, Eric W (eds.), Environmental Contracts: Comparative Approaches to Regulatory Innovation in the United States and Europe (London: Kluwer Law International, 2001).

53 Affolder, note 36, 156.

54 Canadian Institute of Resources Law, ‘Independent Review of the BHP Diamond Mine Process’ (30 June 1997), http://www.aadnc-aandc.gc.ca/eng/1100100036028/1100100036030 (accessed 2 August 2015).

55 Ibid, 18.

56 Ibid.

57 ‘Environmental Agreement between Her Majesty the Queen in Right of Canada and the Government of the Northwest Territories and Diavik Diamond Mines Inc. and Dogrib Treaty 11 Council and Lutsel K’E Dene Band and Yellowknives Dene First Nation and North Slave Metis Alliance and Kitikmeot Inuit Association’ (8 March 2000), http://www.emab.ca/Portals/0/Documents/diavik_enviro_agree.pdf (accessed 2 August 2015) (Diavik Environmental Agreement).

58 ‘Environmental Agreement between Her Majesty the Queen in Right of Canada and the Government of the Northwest Territories and De Beers Canada Mining Inc. and Dogrib Treaty 11 Council and Lutsel K’E Dene Band and Yellowknives Dene First Nation and North Slave Metis Alliance (2004), http://www.slema.ca/wp-content/uploads/2011/02/De-Beers-Final-Environmental-Agreement-PDFl.pdf (Snap Lake Environmental Agreement).

59 ‘Snap Lake Environmental Agreement’, ibid, Art 1.1; ‘Diavik Environmental Agreement’, note 57.

60 ‘Diavik Environmental Agreement’, ibid, Art 16; ‘Snap Lake Environmental Agreement’, ibid, Art 13.

61 ‘Snap Lake Environmental Agreement’, ibid, Art 14.1; ‘Diavik Environmental Agreement’, ibid, Art 17.1.

62 Amnesty International has released some reports on the implications of extractive projects and the contracts that serve as the legal background for these projects. See International, Amnesty, Human Rights on the Line: The Baku-Tbilisi-Ceyhan Pipeline Project (London: Amnesty International, 2003); International, Amnesty, Contracting Out of Human Rights: The Chad-Cameroon Pipeline Project (London: Amnesty International, 2005).

63 On corporations and alleged human rights abuses, see generally Report of the Special Representative of the Secretary-General, ‘Human Rights and Transnational Corporations and other Business Enterprises (Corporations and Human Rights: A Survey of the Scope and Patterns of Alleged Corporate-Related Human Rights Abuse)’, A/HRC/8/5/Add.2 (23 May 2008).

64 Social and Economic Rights Action Center and the Center for Economic and Social Rights v Federal Republic of Nigeria, African Commission on Human and Peoples’ Rights, Communication No 155/96; Wiwa et al v Royal Dutch Petroleum et al, 226 F 3d 88, (2000); Kiobel v Royal Dutch Petroleum Co, note 29.

65 Simons and Macklin, note 21; Presbyterian Church of Sudan v Talisman Energy 583 F 3d 244 (2009).

66 See Choc v Hudbay Minerals Inc. 2013 ONSC 1414. Hudbay Minerals is a Canadian corporation being sued in the courts of its home state.

67 ‘The Baku-Tbilisi-Ceyhan Pipeline Company, BTC Human Rights Undertaking’ (22 September 2003), www.thecornerhouse.org.uk/sites/thecornerhouse.org.uk/files/Human%20Rights%20Undertaking.pdf (accessed 2 August 2015).

68 For discussion of the BTC Human Rights Undertaking, see Černič, Jernej Lernar, Human Rights Law and Business: Corporate Responsibility for Fundamental Human Rights (Netherlands: Europa Law Publishing, 2010) 241243.

69 Lawson-Remer, Terra Eve, ‘A Role for the International Finance Corporation in Integrating Environmental and Human Rights Standards into Core Project Covenants: Case Study of the Baku-Tbilisi-Ceyhan Oil Pipeline Project’ in Olivier De Schutter (ed.), Transnational Corporations and Human Rights (Oxford: Hart Publishing, 2006) 393, 416420 (noting at 419 that ‘the Undertaking does not establish the right of locally affected populations to hold the BTC Co accountable for injuries relating to human rights, health, safety or the environment. … it remains solely up to the host governments to demand redress from BTC Co for any breach of its human rights commitments’).

