The strategic importance of international investments in the field of mining and international law

• Author: Cristina Elena Popa Tache
• Pages: 15-30

The strategic importance of international investments in the field of

mining and international law1

PhD. Cristina Elena POPA TACHE2

“Minerals and metals are essen tial for

modern living. Access to and afford ability of

mineral raw materials are crucial for the sound

and sustainable functioning of the world

economy and modern societies 3.”

Abstract

Worldwide, the entrance re strictions for foreign investment were eliminated or

restricted in a wide range of industries, especially mining (among other fields such a s

aviation, financial services, real estate). Foreign investors still remain reluctant to

placement of investments in developing countries, shall be required also to seek host

countries with a certain degree of stability in the existence of international treaties on

investment In conclusion, it is emphasized that the investment environment must

substantiate its order and hierarchy on a set of regulations with a mandatory character, as

the soft law regulations, such as conduct codes of the transnational companies, the project

of articles regarding the responsibility of states of the International Law Committee, the

arbitrage practices (that does not admit precedents) or o ther acts without mandatory force

have proven insufficient. An especially important role is played by the common effort of

experts to expose all the forceful p ositions, as well as the vulnerabilities of all the actors

involved in international in vestments, so that, through a full and objective analysis of these

aspects, firm regulatory solutions may be extracted.

Keywords: foreign investment, mining, international treaties, national security .

JEL Classification: K11, K23, K33

1 This paper is written during the sustainability stage of th e project entitled „Horizon 2020 - Doctoral

and Postdoctoral Studies: Promoting the National Interest through Excellence, Competitiveness and

Responsibility in the Field of Romanian Fundamental and Applied Scientific Research”, contract

number POSDRU/159/1.5/S/140106. This project is co-financed by the European Social Fund

through the Sectoral Operational Programme for Human Resources Development 2007-2013.

Investing in people!

2 Cristina Elena Popa Tache - Doctor in Law and an associated scientific researcher with the Judicial

Research In stitute of the Romanian Academy, associated with Chartered Institute of Arbitrators,

arbiter and mediator with Vienna International Arbitral Centre and member of Arbitral Women;

email: cristina@adrlegal.ro

3 Támas Hamor, Statement on behalf of the European Union and its 27 Member States, Intergovernmental

preparatory meeting of the 19th Commission on Sustainable Development, Mining Session, CSD 19 IPM

Draft statement on Mining (New York, 2 March 2011). The document is available on the official Internet

page: http://www.un.org/esa/dsd/resources/res_pdfs/csd-19-ipm/2march/PM/eu.pdf, accessed on

04.04.2017.

16 Volume 7, Issue 1, June 2017 Juridical Tribune

1. Introductory considerations

International investments are a pro-eminent topic on nowadays political,

economic, financial, social and cultural agendas. International transactions in the

field of foreign investments have been, are and will continue to be under

expansion, especially in the last decades, during which period foreign investments

have diversified, while their frequency has intensified as a side effect of

globalization. If in 1996 there still were voices that claimed both that “there is no

doubt that direct foreign investments have joined international commerce as a main

engine of globalization”, as well as that a “a growing symbiosis and an integrated

relationship between commerce and investments4” has been observed, today it is

certain that any analysis of the foreign investments is not complete until it is made

through the lens of international public law. Jacques Percebois5 has characterized

mondialization (a term preferred to that of globalization) as a transnational decision

network, a concept mirroring the investment action. According to UNCTAD,

globalization is a product of deregulation6. Continuous unity for economic

efficiency raises new issues regarding deregulation and investment promotion.

“Globalization is simultaneously a cause and a result of the movement to conclude

international treaties regarding investments between nations7”. Mining

investments, although they occupy a reduced percentage on a global level, are still

classified at the top of special importance investments due especially to their side

effects on the global economy, on the environment, on human rights and, last but

not least, on international law. However, the boom of foreign investments in

mining projects over the last 2 decades, is only a herald of the global competition

for access to mineral resources in the decades to come8.

In the transactional theory and practice, it has been established that direct

foreign investments and portfolio foreign i nvestments are governed by the legal

regimen of international investments, naturally, without going into debates

regarding the distinction between the two types of investments, their relevant

characteristics and the marking of the “grey area”. Among these there exists a large

variety of other contractual relations, especially long term mining claim

agreements that are legally considered as “investments” to the extent that a

contractual party/partner invests capital and important financial resources i n such a

4 See the presentation of Renato Ruggiero – general manager, in 1996, of World Trade Organization

(WTO) – during the UNCTAD seminar regarding d irect foreign investment and the multilateral

commerce system, which took place in Geneva on February 12, 1996.

5 Jacques Percebois currently is the manager of the Economics and Energy Law Research Centre

(CBEDEN), Montpelier I University, France.

6 In the World Investment Report for 2016, UNCTAD focuses on the tendencies of direct foreign

investments (ISD) on a global, regional and national level and on the measures that are being

implemented to improve its contribution to the development.

7 Jeswald W. Salacuse in The Law of Investment Treaties, Second edition 2015, Oxford Intern ational

Law Library, p.33.

8 Richard W. Roeder, Foreign Mining Investment Law. The Cases of Australia, South Africa and

Colombia, Springer International Publishing, Switzerland, 2016, p.1.