Land Grabbing and the New Economic Order: Revenge of the CERDS

The phenomenon of land grabbing involves powerful transnational economic actors, including corporations, national governments, sovereign wealth funds, and private equity funds, that have searched for empty lands in distant countries that can serve as sites for fuel and food production in the event of future price spikes.

Typically, the foreign investors enter long-term leases with national governments for 25 or 50 years on a renewable basis.   However, land rights are a thorny problem the center of the system.  As Ruth Hall, a South African expert on Land Rights, argues there is a conflict between the status of the (usually unregistered) rights of customary landholders and the authority of states to transact lands to which customary claims are made. Indeed, there is growing evidence that many of the lands allocated to the long-term leases are already occupied and used by small-scale farmers.

One of the obstacles that has arisen in confronting land grabbing is the lack of law in the area.   Earlier this year, FAO released new guidelines on land grabbing that are starting to fill the void. The guidelines cover land, forestry and fisheries (not water and other natural resources like minerals). They also offer principles on responsible tenure governance and the legal allocation of tenure rights. In 2010, the World Bank and partners have promulgated a set of Seven Responsible Agricultural Investment Principles for investors, which focused on corporate social responsibility for investors. In response, the UN Special Rapporteur on the Right to Food produced a set of Ten Minimum Principles on the Right to Food.

All of these guidelines, however, are voluntary.  At present, there isn’t much international law has to say about the problem. This gap got me thinking about the relevance of the Charter of Economic Rights and Duties of States (CERDS) which is the legal component of the New International Economic Order (NIEO) Declaration adopted by the UN General Assembly in Resolution 3281 in 1974. Both CERDS and NIEO sought to establish a new system of rights and duties that would redress economic inequalities between developing and developed states.  In essence, its goal was the creation of a just and equitable system that promoted the economic security and independence of developing countries. CERDS was adopted in the wake of the OPEC crisis of 1973, and while 120 states voted in its favor it garnered strong objections from many developed states at the outset.

Although the general consensus has been that CERDs and NIEO have passed into the annals of history, there are some parallels with the attempts to develop rules on land grabbing.  Indeed, would these new instruments be coming to the fore if it hadn’t been for the precedential value of CERDS?  Land grabbing has a north/south dimension, which is reminiscent of some of the colonial era land grabs. What is new is the south/south dynamic, however, given the involvement of countries like Brazil, Qatar, China, India and South Africa. This World Bank Report gives an in depth assessment of the issue.

A major focus of CERDS was sovereignty over natural resources.  Art. 2, the most controversial article, states that every state has full permanent sovereignty, including possession, use and disposal, over all its wealth, natural resources and economic activities. This article also contained a clause that would have permitted compensation after nationalization or expropriation to be determined by the domestic law of the nationalizing State. It is uncontroversial that today, this nationalistic approach to compensation has been overtaken by more exacting standards determined by BITS and other rules of Customary International Law.

In her lucid new book The Right to Development and International Economic Law, Isabella Bunn argues that “elements of  the NIEO survive in the intention and interpretation of the UN Declaration on the Right to Development.”  It is well documented that Article 14 on the Liberalization of Trade was influential during the negotiations for the World Trade Organization.  Indeed, equitable development, technology transfers and the relevance of human rights to economic development have all emanated from NIEO.

Want to know more? I understand that Fred Pearce’s book the Land Grabbers provides a very readable introduction. It’s on my Christmas list.