70 See Art 2(a) of the Agreement of 11 January 1939 between the Sheikh of Abu Dhabi and Petroleum Development (Trucial Coast) Limited, cited in Petroleum Development (Trucial Coast) Ltd. v Sheikh of Abu Dhabi (1951) 18 ILR 144, 147.

71 See Petroleum Development (Qatar) Ltd. v Ruler of Qatar (1951) 18 ILR 161. These agreements often excluded religious sites, cemeteries, and other similar lands.

72 Hyde, James N, ‘Economic Development Agreements’ (1962) 105 Recueil des cours 271; Curtis, Christopher T, ‘The Legal Security of Economic Development Agreements’ (1988) 29 Harvard International Law Journal 317.

73 UN General Assembly, ‘Declaration on the Establishment of a New International Economic Order’, A/RES/S-6/3201 (1 May 1974).

74 UN General Assembly, ‘Charter of Economic Rights and Duties of States’, A/RES/29/3281 (12 December 1974)

75 See Texaco Overseas Oil Petroleum Co. v Libyan Arab Republic (1979) 53 ILR 389.

76 See generally Dolzer, Rudolf and Schreuer, Christoph, Principles of International Investment Law (Oxford: Oxford University Press, 2012).

77 In this section, we only focus on the major agreements between states and investors, that is, the agreements that grant the rights to develop extractive resources.

78 ‘West African Gas Pipeline Project International Project Agreement between the Republic of Benin, the Republic of Ghana, the Federal Republic of Nigeria, the Republic of Togo and the West African Gas Pipeline Company Limited’ (22 May 2003) (WAGP IPA).

79 Model Agreements could be significantly modified through the negotiation process for a contract. Nevertheless, these models offer an opportunity to assess some of the prevailing terms in state–investor contracts.

80 For Community Development Agreements, see the discussion in Part V (B)(2) of this article.

81 See ‘Socio-Economic Agreement: BHP Diamonds Project between Government of the Northwest Territories (Canada) and BHP Diamonds Inc.’ (22 October 1996), http://www.miningnorth.com/wp-content/uploads/2011/10/EKATI-Socio-Economic-Agreement.pdf (BHP Socio-Economic Agreement 1996).

82 Ibid, para. G.

83 See ‘Impact Benefit Agreement under Mineral Exploitation Licence 2014/21 between the Licensee under the Exploration Licence as represented by True North Gems Greenland A/S and Municipality of Kimmuneqarfik Sermersooq and Greenland Government’ (June 2014), http://naalakkersuisut.gl/~/media/Nanoq/Files/Publications/Raastof/ENG/Signed%20IBA%20TNG%20ENG%2016%2006.pdf (Greenland: True North IBA 2014); ‘Impact Benefit Agreement under Licences 2008/11, 2002/15, 2005/16 and 2011/16 for 2011 between the Licensee under the Licence as represented by Capricorn Greenland Exploration 1 Limited and Municipality of Qaasultsup, Municipality of Qeqqata, Municipality of Sermersooq and Government of Greenland’ (June 2011), http://www.qaasuitsup.gl/~/media/Files/Erhverv/Olie-og-mineraler/IBA-aftaler/IBA-Cairn-2011.ashx (accessed 2 August 2015).

84 ‘Greenland: True North IBA 2014’, ibid, cl 2.1.4(1).

85 See ‘Production Sharing Contract dated 12 June 1973 between Nigerian National Oil Corporation and Ashland Oil (Nigeria) Company’ Basic Oil Laws and Concession Contracts (New York: Barrows Co, 1979) (‘Nigeria-Ashland PSA 1973’). See also ‘Production Sharing Contract between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (PERTAMINA) and Apex (Bengara-II) Ltd.’ (4 December 1997).

86 Other agreements further define the financial incentives and other financial aspects of state–investor relationships. See, e.g., ‘Memorandum of Understanding Dated 17 January 1986 between Ashland Oil and Nigeria on Incentives for Enhancing Crude Oil Exports and Encouraging Investments in Exploration and Development Activities’ Basic Oil Laws and Concession Contracts (New York: Barrows Co, 1990).

