The New Enclosures? Polanyi, international investment law and the global land rush

Abstract

Seven decades after its first publication, Karl Polanyi’s The Great Transformation remains one of the most insightful readings about the socioeconomic changes associated with the Industrial Revolution, and the ways in which law facilitated, or countered, moves towards the commodification of land at that time. As today’s global land rush brings competing land claims into contest, new transitions are occurring between more commodified and more ‘socially embedded’ conceptualisations of land. Using Polanyi’s framework, this article analyses the role of international law in these processes. International investment law construes land as a commercial asset, can facilitate access to land for foreign investors and imposes discipline on the exercise of regulatory powers in land matters. But shifts in the political economy that underpins international investment law and growing recourse to international human rights law are creating new opportunities for reflecting the non-commercial (cultural, social, political) relations within which land rights remain embedded in many societies. When contrasting conceptualisations of land collide, the relative strength of legal rights and enforcement mechanisms become particularly important. Ultimately, the legitimacy of international law to mediate between competing land claims will depend on the extent to which it can recognise the multiple values that society attaches to land.

Notes

1 L Alden Wily, ‘Looking back to see forward: the legal niceties of land theft in land rushes’, Journal of Peasant Studies, 39(2), 2012, pp 751–776; and KS Amanor, Land Governance in Africa: How Historical Context Has Shaped Key Contemporary Issues Relating to Policy on Land, Rome: International Land Coalition, 2012.

2 B White, SM Borras Jr, R Hall, I Scoones & W Wolford, ‘The new enclosures: critical perspectives on corporate land deals’, Journal of Peasant Studies, 39(3–4), 2012, pp 619–647; and B Okot, ‘Uganda: breaking the links between the land and the people’, blog, 11 March 2013, at http://www.iied.org/uganda-breaking-links-between-land-people.

3 T Sikor & C Lund, ‘Access and property: a question of power and authority’, Development and Change, 40(1), 2009, pp 1–22; and ‘Governing Global Land Deals: The Role of the State in the Rush for Land’, special issue of Development and Change, 44(2), 2013, particularly the introductory essay with the same title by W Wolford, SM Borras Jr, R Hall, I Scoones & B White, pp 189–210.

4 ‘Land Grabbing and Global Governance’, Globalizations (special issue), 10(1), 2013, esp ME Margulis, N McKeon & SM Borras Jr, ‘Land grabbing and global governance: critical perspectives’, pp 1–23 and SM Borras Jr, JC Franco & C Wang, ‘The challenge of global governance of land grabbing: changing international agricultural context and competing views and strategies’, pp 161–179.

5 W Anseeuw, L Alden Wily, L Cotula & M Taylor, Land Rights and the Rush for Land: Findings of the Global Commercial Pressures on Land Research Project, Rome: International Land Coalition, 2012, at http://www.landcoalition.org/cpl/CPL-synthesis-report; L Alden Wily, The Tragedy of Public Lands: The Fate of the Commons under Global Commercial Pressure, Rome: International Land Coalition, 2011, at http://www.landcoalition.org/publications/accelerate-legal-recognition-commons-group-owned-private-property-limit-involuntary-lan; and L Cotula, ‘“Land grabbing” in the shadow of the law: legal frameworks regulating the global land rush’, in R Rayfuse & N Weisfelt (eds), The Challenge of Food Security: International Policy and Regulatory Frameworks, Cheltenham: Edward Elgar, 2012, pp 206–228.

6 L Cotula, Legal Empowerment for Local Resource Control: Securing Local Resource Rights within Foreign Investment Projects in Africa, London: International Institute for Environment and Development (iied), 2007; E Polack, L Cotula & M Côte, Pathways to Accountability in Africa’s Land Rush: What Role for Legal Empowerment? London: iied, 2013; and J Grajales, ‘Speaking Law to Land Grabbing’: Land Contention and Legal Repertoire in Colombia, ldpi Working Paper No 17, 2013, at http://www.iss.nl/fileadmin/ASSETS/iss/Research_and_projects/Research_networks/LDPI/LDPI_WP_17.pdf.

7 See, respectively, A Wightman, The Poor Had No Lawyers: Who Owns Scotland (And How They Got It), Edinburgh: Birlinn, 2011; and Alden Wily, ‘Looking back to see forward’.

