The resource curse: a legal perspective.

Author:Vinuales, Jorge E.
Position:Report
 
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This article analyzes the different dimensions of the so-called resource curse hypothesis from the perspective of international and domestic law. The analysis is structured as a commentary of the views of the UK-based philosopher Leif Wenar and the Swiss philosopher Peter Schaber on this issue. The article concludes that, under current legal arrangements, states remain the main guarantors of the public good of the people living under their sovereignty. Thus, for better or worse as long as, from a political or an ethical standpoint, peoples are sovereign, they will also continue to assume the main responsibility for their own development even when their house is not in order. KEYWORDS: resource curse, resource ownership, international law, domestic law, Ogoni, Equatorial Guinea.

The superfluous of the rich should serve for the necessity of the poor; yet, quite to the contrary, the necessity of the poor serves for the superfluous of the rich.--Jean Domat

IN TWO RECENT CONTRIBUTIONS TO THE PHILOSOPHY LITERATURE, ONE BY THE UK-based philosopher Leif Wenar(1) and the other by the Swiss philosopher Peter Schaber, (2) these authors engage in an interesting discussion over who is the proper owner of natural resources as well as on the ensuing consequences from an ethical perspective.

Wenar's argument is, in essence, that natural resources belong to peoples and, as a result, cannot be sold by authoritarian governments to foreign acquirers without proper authorization from the true owners. Moreover, according to Wenar, we would all be responsible for maintaining this situation, to the extent that we buy goods made of such "stolen" resources. Schaber objects to Wenar's argument on the grounds that it is not the authorization to sell the resources that makes such a hypothesis unethical, but rather the fact that authoritarian rulers use the proceeds of the sales for their own private benefit. As for Wenar's second argument, Schaber argues that multinational corporations' purchases and subsequent transfers of money to dictatorial rulers should only be seen as a basis for responsibility when there is a relation of complicity. According to Schaber, enabling a situation is not the same as contributing to it. For instance, producers and consumers of knives cannot, absent specific circumstances, be held responsible for the potential stabbing of people with those knives. Furthermore, Schaber notes that to stop buying natural resources from authoritarian regimes would likely not help the affected people.

From the perspective of a lawyer, the debate between Wenar and Schaber provides an interesting set of propositions against which to assess what the international and domestic legal architecture has to offer to address the problem often referred to as the resource curse; that is, that countries where there is an abundance of natural resources tend to do worse in terms of human and economic development than countries with fewer natural resources. From a legal standpoint, the issues underlying the debate between Wenar and Schaber can be pinned down to two basic legal questions; namely, (1) who owns natural resources, and (2) what legal consequences are attached to spoliation or misuse. After some initial clarifications, the following discussion seeks to address the main aspects of these two questions from the perspective of international and domestic law, before providing a concise assessment of the current state of the law on these issues. Because the article is not primarily intended for an audience of international lawyers, I have endeavored to discuss the relevant legal concepts and mechanisms without going into unnecessary technical details.

Framing the Discussion

Before undertaking the analysis, I would like to make three clarifications that will be useful for framing the discussion.

First, there is an important difference between the philosophical analyses provided by Wenar and Schaber and the legal analysis provided here, and that is the need for a lawyer to take into account the existing legal framework applicable to a given issue, whether one agrees or not with the current state of the law. My analysis will thus focus on existing law rather than on potential alternatives still to be elaborated or adopted. This is relevant for the discussion of the theses advanced by Wenar and Schaber because the two authors make reference to international law as part of their analyses.

Second, the philosophical concept of ownership implicit in the aforementioned articles of Wenar and Schaber does not correspond to a single legal concept, either in international law or in domestic legal systems, but can instead be found embedded in many legal concepts. For instance, ownership may be seen as a component of sovereignty to the extent that sovereignty entitles a state to exercise powers over its territory, which are similar in many respects to those arising from ownership. However, such powers often overlap with domestic legal translations of ownership, such as real property or other rights over things.

Third, the differences among the legal concepts capable of translating the philosophical concept of ownership are sometimes substantial. Such differences exist not only between international law and domestic legal systems, but also between different domestic legal systems. For instance, the structure of property rights in countries with legal systems based on the common-law tradition is significantly different from that in countries with legal systems based on the continental tradition. An important consequence of these differences is that it would be of limited interest (aside from being beyond the scope of this article) to attempt here a country-by-country analysis of the laws governing real property or other related subjects. I will focus instead on the general legal concepts underlying domestic legal systems as well as on the relevant concepts and rules of international law.

Ownership of Natural Resources in International Law

Sovereignty and Ownership

Ownership of natural resources in international law rests on the legal concept of sovereignty. (3) International lawyers have frequently characterized this concept by reference to an early dispute between the United States and the Netherlands over the Island of Palmas/Miangas, where the single arbitrator, the Swiss Max Huber, famously observed that "sovereignty in the relations between States signifies independence. Independence in regard to a portion of the globe is the right to exercise therein, to the exclusion of any other State, the functions of a State." (4) Two intertwined dimensions can be identified in this passage. The first dimension (external) is the independence of a state with respect to all other states with regard to the exercise of governmental powers over its territory. The second dimension (internal) focuses on the inward manifestations of independence; namely, the right to exercise within its territory, to the exclusion of any other state or group, all the functions of a state. Thus, sovereignty is the legal basis for the exercise by a state of full and exclusive rights over its territory, in a manner analogous to an individual's exercise of property rights over his or her land.

It is necessary, however, to add a number of clarifications to this basic idea. The first is that the analogy between sovereignty and property has certain limitations. (5) In particular, resources subject to the sovereignty of a state (imperium) may at the same time be subject to public or private property rights (dominium). In fact, domestic property rights granted by law can be considered as an inward manifestation of the sovereignty of the state. The second clarification is that the state's exclusivity operates with respect both to other states (as otherwise, the condition of "independence" would not be met(6) and to other groups operating in the state's territory, but claiming not to be subject to the state's authority. The international legal regime applicable to the relations between the acts of a state and those of such other groups is a complex one. Different rules apply depending inter alia on whether such other group is a mere insurgent or has been recognized as a national liberation movement representing a people entitled to self-determination. (7) The third clarification is simply that the question of what specific functions belong to a state is more of a political than of a legal nature because, in principle, states are entitled under international law to exercise all governmental functions. A state may of course decide to delegate such functions to private entities, but such delegation must be seen, legally, as an exercise of governmental powers. (8)

For the purpose of this analysis, the preceding remarks mean that the natural resources located in a state's territory belong to the state. This conclusion was reaffirmed with reference to natural resources in the context of the decolonization process. In a landmark resolution adopted at its seventeenth session in 1962, the UN General Assembly asserted the principle of permanent sovereignty (of peoples and nations) over (their) natural resources. (9) The customary nature of this principle was recently confirmed by the International Court of Justice (ICJ) in the case opposing the Democratic Republic of Congo to Uganda. (10) Importantly, this resolution expressly refers to the rights of peoples over their natural resources, even before they exercise their right to self-determination (RSD) and become a state. This idea had already gained some acceptance in the context of the drafting of the International Covenant on Civil and Political Rights (ICCPR) and the International Covenant on Economic, Social and Cultural Rights (ICESCR), as a component of the RSD. (11)

As I discuss in the following section, this nuance is important to assess the arguments put forward by Wenar and Schaber. If we go back to the question of who owns...

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