87 For some of the clauses in the earlier PSCs that include some relevant provisions, see ‘Nigeria-Ashland PSA 1973’, note 85, cl 5(i)(c)/(h)/(j) and cl 6(xii), 12. See also ‘1988 Operating Agreement between Nigerian National Petroleum Corporation and Topcon Company (Texaco Overseas)’ Basic Oil Laws and Concession Contracts (New York: Barrows Co, 1993), cl 6.1.2 and cl 15.1. The relevant earlier clauses were also often framed in general terms that could be difficult to adopt as grounds for legal liability for non-performance and Nigeria’s model PSCs in the early 1990s were not very different. See ‘Production Sharing Contract of March 1991 between Government Agency and International Companies (Nigeria)’ Basic Oil Laws and Concession Contracts (New York: Barrows Co, 1991). See also ‘Model Convention of Establishment 1990 (Cameroon)’ Basic Oil Laws and Concession Contracts (New York: Barrows Co, 1992).

88 See Article 25 of the ‘Model Production Sharing Agreement between the Government of the United Republic of Tanzania and Tanzania Petroleum Development Corporation and ______’ (2013) which spans four pages and makes specific references to particular statutes and standards.

89 ‘Petroleum Agreement among Government of the Republic of Ghana, Ghana National Petroleum Corporation and Tullow Ghana Limited, Sabre Oil and Gas Limited, Kosmos Energy Ghana HC in Respect of the Deepwater Tano Contract Area’ (10 March 2006).

90 ‘Restated and Amended Production Sharing Contract between the Republic of Liberia by and through National Oil Company of Liberia and ExxonMobil Exploration and Production Liberia Limited and Canadian Overseas Petroleum (Bermuda) Limited, Liberia, Offshore Block 13’ (8 March, 2013) Art 6.

91 ‘Model Production Sharing Contract, Eighth Offer of Blocks, Ministry of Petroleum and Natural Gas – Government of India, 2009’ Art 8.3(k) (India, Model PSC 2009).

92 Ibid, Art 14.

93 Ibid, Art 14.1(b)(ii). Kenya’s Model PSC also includes a provision regarding ‘reasonable compensation’ for losses suffered. See ‘Republic of Kenya, Production Sharing Contract between the Government of the Republic of Kenya and ______ Relating to Block _____’, sec 9(2).

94 ‘Uganda: Model Production Sharing Agreement of August 1999 for Petroleum Exploration, Development and Production in Uganda’, Art 22.5 (Uganda, Model PSA 1999).

95 ‘Exploration and Production Concession Contract between the Government of the Republic of Mozambique and ___ for Mozambique Block’ (2006), Art 28.3(a) (Mozambique Model Concession Contract 2006).

96 ‘Production Sharing Contract for Taq Taq and Kewa Chirmila Areas in the Kurdistan Region between the Kurdistan Regional Government of Iraq and Genel Energy International Limited and Addax Petroleum International Limited’ (26 February 2008), Art 35.1. Article 16.8 also provides that ‘[t]he Contractor shall be responsible for any loss or damage caused to third parties by its or its Subcontractors’ personnel solely and directly resulting from their negligence, errors or omissions in accordance with applicable Kurdistan Region Law’. See also Article 17 regarding compensation for occupation and use of land.

97 See ‘Agreement on the Joint Development and Production Sharing for the Azeri and Chirag Fields and the Deep Water Portion of the Gunashli Field in the Azerbaijan Sector of the Caspian Sea among the State Oil Company of the Azerbaijan Republic and Amoco Caspian Sea Petroleum Limited, BP Exploration (Caspian Sea) Limited and others’ (20 September 1994) Art 26.5 (noting that the ‘Contractor shall be liable for those direct losses or damages incurred by a Third Party (other than the Government) arising out of any environmental pollution determined by the appropriate court of the Azerbaijan Republic to have been caused by the fault of the Contractor’). See also ‘Model Production Sharing Contract Bangladesh (2008)’, Art 10.21.

