Thank you for replying Sam.
I have spent some time reviewing the material you have highlighted and note your observations on the difficulty surrounding ‘model contracts’ and respect, of course, the fact that all situations will require a tailored approach and so there can be no “one size fits all” solution.
My background is in land administration reform and I have spent quite some time sitting across the table from investors, government and community stakeholders (in Nigeria Primarily) trying to unpick the issues around large scale contracts. Typically the investor has engaged directly with government to identify and acquire a site. The government actors have scant knowledge of the ‘rules’ surrounding land acquisition, environmental impact and social concerns and so propose a site to the investor. The investor, who also typically demonstrate no knowledge of local laws etc. take up the land on the basis of reassurances offered by the government.
At some point along that journey communities, or community leaders, will be engaged and some version of the vision of the impact of the investment will be made. That engagement is typically brief, simplistic and, perhaps, downright wrong. And maybe a few $$s change hands.
So the investment starts, communities resist, the investment fails and all we end with is a land grab, displaced people, unrest and an eventual change to a new set of politicians that repeat the system year on year.
So I offer a simplistic interpretation of the approach offered re the OpenContracts resource on offer.
Actor A wants a car (or a land investment). What is currently available is the opportunity to look at a lot of other cars by scrutinising a lot of the details of other cars to learn how other cars are made. After wading through a million and one descriptions of other cars the expectation is that Actor A will be well placed to build their own car on the assumption that all of that reading will have (a) educated them in what a good car should be, (b) how to manage and run that car and © enjoy all of the peripheral infrastructure required to use that car.
So I want to draft an investment contract?? Is the expectation that all stakeholders go through all of the contracts available to distil an optimal contract from all of the prior examples? In my experience it is very unlikely that the actors will have the necessary skills (or preparedness) to pursue such a course.
Which brings me back to my original conundrum. Obviously a ‘perfect’ skeleton or model contract is not possible but surely it is possible to create a check list or an algorithm for these contracts. Not all investors or governments (or communities) may want to follow such a route but more far-sighted, ethically minded stakeholders would value such a resource. Even the big international investors, and I’ll name no names, send teams to negotiate deals that have no knowledge of the sort of issues raised on this site but they would welcome any assistance possible to ensure more responsible and inclusive outcomes. As things stand they rely on fudged deals with local players that know no better because of capacity gaps more than any spirit of corruption but most aspire to a higher standard.
The resources you linked to in your reply highlight the fact that there are some fundamental questions to be asked in evaluating any contract. This isn’t the place to go through everything but:
- Can we align the contract to VGGT/IFC/PRAI/AU guidelines etc etc and if so which?
- Having identified the guidelines what processes need to be factored in to contract negotiation?
- How can safeguards be secured through existing laws?
- Do new laws need to be passed?
- What redress mechanisms are available when parties renege?
- How will the land be acquired fairly?
- Are all legal mechanisms timebound?
- Are legal processes transparent?
The lawyers on here will howl at the over simplification but ultimately it is the local legislation and judiciary that are key to enforcement and they need to be accountable.
In my experience the pursuit, and alleged attainment, of the FPIC so often recommended in investment rarely engages with all of the necessary stakeholders. The most fundamental checklist box to be ticked in pursuit of investment is “have you identified and engaged with everyone relevant and do they all demonstrate a thorough knowledge of the implications of the deal?” rather than " have you had a cosy chat with the investor and the state?"
Most people wanting to buy a car read a few brochures or visit a showroom and choose the model that best suits their needs. Very few people have the capacity to read a lot of technical manuals and then craft every component into a Rolls Royce.
In closing I agree that the resource is great and many valuable insights are available from the docs therein. The ground reality is, however, that local actors in developing countries won’t necessarily know that the resource exists and, if they do, may be unlikely to generate an optimal solution by analysing the examples therein. The other resources offer great technical insights and observations but again place significant demands on the reader to attain meaningful insight.