8 K Polanyi, The Great Transformation: The Political and Economic Origins of Our Time, Boston, MA: Beacon Press, 2001[1944]. All citations of Polanyi are from this second edition of the book.

9 A Ebner, ‘Transnational markets and the Polanyi problem’, in C Joerges & J Falke (eds), Karl Polanyi, Globalisation and the Potential of Law in Transnational Markets, Oxford/Portland: Hart Publishing, 2011, pp 19–40, p 33.

10 On the link between managing land access and establishing effective state control, see C Lund, ‘Fragmented sovereignty: land reform and dispossession in Laos’, Journal of Peasant Studies, 38(4), 2011, pp 885–905.

11 T Ferrando, ‘Legitimizing accumulation by dispossession: the state/capital nexus in land-related investment agreements’, 4 July 2013, at http://ssrn.com/abstract=2290022.

12 Polack et al, Pathways to Accountability in Africa’s Land Rush; and Grajales, ‘Speaking Law to Land Grabbing’.

13 Exceptions include A Perry-Kessaris, ‘Reading the story of law and embeddedness through a community lens: a Polanyi-meets-Cotterell economic sociology of law?’ Northern Ireland Legal Quarterly, 62(3) 2011, pp 401–13; and Joerges & Falke, Karl Polanyi, Globalisation and the Potential of Law in Transnational Markets.

14 J Stiglitz, ‘Foreword’, in Polanyi, The Great Transformation; F Block, ‘Karl Polanyi and the writing of “The Great Transformation”’, Theory and Society, 32(3), 2003, pp 275–306; K Polanyi-Levitt & K McRobbie (eds), Karl Polanyi in Vienna: The Contemporary Significance of The Great Transformation, Montreal: Black Rose Books, 2006; and R Sandbrook, ‘Polanyi and post-neoliberalism in the global South: dilemmas of re-embedding the economy’, New Political Economy, 16(4), 2011, pp 415–443.

15 Block, ‘Karl Polanyi and the writing of “The Great Transformation”’.

16 K Hart, ‘Karl Polanyi’s legacy’, Development and Change, 39(6), 2008, pp 1135–1143.

17 DN McCloskey, ‘Polanyi was right, and wrong’, Eastern Economic Journal, 23, 1997, pp 483–487.

18 DC North, ‘Markets and other allocation systems in history: the challenge of Karl Polanyi’, Journal of European Economic History 6, 1977, pp 703–716.

19 Ebner, ‘Transnational markets and the Polanyi problem’.

20 Alden Wily, The Tragedy of Public Lands.

21 T Li, ‘What is land? An anthropological pespective on the global land rush’, paper presented at the international conference on ‘Global Land Grabbing II’, Ithaca, NY, 17–19 October 2012, at http://www.cornell-landproject.org/papers/, p 12.

22 M Kenney-Lazar, ‘Plantation rubber, land grabbing and social-property transformation in southern Laos’, Journal of Peasant Studies, 39(3–4), 2012, pp 1017–1037.

23 See the evidence discussed in L Cotula, The Great African Land Grab? Agricultural Investments and the Global Food System, London: Zed Books, 2013; and L Cotula & C Oya, ‘Ground-testing claims about land deals in Africa: summary findings from a multi-country study’, Journal of Development Studies, forthcoming.

24 J-P Colin & P Woodhouse, ‘Interpreting land markets in Africa’, Africa, 80, 2010, pp 1–13.

25 PE Peters, ‘Inequality and social conflict over land in Africa’, Journal of Agrarian Change, 4(3), 2004, pp 269–314; and P Woodhouse, ‘New investment, old challenges: land deals and the water constraint in African agriculture’, Journal of Peasant Studies, 39(3–4), 2012, pp 777–794.

26 KS Amanor, ‘Global resource grabs, agribusiness concentration and the smallholder: two West African case studies’, Journal of Peasant Studies, 39(3–4), 2012, pp 731–749.

27 M Djiré with A Diawara & A Keita, Agricultural Investment in Mali: Context, Trends and Case Studies, London: iied, 2012.

