Bilateral Investment Treaties, Mining and National Champions: Making it work

The document examines the tension between the Africa Mining Vision's goals of sustainable development and the legal constraints imposed by Bilateral Investment Treaties (BITs). It evaluates ownership-related policies and performance requirements, concluding that while these tools can be effective for creating national champions and local linkages, they often conflict with treaty obligations regarding national treatment and expropriation.

• The Africa Mining Vision (2009) represents a shift from 1980s liberalization toward a paradigm emphasizing equity, transparency, and a more significant role for the state to ensure mineral wealth supports broad-based sustainable growth.
• Ownership and equity-related tools for fostering national champions include free carry obligations, joint venture requirements, the promotion of state-owned enterprises (SOEs), and expropriation, though their effectiveness varies.
• Performance requirements, such as local content mandates and R&D obligations, can successfully pursue development objectives if well-crafted and integrated into a broader strategy, rebutting assumptions that they necessarily drive away investment.
• International investment treaties often restrict policy space through substantive provisions like national treatment, most-favoured nation (MFN) treatment, and fair and equitable treatment (FET), which can be used by investors to challenge state development policies.
• Investor-State Dispute Settlement (ISDS) allows investors to bypass domestic courts for international arbitration, creating a risk of 'regulatory chill' where states avoid public welfare regulations to prevent costly claims.
• Pre-establishment restrictions on foreign ownership are generally permissible under international law unless a state has signed a treaty granting 'market access' or 'pre-establishment' rights, which are increasingly pushed by the US, Canada, and the EU.
• Post-establishment changes to ownership or the imposition of new performance requirements are legally riskier, as they may be classified as direct or indirect expropriation, requiring the state to provide compensation.
• There is a significant conflict between development practices and investment law regarding local content requirements, which are often prohibited by the WTO's Agreement on Trade-Related Investment Measures (TRIMs) and similar BIT provisions.
• To preserve policy space, states can use drafting strategies such as excluding the extractive sector from certain treaty obligations, using 'positive lists' for market access, or removing performance requirement disputes from the scope of ISDS.

APA

Cosbey, A., Mann, H., & Cunningham, M. (2014). Bilateral Investment Treaties, Mining and National Champions: Making it work. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/bilateral_investment_treaties_mining_national_uneca.pdf

Chicago

Cosbey, Aaron, Howard Mann, and Maxine Cunningham. Bilateral Investment Treaties, Mining and National Champions: Making it work. International Institute for Sustainable Development, 2014. https://www.iisd.org/system/files/publications/bilateral_investment_treaties_mining_national_uneca.pdf.

Wikipedia

{{cite report |last1=Cosbey |first1=Aaron |last2=Mann |first2=Howard |last3=Cunningham |first3=Maxine |title=Bilateral Investment Treaties, Mining and National Champions: Making it work |publisher=International Institute for Sustainable Development |date=June 2014 |url=https://www.iisd.org/system/files/publications/bilateral_investment_treaties_mining_national_uneca.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cosbey2014bilateral, author = {Cosbey, Aaron and Mann, Howard and Cunningham, Maxine}, title = {{Bilateral Investment Treaties, Mining and National Champions: Making it work}}, institution = {International Institute for Sustainable Development}, year = {2014}, month = jun, url = {https://www.iisd.org/system/files/publications/bilateral_investment_treaties_mining_national_uneca.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }