2018 Reports

Community-Investor Negotiation Guide 2: Negotiating Contracts with Investors

Szoke-Burke, Sam; Knight, Rachael; Cordes, Kaitlin Y.; Mebratu-Tsegaye, Tehtena; Brinkhurst, Marena

Deciding whether or not to allow an investor to use community lands and natural resources is one of the most important decisions a community can make. If an investment project is carried out in a respectful and inclusive way, it may help community members to achieve their development goals, which may include creating jobs and local economic opportunities. But investments come with risks. Investment projects may make the land that community members need for farming and other livelihood activities unavailable for some time. They may pollute local rivers, lakes, air, and soils, or block access to sacred areas or water sources. Investment projects may even violate community members’ human rights, or result in communities completely losing their lands.

Given these challenges, CCSI partnered with Namati, a legal empowerment organization, to produce two guides aimed at supporting communities and their advisors in their interactions with land-based investors.

This Guide 2 provides practical guidance on the issues to consider when a community has decided to negotiate a contract with an investor. Using example clauses, and guidance boxes for community discussion and seeking legal advice, it describes all of the various sections and clauses that should be in a contract, advises what protective language to try to include in the contract to make it enforceable, and warns against types of problematic contractual language that should be avoided.