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Evolving Standards on Stabilization
The document examines the evolution of stabilization clauses in the mining sector, arguing that traditional 'freezing' and 'economic equilibrium' clauses often constrain a state's right to regulate. It promotes the 2020 OECD Guiding Principles, which delegitimize non-fiscal stabilization and advocate for a targeted, commercially justified approach to fiscal stabilization. The guide introduces the concept of 'revenue certainty' for governments and provides specific model clauses for laws and contracts to ensure that investors' needs for predictability are balanced against the state's public interest objectives and the need to prevent tax base erosion.
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Document type: Guide