From the inception of the debates over the sovereignty over natural resources between the developed countries and the developing and newly independent states were characterised by the economic and political interests. As noted above, the developed countries were interested in accessing and sharing of the world natural resources in a bid to solve the raw material crisis brought by the effects of the World War II.80 The developing countries were asserting both political and economic rights. The political rights in a sense that states which were still under the colonial domination were struggling to get rid of the colonial whims and regain their independence The economic rights are correlative of the political rights in the sense that the ability to manage and control the endowed resources is grounded on the favourable political environment. It is emphatic argued that without the economic rights, the political rights are nugatory.81
The debates took different forms between interested parties. The developed countries used different forums to assert for the equitable sharing of world resources by all. At first, through making use of the provisions of the UN Charter, which succinctly argued member states to allow an access on equal terms of trade on raw materials of the world required for the economic prosperity.
Secondly, through making use of the provisions in the Articles of the Bretton Woods Agreements which encouraged international investments and the
80 Adede, A.O., Utilization of Shared Natural Resources: Towards a Code of Conduct, Environmental Policy and Law, 5 (1979), pp. 66 - 75.
81 See Tiewul Azadon, S., The Evolution of the Doctrine of Permanent Sovereignty of Natural Resources, (1978- 80), p.63, arguing that the political self determination does not amount to much unless supported by firm economic ties. See also Sohn Luis, B., and Buergenthal Thomas, International Protection of Human Rights, Indianapolis, the Bobbs-Merill Company (1973). see also Hyde James, N., Permanent Sovereignty over Natural Wealth and Resources, 50 American Journal of International Law (1956), p. 857.The delegates who were in favor of some language attempting to formulate a right of economic self-determination argued that, unless a state is the master of its own resources, it cannot exercise the right of political self-determination.
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development of productive forces by creating a conducive environment for equitable sharing of world resources.82
It was in the interest of the developed countries, particularly, those with strong economic ties with their respective former colonies to address the nationalisation storm which was taking place across the world. Most of the properties which were being nationalised belonged to the multinational companies which had heavily invested in the former colonies. For instance, the nationalisation of Mexican oil in 1938; the Anglo-Iranian Oil Company in the 1950s; the Bolivia Tin Mine in 1951; the United Fruit Company properties in Guatemala, the Suez Canal Company in Egypt in 1956 to mention just a few. Therefore, developed countries led by the former colonial powers sought to protect investments in their respective former colonies.83
The developing countries premised their assertion on various provisions of the UN Charter, which, among others, affirm the equal rights of nations large or small and the development of friendly relation among states based on respect of the fundamental principle of equal rights and self-determination of the people.84 The right to self-determination of the people intensified and strengthened the independence struggles for many non-self governed territories under the colonial domination. It was argued that the decolonisation movements provided a strong platform for the development of international law on natural resource governance. Arguably, the extraction of natural resources was one the main reasons of the colonialism, it was logical, thus during the decolonisation struggles it became vital enabling the people who had lived under the colonial exploitation
82 See article 1 of the Agreement of the International Bank for Reconstruction and Development, Dec. 27, 1945, 60 Stat. 1440, 2 U.N.T.S. 134, amended as 16 U.S.T. 1942, 606 U.N.T.S. 294 (Dec. 17, 1965) (establishing the International Bank for Reconstruction and Development the
"IBRD").
83 Schrijver N.J., Sovereignty over Natural Resources, (1997), p. 4.
84 See paragraph 2 and 4 of the United Nations Charter, 1945. see also Articles 1 (2), 2 (1), 55, 73 and 76 (b) of the United Nations Charter, 1945.
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to now gain their rights to benefit from the extraction of the resources found in their respective territories.85 The developing countries gave a special importance to the natural resources because of the lack of other competitive economic sectors like manufacturing. In order to promote the economic and social development in these countries, it was imperative to rely on the proceeds from the use of the endowed natural resources without which there were no options for improving the economic conditions for these states.