98 ‘Concession Agreement for the Exploration, Development and Production of Oil and Natural Gas by and between Agencia Nacional Do Petroleo, Gas Natural E Biocombustiveis – ANP and ___’ (2008) Art 21.2 (Brazil Model Concession 2008].

99 Ibid, Art 21.5.

100 Ibid, Art 23.1.

101 Ibid, Annex V(d) (noting that the Concessionaire will pay ‘to the landowners of equivalent participation to 1% (one percent) of the Oil and Natural Gas Production, in accordance with the applicable Brazilian legislation’.

102 Cotula reports that a Stability Agreement (2003) between the Government of Ghana and AngloGold Ltd. provides that the investor would establish community trusts for the mines and contribute one percent of profits to work in the communities. The Production Sharing Agreement (1997) for the Kashagan oil field in Kazakhstan ‘requires the consortium to pay 1 per cent of the annual oil development expenditures of US$5 million (whichever is greater) to fund social and infrastructure projects proposed by local governments.’ Cotula, note 39, 6.4, para. 61.

103 ‘The Government of the Republic of Zambia and Mopani Copper Mines Plc: Mufulira Mine, Smelter and Refinery and Nkana Mines, Concentrator and Cobalt Plant Development Agreement’ (31 March 2000); ‘The Government of Zambia and Konkola Copper Mines Plc: Amended and Restated Development Agreement’ (2000).

104 The Mines and Minerals Development Act 2008 (Zambia), sec 160(1). See Lungu, John, ‘Copper Mining Agreements in Zambia: Renegotiation or Law Reform?’ (2008) 11 Review of African Political Economy 403; Anthony Simpasa et al, ‘Capturing Mineral Revenues in Zambia: Past Trends and Future Prospects’, Discussion Paper (August 2013), http://www.un.org/en/land-natural-resources-conflict/pdfs/capturing-mineral-revenues-zambia.pdf (accessed 2 August 2015).

105 See Gathii, ‘Third Party Beneficiary’, note 11; Odumosu-Ayanu, Ibironke T, ‘Governments, Investors and Local Communities: Analysis of a Multi-Actor Investment Agreement Framework’ (2014) 15 Melbourne Journal of International Law 473, 496–7.

106 ‘WAGP IPA’, note 78.

107 Ibid, clause 51, noting that ‘[a] person who is not a party to this Agreement shall have no right under the Contract (Rights of Third Parties) Act 1999 to enforce any of its terms’.

108 See Brazil Model Concession 2008, note 98, Art 35.4 (noting that ‘[t]he ANP shall publish the full text or summary of the terms of this Agreement in the Federal Official Gazette for purposes of its validity erga omnes’. See also ‘Concession Agreement for the Exploration, Development and Production of Oil and Natural Gas by and between Agencia Nacional Do Petroleo and ___’ (2001) Art 35.4.

109 Mann, Howard et al, IISD Report: Model Mining Development Agreement – Transparency Template (Winnipeg: The International Institute for Sustainable Development, 2012) 3.

110 Most CDAs are formed between investors and local communities but some CDAs also involve government actors.

111 For an example of CDAs required by statute, see Minerals and Mining Act 2007 (Nigeria), secs 116 and117; Mines and Minerals Act 2009 (Sierra Leone) secs 139–41; Mining Act 2012 (South Sudan).

112 See, e.g., ‘Argyle Diamond Mine Participation Agreement: Management Plan Agreement between Argyle Diamonds Limited and Argyle Diamond Pty. Limited and Traditional Owners’ (1 January 2004) (‘Argyle Diamond Mine Participation Agreement’).

113 See the discussion and the accompanying text in notes 145–53 of this article.

114 Newmont, a transnational mining company, concluded a series of agreements with the Chiefs and people of the Ahafo Mine Local Community in Ghana. See ‘The Ahafo Social Responsibility Agreement between the Ahafo Mine Local Community and Newmont Ghana Gold Ltd.’ (29 May 2008) (‘Social Responsibility Agreement’); ‘Agreement between Newmont Ahafo Development Foundation and Newmont Ghana Gold Ltd.’ (29 May 2008) (‘Ahafo Development Foundation Agreement’); ‘Agreement between Newmont Ghana Gold Ltd. and the Ahafo Mine Local Community on Local Employment’ (29 May 2008) (‘Ahafo Local Employment Agreement’). For a discussion of CDAs in Ghana, see Odumosu-Ayanu, Ibironke T, ‘Foreign Direct Investment Catalysts in West Africa: Interactions with Local Content Law and Industry-Community Agreements’ (2012) 35 North Carolina Central Law Review 65, 80–87.

115 See note 83 and the accompanying text.

116 For a discussion of CDAs known in Nigeria’s oil and gas industry as the Global Memorandum of Understanding, see Odumosu-Ayanu, note 105.

117 Papua New Guinea CDAs include CDAs related to liquefied natural gas as well as solid minerals. PNG Mineral Resources Authority, ‘Tolukuma Mining Project MOA Review’, http://www.mra.gov.pg/Home/tabid/217/ctl/ViewItem/mid/881/ItemId/63/Default.aspx?SkinSrc=/Portals/_default/Skins/ExactBusiness/Green-Gray&ContainerSrc=/Portals/_default/Containers/DarkKnight/PageTitle_Blue (accessed 2 August 2015).

118 See O’Faircheallaigh, Ciaran, ‘Understanding Corporate-Aboriginal Agreements on Mineral Development: A Conceptual Framework’ in Ciaran O’Faircheallaigh and Saleem Ali (eds.), Earth Matters: Indigenous Peoples, the Extractive Industries and Corporate Social Responsibility (Sheffield: Greenleaf Publishing Ltd., 2008) 67.

119 Keeping, Janet, ‘Thinking about Benefits Agreements: An Analytical Framework’, Canadian Arctic Resources Committee Northern Minerals Program Working Paper No 4, http://www.carc.org/pdfs/NMPWorkingPaper4Keeping.pdf (accessed 2 August 2015).

120 See Odumosu-Ayanu, note 105, 480.

121 Brereton, David, Owen, John, Kim, and Julie, ‘Good Practice Note: Community Development Agreements’, Centre for Social Responsibility in Mining (26 September 2011) 4, https://www.csrm.uq.edu.au/Portals/0/docs/CSRM-CDA-report.pdf (accessed 2 August 2015).

122 Minerals and Mining Act 2007 (Nigeria).

123 The Canadian IBAs discussed in this section are related to development on indigenous lands.

124 See Brereton, Owen, and Kim, note 121, 65.

125 Chevron notes that the purpose of its CDAs (known as Global Memorandum of Understanding in Nigeria’s oil and gas industry) ‘is to bring peace and stability to areas where Chevron operates’. Chevron, ‘Nigeria: In the Community’ (May 2014), http://www.chevron.com/countries/nigeria/inthecommunity/ (accessed 2 August 2015).

126 See Trebeck, Katherine, ‘Corporate Social Responsibility and Democratisation: Opportunities and Obstacles’ in O’Faircheallaigh and Ali (eds.), note 118, 1213.

127 Cotula, note 39, box 2.

128 Ibid.

129 See Minerals and Mining Act 2007 (Nigeria), sec 116(3). According to this provision, CDAs are to include issues such as employment, apprenticeship, training, scholarships, and financial support for the development and maintenance of infrastructure including roads.

130 See ‘Agreement between the Inuit of the Nunavut Settlement Area and Her Majesty the Queen in Right of Canada’ (25 May 1993) sec 26 and schedule 26-1. Schedule 26-1 provides a list of ‘matters considered appropriate for Inuit benefits’ including training, preferential hiring, scholarships, business opportunities, housing, safety, health, and hygiene. In addition, schedule 26-1 includes arbitration on this list of matters considered appropriate for Inuit benefits.

131 See Newmont Ahafo Development Foundation ‘2009 Annual Report: Creating Sustainable Futures through Partnerships’ (2009) 4, http://www.nadef.org/downloads/2/228.pdf (accessed 2 August 2015).

132 ‘Social Responsibility Agreement’, note 114, sch 1, sec 1.

133 Ibid.

135 Ibid.

136 Ibid, sec 22.

137 Ibid, sec 2.

138 Ibid, sec 4.2. Section 23 provides for ‘Conflict Resolution Management’.

139 ‘Ahafo Local Employment Agreement’, note 114, sec 1.1.