28 K Deininger & D Byerlee with J Lindsay, A Norton, H Selod & M Stickler, Rising Global Interest in Farmland: Can it Yield Sustainable and Equitable Benefits? Washington, DC: World Bank, 2011, at http://econ.worldbank.org/external/default/main?pagePK=64165259&theSitePK=469382&piPK=64165421&menuPK=64166322&entityID=000334955_20110208033706.

29 Borras et al, ‘The challenge of global governance of land grabbing’.

30 The account of the early development of investment law draws on M Sornarajah, The International Law on Foreign Investment, Cambridge: Cambridge University Press, 2004; and A Newcombe & L Paradell, Law and Practice of Investment Treaties: Standards of Treatment, Austin, TX: Kluwer Law International, 2009.

31 R Kreide, ‘Re-embedding the market through law? The ambivalence of juridification in the international context’, in Joerges & Falke, Karl Polanyi, Globalisation and the Potential of Law in Transnational Markets, pp 41–64.

32 A Reinisch, ‘Legality of expropriations’, in Reinisch (ed), Standards of Investment Protection, Oxford: Oxford University Press, 2008, p 196.

33 See particularly General Assembly Resolution 1803(XVII) of 14 December 1962 on Permanent Sovereignty of States over Natural Resources; and the Charter of Economic Rights and Duties of States, General Assembly Resolution 3281(XXIV) of 12 December 1974.

34 AT Guzman, ‘Why ldcs sign treaties that hurt them: explaining the popularity of bilateral investment treaties’, Virginia Journal of International Law, 38, 1996–97, pp 639–688.

35 Figures for 1989 and 2002 are from unctad, World Investment Report 2003—fdi Policies for Development: National and International Perspectives, Geneva: United Nations Conference on Trade and Development, 2003. The figure for 2011 is from unctad, World Investment Report 2012: Towards a New Generation of Investment Policies, Geneva: United Nations Conference on Trade and Development, 2012.

36 JE Alvarez, ‘The return of the state’, Minnesota Journal of International Law, 20(2), 2011, pp 223–264.

37 SW Schill & M Jacob, ‘Trends in international investment agreements, 2010–2011: the increasing complexity of international investment law’, in KP Sauvant (ed), Yearbook on International Investment Law & Policy 2011–2012, Oxford: Oxford University Press, 2013, pp 141–179.

38 See, for example, C Olivet & P Eberhardt, Profiting from Injustice: How Law Firms, Arbitrators and Financiers are fuelling an Investment Arbitration Boom, Amsterdam: Transnational Institute, 2012, at http://www.tni.org/briefing/profiting-injustice.

39 A Ashayagachat, ‘Public hearing “required” before fta talks’, Bangkok Post, 8 August 2012, at http://www.bangkokpost.com/lite/topstories/306683/public-hearing-required-before-fta-talks.

40 Schill & Jacob, ‘Trends in international investment agreements’.

41 United States of America on Behalf of Marguerite de Joly de Sabla v The Republic of Panama, US–Pan Arb Comm’n, 29 June 1933, reported in American Journal of International Law, 28, 1934, p 602.

42 See, for example, Gustav F Hamester GmbH & Co KG v Republic of Ghana, Award, 18 June 2010, icsid Case No ARB/07/24, concerning a joint venture for the construction or upgrading of cocoa processing facilities in Ghana. See also the cases Cargill Inc v United Mexican States, Award, 18 September 2009, icsid case No ARB(AF)/05/02; Archer Daniels Midland Company and Tate & Lyle Ingredients Americas Inc v The United Mexican States, Award, 21 November 2007, icsid Case No ARB(AF)/04/05; and Ruby Roz Agricol LLP v The Republic of Kazakhstan, Award on Jurisdiction, 1 August 2013, Arbitration in accordance with the uncitral Arbitration Rules.

43 See, for example, Asian Agricultural Products Ltd v Democratic Socialist Republic of Sri Lanka, Award, 27 June 1990, icsid Case No ARB/87/3, (1991) 30 ILM 577; Tradex Hellas SA v Albania, Award, 29 April, 1999, icsid Case No ARB/94/2; and Bernardus Henricus Funnekotter and Others v Republic of Zimbabwe, Award, 22 April 2009, icsid Case No ARB/05/6.

44 Libyan American Oil Company (Liamco) v The Government of the Libyan Arab Republic, Award, 12 April 1977, 62 ILR 140, at 189.

45 Amoco International Finance Corp v Islamic Republic of Iran and Others, Partial Award, 14 July 1987, Iran–US Claims Tribunal, 15 Iran–US CTR 189, para 108.

46 Reinisch, ‘Legality of expropriations’. See German Interests in Polish Upper Silesia (Merits) (Germany v Poland), Judgment, 25 May 1926, (1926) PCIJ Ser A No 7, at 20–24; Amoco International Finance Corp v Iran, paras 113–117; and Compañia del Desarrollo de Santa Elena SA v The Republic of Costa Rica, Final Award, 17 February 2000, 39 ILM (2000) 1317, para 71.

47 Phillips Petroleum Co v Islamic Republic of Iran, Partial Award, Iran–US Claims Tribunal, 29 June 1989, 21 Iran–US CTR 79, paras 104–106.

48 Compañia del Desarrollo de Santa Elena SA v Costa Rica, paras 71–73.

49 For example, Cameroon–US bit 1986, Article III; and Nigeria–South Korea bit 1997, Article 5. On the emergence of the Hull formula as the increasingly dominant compensation standard under international law, see WM Reisman & RD Sloane, ‘Indirect expropriation and its valuation in the bit generation’, British Yearbook of International Law, 74, 2003, pp 115–150.

50 TW Wälde & B Sabahi, ‘Compensation, damages, and valuation’, in P Muchlinski, R Ortino & C Schreuer (eds), The Oxford Handbook of International Investment Law, Oxford: Oxford University Press, 2008, pp 1049–1124.

51 For example, Pine Valley Developments Ltd and Others v Ireland, Judgment, 29 November 1991, European Court of Human Rights, 14 EHRR 319.

52 See Large-Scale Land Acquisitions and Leases: A Set of Minimum Principles and Measures to Address the Human Rights Challenge, Addendum to the Report of the Special Rapporteur on the Right to Food, Olivier De Schutter, 28 December 2009, UN Doc A/HRC//13/33/Add. See also Chief Bernard Ominayak and the Lubicon Lake Band v Canada, UN Human Rights Committee, CCPR/C/38/D/167/1984, 26 March 1990, at http://www1.umn.edu/humanrts/undocs/session45/167-1984.htm.

53 http://viacampesina.net/downloads/PDF/EN-3.pdf and http://www.ohchr.org/EN/HRBodies/HRC/RuralAreas/Pages/WGRuralAreasIndex.aspx, respectively. See also M Edelman & J Carwill, ‘Peasants’ rights and the UN system: quixotic struggle? Or emancipatory idea whose time has come?’ Journal of Peasant Studies, 38(1), 2011, pp 81–108.

54 R Künnemann & S Monsalve Suárez, ‘International human rights and governing land grabbing: a view from global civil society’, Globalizations, 10(1), 2013, pp 123–139.

55 For example, Mayagna (Sumo) Awas Tingni Community v Nicaragua, Judgement, 31 August 2001, Inter-American Court of Human Rights, at http://www1.umn.edu/humanrts/iachr/AwasTingnicase.html; Saramaka People v Suriname, Judgement, 28 November 2007, Inter-American Court on Human Rights, at http://www.corteidh.or.cr/docs/casos/articulos/seriec_172_ing.pdf; Sawhoyamaxa Indigenous Community v Paraguay, Judgement, 29 March 2006, Inter-American Court on Human Rights, at http://www1.umn.edu/humanrts/cases/12-03.html; and Yakye Axa Indigenous Community v Paraguay, Judgment, 17 June 2005, Inter-American Court on Human Rights, at www.corteidh.or.cr/docs/casos/articulos/seriec_125_ing.pdf.

56 For example, Canada–Tanzania bit 2013 (not yet in force), Articles 30–31.

57 Glamis Gold Ltd v United States of America, Application for Leave to File a Non-Party Submission and Submission of the Quechan Indian Nation, 19 August 2005, at http://www.state.gov/documents/organization/52531.pdf.

58 Glamis Gold Ltd v United States of America, Award, 14 May 2009, at http://www.state.gov/documents/organization/125798.pdf.

59 Paras 83–84 of the award. On this point, see VS Vadi, ‘When cultures collide: foreign direct investment, natural resources, and indigenous heritage in international investment law’, Columbia Human Rights Law Review, 42, 2011, pp 797–889.

