Dear Friends and Colleagues
Global Investment Regime Facilitates Land and Water Grabbing
A brief by the Transnational Institute explores the impact of international investment treaties on local land governance. Over 3,200 such treaties have been signed in the last two decades, mostly by way of Bilateral Investment Treaties (BITs). These represent the backbone of a corporate rights regime that protects the US$20 trillion of Foreign Direct Investment (FDI) flows globally. FDI, usually packaged as large-scale ‘investments for rural development’, often captures land, water and associated resources of the host country.
BITs typically have an investor-state dispute settlement (ISDS) mechanism, which gives large-scale investors far-reaching protection, curtailing, or threatening to curtail, governments’ ability to regulate for progressive agrarian and agricultural policies including addressing violations such as land and water grabbing by the investors. The ISDS allows foreign investors to sue governments directly in private international arbitration tribunals outside the regular national court system; such actions have increased by more than 400 per cent in recent years. Corporate use of international investment law has seriously undermined people’s struggle for land and food sovereignty, including efforts to reverse unjust land and water deals.
In order to strengthen the effectiveness of agrarian social movements’ campaigns to resist land grabbing, the brief proposes two tactical political positions. The first is defensive, where food sovereignty movements can join on-going campaigns to derail, renegotiate or cancel free trade agreements, such as the Trans Pacific Partnership (TPP) Agreement, which contain ISDS provisions. The second is a pro-active stand to reclaim the meaning and regulation of agricultural ‘investment’. This involves replacing an FDI-favoured framework with one that best addresses rural poverty and hunger, and ensures democratic land governance. This in turn necessitates the recognition of small-scale food producers as the rightful primary investors in agriculture and the use of legitimate human rights-based instruments such as the FAO Voluntary Guidelines on the Responsible Governance of Tenure and the Right to Food as recognized by the UN.
With best wishes,
LICENSED TO GRAB
How international investment rules undermine agrarian justice
Over the past two decades a complex web of more than 3,200 investment agreements has developed, mostly in the form of Bilateral Investment Treaties (BITs). These have become the backbone of a corporate rights regime that protects the US$20 trillion of Foreign Direct Investment (FDI) that now flows worldwide.
These treaties grant investors far-reaching rights, limiting state control over transnational capital and constraining governments’ policy-making space. This trend is all the more concerning against the backdrop of the global land and water grab. In many cases of land and water grabs, FDI – in the form of large-scale land deals packaged as ‘investments for rural development’ – captures land and its associated resources. The general rules of the global investment regime are facilitating this process, thereby undermining a human rights-based approach to land governance.
A key provision in many of the investment agreements is a controversial mechanism that allows foreign investors to sue governments in private international arbitration tribunals outside the regular national court system. Investors’ claims through ‘investor-state dispute settlements’ (ISDS) have sky- rocketed by more than 400% in recent years.2 These ISDS cases increasingly challenge public interest environmental and health policies and include cases (in the global north and south) where the corporate world is using the ISDS framework to limit governments’ ability to address land and water grabbing.
This brief analyses and illustrates how international investment rules thwart the struggle for land and food sovereignty. It puts forward the case that – in sharp contrast to a grassroots-led, human rights-based land and food governance that is emerging to counter land grabs – the global investment regime:
• hinders necessary and important land redistribution and restitution;
• fosters land commodification;
• impedes the reversal of abuses of illegitimate and unjust land (and water) deals; and
• limits the scope of progressive agrarian and agricultural policies that protect small-scale farmers and public health.