140 Ibid, sec 1.1.

141 ‘Ahafo Development Foundation Agreement’, note 114, sec 11.1(i).

142 Ibid, sections 21.1 and 21.2.

143 See Pauwelyn, Wessel, and Wouters, note 12, arguing that informal international law-making promotes accountability mechanisms and accountability-promoting measures beyond classical accountability mechanisms such as litigation.

144 Affolder, Natasha, ‘Transnational Conservation Contracts’ (2012) 25 Leiden Journal of International Law 443, 444 argues that: The choice of describing transnational conservation agreements as “contracts” is a deliberate one. These agreements vary significantly. Some are legally binding; others are not. Many examples might more appropriately be described as ledges, or restrictive covenant, or commitments, or some more amorphously as “voluntary agreements” or “hybrid agreements”. But speaking the language of contracting encourages a legal analysis of these agreements, which might otherwise not take place. … One of the consequences of the fact that conservation contracts largely escape the scrutiny of lawyers is that their legality is rarely investigated. Talking about these agreements as “contracts” invites a closer look at the text of these agreements and their legality’.

145 Caine, Ken J and Krogman, Naomi, ‘Powerful or Just Plain Power-Full? A Power Analysis of Impact and Benefit Agreements in Canada’s North’ (2010) 23 Organization & Environment 76, 77.

146 See, e.g., ‘Inuit Impact and Benefit Agreement for National Wildlife Areas and Migratory Bird Sanctuaries in the Nunavut Settlement Area between the Inuit of the Nunavut Settlement Area and Her Majesty the Queen in Right of Canada’, http://www.qia.ca/sites/default/files/files/Publications/IIBA-NWA-MBS-NSA-Final-ENG.pdf (accessed 2 August 2015).

147 ‘Inuit Impact and Benefit Agreement between Qikiqtani Inuit Association and Baffinland Iron Mines Corporation’, secs 2.5 and 4.4.1 creating a ‘Senior Executive Committee’ and a ‘Management Committee’ qia.ca/sites/default/files/files/Publications/qia_-_baffinland_-_iiba.pdf(accessed 2 August 2015) (‘Mary River IIBA’); ‘Collaboration Agreement between the Northern Village of Pinehouse and Kineepik Metis Local Inc. and Cameco Corporation and Areva Resources Canada Inc.’ (12 December, 2012) sec 4.1(a)/(c) creating a ‘Joint Implementation Committee’, http://www.pinehouselake.ca/images/pdf/Collaboration%20Agreement.pdf (accessed 2 August 2015) (‘Pinehouse Agreement’).

148 See, e.g., ‘Mary River IIBA’, ibid, secs 4.3.2, 4.5.2, and 5; ‘Pinehouse Agreement’, ibid, sec 4.1(f) and schs C5, 6 and 7.

149 See, e.g., ‘Mary River IIBA’, ibid, sections 7.3.1, 7.14, 7.12.1–2, and 7.12.4; ‘Pinehouse Agreement’, ibid, sec D10.

150 See, e.g., ‘Mary River IIBA’, ibid, sec 6; ‘Pinehouse Agreement’, ibid, sec E4.

151 See, e.g., ‘Mary River IIBA’, ibid, secs 8.1.3, 8.1.5, 8.4.5, 8.6.1, 8.7.2, and 8.8.1; ‘Pinehouse Agreement’, ibid, secs D7, D9, and F9.

152 See, e.g., ‘Mary River IIBA’, ibid, secs 15.2, 17.2.3, and 17.5–17.6.

153 See the dispute settlement clauses of the ‘Mary River IIBAs’, ibid.

154 ‘The Draft Raglan Agreement entered into between Makivik Corporation, Qarqalik Landholding Corporation of Salluit, Northern Village Corporation of Salluit, Nunatulik Landholding Corporation of Kangiqsujuaq, Northern Village Corporation of Kangiqsujuaq and Societe Miniere Raglan du Quebec Ltee, to which intervened Falconbridge Limited’ (25 January 1995) sec 9.3, http://pubs.aina.ucalgary.ca/makivik/ci236.pdf (accessed 2 August 2015).

155 ‘Argyle Diamond Mine Participation Agreement’, note 112.

