Investing in Land for Water: The converging legal regimes

This policy brief examines the legal complexities and risks associated with foreign investment in African farmland, specifically focusing on the often-overlooked issue of water rights. It highlights a systemic imbalance where foreign investors' statutory rights frequently override the customary water rights of local communities, exacerbated by poor state enforcement and restrictive investment contracts.

• Foreign investment in agriculture is heavily concentrated around major African river basins, as water access is the primary driver of farmland attractiveness. However, the scale of water required for these investments threatens regional stability; some estimates suggest that fully irrigating all farmland leased to foreign investors would be "hydrological suicide," particularly in the Nile River Basin.
• There is a significant legal disparity between foreign investors and local populations. While local communities typically rely on unwritten customary law, foreign investors obtain formal statutory rights through contracts. In most domestic legal systems, these written statutory rights prevail over customary rights in the event of a conflict.
• State capacity to regulate water use is severely lacking. Even in countries with established water acts, enforcement is often limited to the project approval stage, with little to no subsequent monitoring of water extraction limits or contamination. Consequently, water use by foreign investors is described as being "virtually unregulated."
• Investment contracts and treaties often restrict the ability of host states to manage water sustainably. Stabilization clauses in contracts can freeze domestic laws at the time of signing, while international investment treaty standards—such as fair and equitable treatment and prohibitions against expropriation—may limit a state's ability to reallocate water during shortages.
• Agricultural investments frequently fail to improve local food security because the resulting crop production is typically destined for export to the investor's home state or high-end urban consumers, rather than for local or vulnerable rural populations.
• The document recommends that host states integrate international freshwater, environmental, and human rights law into their domestic frameworks and investment contracts. Specifically, contracts should include explicit water volumes, fees, and safeguard clauses that ensure the state can reallocate water for the public good without violating investment treaties.

APA

Mbengue, M. M., Waltman, S., & Turley, L. (2016). Investing in Land for Water: The converging legal regimes. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/investing-land-water-converging-legal-regimes.pdf

Chicago

Mbengue, Makane Moïse, Susanna Waltman, and Laura Turley. Investing in Land for Water: The converging legal regimes. International Institute for Sustainable Development, 2016. https://www.iisd.org/system/files/publications/investing-land-water-converging-legal-regimes.pdf.

Wikipedia

{{cite report |last1=Mbengue |first1=Makane Moïse |last2=Waltman |first2=Susanna |last3=Turley |first3=Laura |title=Investing in Land for Water: The converging legal regimes |publisher=International Institute for Sustainable Development |date=July 2016 |url=https://www.iisd.org/system/files/publications/investing-land-water-converging-legal-regimes.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mbengue2016investing, author = {Mbengue, Makane Moïse and Waltman, Susanna and Turley, Laura}, title = {{Investing in Land for Water: The converging legal regimes}}, institution = {International Institute for Sustainable Development}, year = {2016}, month = jul, url = {https://www.iisd.org/system/files/publications/investing-land-water-converging-legal-regimes.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }