Water property rights in investor‐state contracts on extractive activities, affects water governance: An empirical assessment of 80 contracts in Africa and Asia

Abstract

In view of increasing globalization, the ongoing promotion of foreign direct investment and the lack of comparative literature on how water property rights are changing in the global South, this article asks: How have property rights in water evolved through investor-State contracts on mineral, petroleum and land issues in Africa and Asia? We analyse 80 publicly available contracts — 22 minerals, 40 petroleum and 18 land — of 34 African and 19 Asian countries. We find that: (i) in addition to a State's water law, water allocation is also implicitly governed by contracts and international investment treaties; (ii) States de facto privatize water by allocating quasi-property rights through the granting of contracts to foreign international investors; (iii) such waters exploited by virtue of contracts reduce the ability of States to regulate water during the term of the contract especially as investors' water use is protected by bilateral investment treaties and potential compensation claims; and (iv) the need of the State to increasingly adaptively govern water as the impacts of climate change on water become more noticeable will be challenged by the long-term quasi property rights granted by States to investors in such contracts.