The newly independent states' concern was that most of the countries which were still under the whims of the colonial domination were deemed to not being able to benefit from their natural resources. Also, it was noted that even for the newly independent states, the contribution of the natural resources sector to their respective economies was negligible. 86 This was exacerbated by the fact that most of the natural resource agreements were inequitably executed between the foreign companies and the former colonial master. As such, terms and conditions were very much in favour of the companies. Therefore, the newly independent states were in favour of the revitalisation of natural resource agreements to make them more equitable.87
85 Gilbert Jėrėmie, The Right to Freely Dispose of Natural Resources: Utopian or Forgotten Right? 31 Netherlands Quarterly of Human Rights (2013) p.317. See also Antony Anghie, Imperialism, Sovereignty and the Making of International Law, (2007); see also: Gess, Karol, Permanent Sovereignty Over Natural Resources: An Analytical Review of the United Nations Declaration and its Genesis, 13 International & Comparative Law Quarterly, (1964), pp. 398 – 449.
86 Peter Chris Maina, Miles Apart but Walking the Same Path: The Right of the People to Control their Natural Wealth and Resources in Nigeria and Tanzania, (2007), pp. 9 - 10.
87 Schrijver, N.J., Sovereignty over Natural Resources, (1997), p.43, argues that the principle was advocated by the developing countries in an effort to secure, for those people still under colonial rule, the benefits arising out of exploitation of natural resources within their territories, and to provide newly independent states with legal shield against infringement of their economic sovereignty as a results of property rights or contractual rights claimed by other countries or foreign companies.
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2.3.1 The United Nations General Assembly Resolution (UNGA R.523), 1952 The resolution on the Integrated Economic Development and Commercial Agreements was a milestone through which the principle of PSNR was born. It affirms the right of developing countries to determine freely the use of their natural resources for their national economic interests. The resolution recommends to the members of the United Nations to facilitate through commercial agreements the movement of the machinery, equipment and raw material needed by the developing countries for their economic development and improve the standard of living.88 It also argues the developing countries make use of the natural resources available for the domestic utilisation and the international trade.89 However, the resolution puts a restriction in relation to the commercial agreements which contain the economic or political conditions which tend to jeopardise the sovereign rights of the developing countries, including the right to determine their plan for the economic development.90
As stated earlier in this part, the resolution is the first instrument at the international level to succinctly recognise the right of the developing countries to independently manage their natural resources. It also imposes correlative obligations to use the natural resources with the view of integrating them with the world economy.91 Therefore, the resolution is important in three main aspects, firstly, it addresses the long-fought battle by the developing countries on the recognition of their sovereignty over the endowed natural resources located in their respective territories. Secondly, it acknowledges the empowerment of the people as a tool towards enhancing the exploitation of the natural resource.
88 See article 1(b)(i) of the United Nations General Assembly Resolution 523 (VI)of 1952.
89 See article 1(b)(ii) of the United Nations General Assembly Resolution 523 (VI) of 1952.
90 Proviso under article 1(b)(ii) of the United Nations General Assembly Resolution 523 (VI) 1952.
91 Warden-Fernandez Janeth, The Permanent Sovereignty over Natural Resources: How it has been Accommodated within the Evolving Economy, The Centre for Energy, Petroleum and Mineral Law and Policy (CEPMLP) 2000, p. 3.
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Thirdly, it ignores the existing contractual rights and the interests of the multinational companies in favour of the resource-rich states.
2.3.2 The United Nations General Assembly Resolution (UNGA R.626), 1952 The UNGA Resolution 523 was, in the same year, supplemented by UNGA Resolution 626 on the Right to Exploit Freely Natural Wealth and Resources. It starts with a strong affirmation of three important aspects. Firstly, it encourages the developing countries and, in particular, the newly independent states to properly exploit and use their natural wealth and resources.92 Secondly, it affirms the right of people to freely use and exploit their natural resources as inherent in their sovereignty. Any political and/or economic conditions aimed at curtailing the enjoyment of the right violate the principles enshrined in the United Nations Charter.93 Thirdly, it was strongly argued that the economic development of underdeveloped countries is one of the requisites for the strengthening of the universal peace and security.94
The resolution recommends that states owning the natural resources to exercise their right to freely exploit the natural wealth and resources for the economic progression. It also argues states to pay due regards to the need for maintaining the flow of capital as a condition for security, mutual confidence, and the economic cooperation among nations.95 It further recommends that the investing states should refrain from any acts which will directly or indirectly interfere with
92 See the preamble of the United Nations General Assembly Resolution 626 (VII) of 1952 on the Right to Exploit Freely Natural Wealth and Resources.
93 See article 2 of the United Nations General Assembly Resolution 626 (VII) of 1952 on the Right to Exploit Freely Natural Wealth and Resources.
