Corporate Investment in Developing Countries and State’s Responsibility

in Sustainable Management of Natural Resources



Eni E. Alobo

Faculty of Law, University of Calabar - Nigeria Visiting Scholar, Faculty of Law, University of Port Harcourt, Nigeria

Adoga J. Adams

Faculty of Law, University of Calabar

Kevin U. Udungeri

Faculty of Law, University of Calabar, Nigeria, P.M.B. 1115, Calabar. Tel: +234-(0)803-682-2222. Email: aloboenie@yahoo.com


PDF: Download Full-Text Pdf

DOI: http://dx.doi.org/10.31014/aior.1992.01.02.17



Abstract

Environmental squalor has continued to create hostile challenges for health and economic development in Nigeria. Some of these glitches include deforestation, pollution, global warming, etc. Despite environmental laws and policies targeted at eradicating these problems, the situation in Nigeria seems deteriorating due to the fact that these laws are not meritoriously enforced. In this article, we have critically evaluated some of the notable laws and regulations governing the oil and gas sector designed to protect the environment against harmful activities. The consequence that flowed from this evaluation is the realisation that despite the efforts of the government in establishing laws and regulations to protect the environment, there have been very little positive results in the area of effective implementation and enforcement of these laws. This we discovered was attributable to the lack of political will on the part of the government and the serious challenge of regulating Multi-National Corporations due to their economic strength and their transnational nature. Again, our appraisal clearly established that although there are laws regulating the oil industry of Nigeria, some of these laws are very old and of no consequence, while others do not have direct control over corporate operations and Multi-National Corporations. This has created regulation and implementation gap and the attendant negative consequences on the Nigerian environment. In this connection, we have elicited and recommended practical solutions to these problems to enable government to strikes the delicate balance between the need to encourage corporate investment and the necessity to protect the environment from the resulting hazards.


Introduction

The end of the Second World War saw the colonial powers losing grip of their former colonies with the emergence of independent States (Nico, 1997). The post-colonial States began agitating for autonomy over the management of their natural resources to foster socio-economic development of their territories (Orla and Pereira 2013). This agitation gained prominence at the international plane and culminated in a series of United Nations General Assembly (UNGA) resolutions on sovereign rights of the people over their natural resources. For instance, UNGA Res 626(VII) (December 21, 1952) entitled Right to Exploit Natural Wealth and Resources; UNGA Res 1515 (XV), (15 December 1960) recommending respect for the sovereignty of every State to dispose of its wealth and natural resources; UNGA Res 1803 (XVII), (December 1962) declaration on ‘Permanent Sovereignty over Natural Resources’.


Emphasis on the rights of States to control their natural resources was further incorporated into the two Human Rights Conventions of 1966; Common Article 1(2) of the International Covenant on Civil and Political Rights and International Covenant on Economic, Social and Cultural Rights; the 1978 Vienna Convention on the Succession of States, Article 13 and regional instrument of the African Charter on Human and Peoples' Right (adopted 27 June1981, entered into force 21 October 1986) (1982), Article 21.

These instruments became the legal basis upon which developing States with rich natural resources began to renegotiate investments and concession agreements with foreign investors who hitherto had direct and unregulated access to the economic sectors of these States.


National economic policies of some developing States were tailored towards indigenous control through nationalisation of foreign assets and corporate investments. An eloquent example was the nationalisation of the Anglo-Iranian Oil Company by Iran in 1951. The policy of expropriating and transferring of foreign investments to indigenous people led to tension between developing countries and the foreign investors whose investments were expropriated without adequate compensation (Fiona, 1991). The tension and harsh confrontations between investors and host States resulted in the United Nations General Assembly Resolution 2158 of 1966, to serve as operational guidelines for corporate investment by streamlining the rights of the host States to their natural resources and the rights of foreign investors to secure their investments in line with the national laws of the host States. This became necessary as most developing States lacked the huge capital and technology required to exploit their natural resources for economic development optimally. It was a demonstration of effort by the UN to promote the economic development of post-colonial States, through mutual cooperation, transfer of technology and manpower development of the host States.


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