Paper long abstract:

Natural resources (e.g. land, water, forests, minerals and oil/gas) and natural resource-related infrastructure (e.g. dams and pipelines) constitute important sectors for foreign investment in the developing world. Developing countries endowed with valuable natural resources may lack capital and technology to exploit them, while investors with the necessary capital and technology look for investment opportunities in countries rich in natural resources. In Africa, foreign investment flows are heavily concentrated in countries with important petroleum, mineral and other natural resources (UNCTAD, 2005).

However, if appropriate conditions are not in place, natural resource-based investment projects may undermine the ability of local resource users to access the resources on which they depend for their survival. This may take the form of expropriation of local land rights without adequate compensation. Also, even in the absence of expropriation, investors may be granted exploitation rights that severely affect the ability of local groups to use their resources. And, in many cases, natural resource investment projects have led to pollution of water and other resources essential to local groups. These problems are compounded by the fact that local users commonly gain access to resources through customary norms, and therefore lack registered titles; and by the fact that many developing countries lack legislative measures as well as institutional and financial capacity to safeguard the property rights of local resource users.

This paper will discuss these issues, focusing on two case studies from West Africa.