94 Preamble to the United Nations General Assembly Resolution 626 (VII) of 1952 on the Right to Exploit Freely Natural Wealth and Resources.
95 See article 1 of the United Nations General Assembly Resolution 626 (VII) of 1952 on the Right to Exploit Freely Natural Wealth and Resources.
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the sovereignty of a country over her natural resources.96 The resolution is significant in two important aspects; firstly, it succinctly affirms the sovereignty right of states over their natural resources and secondly, it encourages foreign investments which guaranteed the flow of capital with a spirit to enhancing the international cooperation among nations.
Notwithstanding, the resolution does not seem to, apart from providing the general statements of intent on the management of natural resources by underdeveloped countries, provide some sort of guidelines which the states have to adhere to in relation to intrastate natural resources governance. Equally, vesting the natural resources interests in both the people and the states will, undoubtedly, benefit states to the detriment of the people especially in a situation where there is an irresponsible government.
2.3.3 The United Nations General Assembly Resolution (UNGA Res. 1803), 1962
The most important milestone as far as sovereignty over natural resources is concerned was achieved in 1962 through the adoption of the United Nations General Assembly resolution 1803 (XVIII) on Permanent Sovereignty over Natural Resources. As stated in the preceding part of this chapter, the adoption fortified the principle of PSNR as enunciated by the earlier resolutions. In addition to the principles that were laid down by the earlier resolutions, the resolution sets the minimum principles through which states should adhere to when framing the investment agreements and/or enacting the domestic laws which govern their respective endowed natural resources.
Firstly, it reaffirms the sovereignty of states and the people over their endowed natural wealth and resources as unequivocally stated in the earlier resolutions.
Similar to the earlier resolutions, this was no different in respect of vesting
96 Article 1 of the United Nations General Assembly Resolution 626 (VII) of 1952 on the Right to Exploit Freely Natural Wealth and Resources.
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sovereignty over natural resources to both the states and people without drawing a line.97 The contemporary challenges regarding unequal distribution of natural resources benefits within confined state boundaries are partly occasioned by this anomaly.
Secondly, it recognises the right of the states and the people to freely determine the rules and conditions governing the exploration, exploitation, and disposition of the endowed natural resources within their borders.98 It is noted, apparently, from this principle that the duties to determine the rules governing exploration, exploitation, and disposition of natural resources within a state were left entirely to the discretion of the states without correlative obligations of sharing resources in furtherance of the international economic cooperation among nations.
Thirdly, it allows foreign capital investments, presumably, under the spirit of furtherance of the economic cooperation among nations. Notwithstanding, the rules, and conditions governing the admission of the foreign capital, the treatment of sharing of earnings, among others, were to be determined by the national legislation and the international law.99 Surprisingly, there were no set criteria for the application of laws, in particular, where there is a conflict between the host state and the extractive company. The effect of this principle is a conflict of the applicable laws between international and national laws. More so, where the host state prefers to invoke the application of her national laws, while the foreign company invokes international laws.100
97 See article 1 of the United Nations General Assembly Resolution 1803 (XVII) of 1962 on Permanent Sovereignty over Natural Resources.
98 See article 2 of the United Nations General Assembly Resolution 1803 (XVII) of 1962 on Permanent Sovereignty over Natural Resources.
99 See article 3 of the United Nations General Assembly Resolution 1803 (XVII) of 1962 on Permanent Sovereignty over Natural Resources.
100 See Free Zones of Upper Savoy case, Free Zones of Upper Savoy and the District of Gex Order of 19 August 1929 (Series A, No. 22) Sixth Annual Report of the Permanent Court of International Justice (15 June 1929—15 June 1930), Series E, No. 6, pp. 201–212, in which the
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Fourthly, the nationalisation of foreign properties can be undertaken where there is a compelling necessity of the host state and without discriminating the local and foreign investors or different treatment of the investors coming from different foreign states.101 In cases of compensation, the resolution provides for the appropriate compensation in accordance with the rules applicable in the nationalising states and international law.102 It is worth noting that the host state is under no obligations to pay the compensation according to the criteria enforced by the investor's home state laws. Irrespectively, the host states will remain bound to respect some minimum standards of fair treatment and non-discrimination under the customary international law.103
2.4 Fortifying the Principle of Permanent Sovereignty over Natural