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Legislative and Regulatory Frameworks: Reform and Revise

Strong legal and regulatory frameworks improve transparency, accountability, contract negotiations, and the implementation of investment projects.

About

A comprehensive and clearly drafted legal and regulatory framework improves the investment climate for investors, promotes transparency and government accountability, facilitates better contract negotiations, and makes it easier to implement and regulate investment projects.

Governments should formulate or revise their laws according to their democratic processes, as a part of which relevant stakeholders, including communities which stand to be affected, should be consulted. A government’s national policies and policy objectives, as well as international and regional best practices should also be taken into account in the formulation or revision of such laws. Some governance frameworks and initiatives are available to assist with this process. 

If a public-private partnership (PPP) in an investment is envisaged, the PPP legal and regulatory framework may also need to be revised or updated. There may also be scope for leveraging investments in natural resource-related infrastructure (such as power, ports, rail, water, ICT) to address national infrastructure developments goals, which should be considered. For more information, see the Columbia Center on Sustainable Investment‘s work on Leveraging Mining-Related Infrastructure Investments for Development.

In relation to any investment, comprehensive environmental, social and human rights protections should also be included in the legal framework. Laws and regulations setting out such protections should reflect international and regional standards and best practices. They also need to address such issues as what data should be collected for impact assessments and management plans, which government agency or department should review and approve them, the process for revisions and corrections, and what the penalties are for non-compliance.

Setting out such provisions in the laws governing contracts rather than in the contracts themselves could also limit their (re)negotiation at the contract stage, though some investors may seek to introduce stabilization clauses in the contracts that circumvent some of those standards.

The implementation of model contracts based on best practices and public consultations could further minimize the discretion in the contract negotiating process, with guidance as to which provisions may be amended in the course of negotiations and which may not.

Finally, the implementation of bilateral investment treaties may need to be considered. Where local content legislation is or has been implemented, governments need to ensure that the provisions in the investment treaties and local content requirements do not conflict.

Key Tools At
This Stage

Natural Resource Charter

The Natural Resource Charter is a set of principles to guide governments and societies’ use of natural resources so these economic opportunities result in maximum and sustained returns for a country’s citizens. The Charter outlines tools and policy options designed to avoid the mismanagement of these natural diminishing riches and work towards ensuring their ongoing benefits.

IGF's Mining Policy Framework

The Mining Policy Framework (MPF) is a compendium of best practices in mining law and governance. It was developed by governments to provide a framework to guide governments to come up with a mineral regime for sustainable development. It is available in English, French, Spanish, and Russian.

Legal and Regulatory Issues Concerning Public-Private Partnerships

The Legal Framework Assessment provides a summary of key areas of a host country’s existing laws that will need to be reviewed when a government embarks on an infrastructure project, particularly one involving the private sector.

In addition, checklists, model bid documents, examples of legislative provisions relevant to infrastructure PPP projects, and financing mechanisms for PPP projects are provided.

Available in English, French, and Spanish.

African Mining Legislation Atlas

AMLA is a free online one-stop resource for Africa’s mining legal framework (mining codes, regulations and related legislation) with interactive features to provide comparative data. The AMLA guiding template is an annotated document that outlines a menu of legislative solutions to assist countries in the preparation or revision of their mining laws.

FAOLEX

FAOLEX is a comprehensive and up-to-date legislative and policy database for food, agriculture, and renewable natural resources developed by the Food and Agriculture Organization of the UN. It is one of the world’s largest online repositories of national laws, regulations and policies on food, agriculture and natural resources management.