How to use law to make foreign investment work for sustainable development | International Institute for Environment and Development

How to use law to make foreign investment work for sustainable development | International Institute for Environment and Development

IIED has today published a handbook that shows how government officials and civil society organisations in low and middle-income countries can use legal tools to ensure foreign investments contribute to sustainable development.

The book focuses on investments in agriculture and the extractive industries – mining, oil and gas.

These sectors attract much of the foreign investment in many low and middle-income countries. Increased investment could transform local economies by contributing public revenues and new livelihood opportunities. But the deals can also pile pressure on natural resources and spark conflict with local communities who depend on them.

"Public mobilisation against 'land grabbing' highlights that investment quality, not just quantity, matters a great deal, even in countries where investment is much needed," says Dr Lorenzo Cotula, the book's author.

"Legal tools can influence investment quality – from the tax regime to social and environmental safeguards, though to the inclusiveness of investment models and processes," says Cotula. "There is much that governments and civil society can do to use those tools to promote investments that respond to local aspirations, and to get a better deal from incoming investments."

The handbook explains what the laws that regulate foreign investment are, how they work, and how to use them most effectively.

 

A basket full of coal taken illegally from an open-cast mine near the village of Bokapahari, India where a community of coal scavengers live and work © G. M. B. Akash / Panos Pictures