Description

Foreign direct investment in the natural resource industries is fostered through the signing of concession agreements between the host State and the investor. However, such concessions are also susceptible to alteration by the host State, requiring the use of stabilization clauses which constitute an undertaking on the part of the host State, that they will not take any administrative or legislative action that would adversely affect the rights of the investor. This book argues that the current position necessitates some form of contractual flexibility while still offering protection of the legitimate expectations of the investor and outlines the need for renegotiation clauses in the concession agreements. Using Zambia as a case study, it shows the limitations of the efficient breach theory to emphasise the need for contractual flexibility.