60 Vadi, ‘When cultures collide’, p 842.

61 Grand River Enterprises Six Nations, Ltd, et al, v United States of America, Award, 12 January 2011, at http://italaw.com/cases/documents/511, esp paras 66–71, 128–145. For a discussion of this case, see Vadi, ‘When cultures collide’; and IA Laird, B Sabahi, FG Sourgens & NJ Birch, ‘International investment law and arbitration: 2011 in review’, in Sauvant (ed), Yearbook on International Investment Law & Policy, pp 41–140.

62 See, for example, Rwanda–US bit 2008, Articles 3-4; Japan–Laos bit 2008, Article 2; and Benin–Canada bit 2013 (not yet in force), Articles 5–6.

63 For example Annex II of Benin–Canada bit 2013; and Annex II(2) of Japan–Laos BIT 2008.

64 For a case study, see AL Luers, RL Naylor & PA Matson, ‘A case study of land reform and coastal land transformation in southern Sonora, Mexico’, Land Use Policy, 23, 2006, pp 436–447.

65 LE Peterson, ‘First hearing in Philip Morris v Australia arbitration is pushed into 2014, as New Zealand reveals it is awaiting outcome of Australian cases’, International Arbitration Reporter, 28 February 2013, at http://www.iareporter.com/articles/20130228_2.

66 unctad, World Investment Report 2012, p 147.

67 Técnicas Medioambientales Tecmed, SA v United Mexican States, Award, 23 May 2003, icsid Case No ARB(AF)/00/2, 43 ILM (2004) 133, para 154.

68 Ibid.

69 CMS Gas Transmission Company v The Argentine Republic, Award, icsid Case No ARB/01/8, 12 May 2005, 44 ILM 1205, para 281; and LG&E Energy Corp, LG&E Capital Corp and LG&E International Inc v Argentine Republic, Decision on Liability, 3 October 2006, icsid Case No ARB/02/1, 46 ILM 36 (2007), paras 132–139.

70 High Court, Judgment of 6 March 2008. Reproduced as annex in SL Harring & W Odendaal, Kessl: A New Jurisprudence for Land Reform in Namibia? Windhoek: Legal Assistance Centre and Namibian Economic Policy Research Unit, 2008, at http://www.lac.org.na/projects/lead/Pdf/kessl.pdf, which also provides a detailed commentary to the judgment.

71 LE Peterson & R Garland, Bilateral Investment Treaties and Land Reform in Southern Africa, Montreal: Rights & Democracy, 2010.

72 Waste Management, Inc (US) v United Mexican States, Award, 30 April 2004, icsid Case No ARB(AF)/00/3, para 98.

73 Railroad Development Corporation (rdc) v Republic of Guatemala, Award, 29 June 2012, icsid Case No ARB/07/23.

74 Schill & Jacob, ‘Trends in international investment agreements’.

75 Partial Award, 17 March 2006, Permanent Court of Arbitration, at http://ita.law.uvic.ca/documents/Saluka-PartialawardFinal.pdf,%20para%20305.

76 El Paso Energy International Company v The Argentine Republic, Award, 31 October 2011, icsid Case No ARB/03/15; and Merrill & Ring Forestry LP v The Government of Canada, Award, 31 March 2010, at http://italaw.com/cases/documents/1266. In this case, the tribunal defined fair and equitable treatment as ‘protect[ing] against all such acts or behavior that might infringe a sense of fairness, equity and reasonableness’ (para 210).

77 L Cotula, Human Rights, Natural Resource and Investment Law in a Globalised World: Shades of Grey in the Shadow of the Law, London: Routledge, 2012.

78 Sandbrook, ‘Polanyi and post-neoliberalism in the global South’, p 417.

79 JG Ruggie, ‘International regimes, transactions, and change: embedded liberalism in the postwar economic order’, International Organization, 36(2), 1982, pp 379–415; and Sandbrook, ‘Polanyi and post-neoliberalism in the global South’.

Additional information

Notes on contributors

Lorenzo Cotula

Lorenzo Cotula is Principal Researcher in Law and Sustainable Development, International Institute for Environment and Development, 80–86 Gray’s Inn Road, London WC1X 8NH, UK