156 Ibid.

157 MMDA, note 39.

158 Cotula, note 39, 3.2, para. 25. Cotula cites some examples including ‘a 2008 land lease between Mondi Ltd, a South African timber company, and the Siyathokoza Community Trust in South Africa’ and another agreement between an Indian company and ‘13 associations of local landholders’ in Madagascar.

159 Ballem, John Bishop, The Oil and Gas Lease in Canada (Toronto: University of Toronto Press, 2008); Lucas, Alastair R and Hunt, Constance D, Oil and Gas Law in Canada (Toronto: Carswell, 1990).

160 See the discussion in footnotes 54–61 and the accompanying text.

161 ‘Snap Lake Environmental Agreement’, note 58.

162 See, e.g., ‘ALMAC Exploration Contract Conditions (Schedule 2 to Framework ILUA)’, http://ccsi.columbia.edu/files/2015/01/Australia-Antakirinja-Native-Title-Group-SACOME-2003-Template-Contract-Conditions.pdf (accessed 2 August 2015).

163 Cotula, note 39, box 3; McHugh, Paul G, Aboriginal Title: The Modern Jurisprudence of Tribal Land Rights (Oxford: Oxford University Press, 2011) 200. See also Department of International Relation and Cooperation, South Africa, ‘Statement on the Cabinet Meeting’ (08 August 2007), http://www.dfa.gov.za/docs/2007/cabinet0808.html (accessed 2 August 2015).

164 Newman, Dwight, Natural Resource Jurisdiction in Canada (Toronto: LexisNexis, 2013) 99101, arguing that there are potential benefits from appropriately constructed IBAs for industry and Aboriginal communities.

165 See Odumosu-Ayanu, note 105, 499–500. For a critique of Canada’s IBAs, see Cameron, Emilie and Levitan, Tyler, ‘Impact and Benefit Agreements and the Neoliberalization of Resource Governance and Indigenous-State Relations in Northern Canada’ (2014) 93 Studies in Political Economy 23.

166 See, e.g., ‘Uganda Model PSA 1999’, note 94, Art 22.4(a), which states that the Licensee shall ‘conduct the Petroleum Operations in a manner likely to promote the conservation of the natural resources of Uganda and the protection of its environment’ (emphasis added). See also ‘Mozambique Model Concession Contract 2006’, note 94, Art 18.2, noting that ‘the Concessionaire shall endeavour to utilize citizens of the Republic of Mozambique having appropriate qualifications to the maximum extent possible at all levels of its organization …’ (emphasis added).

167 Caine and Krogman, note 145, 80.

168 ‘Pinehouse Agreement’, note 147, sec 5.1.

169 Ibid, sec 5.1(c).

170 UN General Assembly, ‘United Nations Declaration on the Rights of Indigenous Peoples’, GA Res 61/295 (13 September 2007), Art 32(2) (‘UNDRIP’).

171 Fidler, Courtney and Hitch, Michael, ‘Impact Benefit Agreements: A Contentious Issue for Environmental and Aboriginal Justice’ (2007) 35 Environments Journal 49, 57.

172 Caine and Krogman, note 145, 85.

173 See Cameron and Levitan, note 165, 40. See also Macdonald, Fiona, ‘Indigenous Peoples and Neoliberal “Privatization” in Canada: Opportunities, Cautions and Constraints’ (2011) 44 Canadian Journal of Political Science 257; Howlett, Cathy et al, ‘Neoliberalism, Mineral Development and Indigenous People: A Framework for Analysis’ (2011) 42 Australian Geographer 309.

174 See UNDRIP, note 170, Arts 3 and 4.

175 On neo-liberalism and indigenous self-determination, see Slowey, Gabrielle, Navigating Neoliberalism: Self-Determination and the Mikisew Cree First Nation (Vancouver/Toronto: University of British Columbia Press, 2008).

* Wing-Tat Lee Chair in International Law and Professor of Law, Loyola University Chicago School of Law.

** Associate Professor, College of Law, University of Saskatchewan. Thanks to the Social Sciences and Humanities Research Council (Canada) and the Law Foundation of Saskatchewan for providing research funds for aspects of the research presented in this article and to Olufunmi Ayotunde and Janelle Souter for excellent research assistance.

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