Global Governance of Oil and Gas Resources in the International Legal Perspective. Joanna Osiejewicz

Energy Charter Treaty recognizes the sovereign rights of states-parties to energy resources, in particular the right to determine in which territories and to what extent to seek and develop energy resources, and to participate in such exploration and exploitation, including through direct participation of government or state-owned enterprises.¹⁵⁷

In Fisheries jurisdiction (1974), the ICJ recognized that on the basis of international customary law emerging from the Conferences of the Law of the Sea of 1958 and 1960, the coastal state has the right to establish a two-hundred-mile exclusive fishery zone and preferential fishing rights in adjacent waters. The ICJ confirmed that the right to free exploration and exploitation of natural resources is one of the fundamental rights resulting from the principle of permanent sovereignty.¹⁵⁸

3.1.3 The right to regain effective control and compensation

The UN Declaration on the Establishment of a New International Economic Order¹⁵⁹ provides that this order should be based, inter alia, on the respect of the principle that all states, territories and nations under foreign occupation, foreign and colonial domination, or apartheid have the right to restitution and full compensation for exploitation and impoverishment, as well as damage to natural resources and other resources of these countries, territories, and nations.¹⁶⁰ This declaration constitutes one of the attempts to assign the right to permanent sovereignty over wealth and natural resources to the nations of occupied non-member states and to ensure that even those who cannot or can no longer exercise their right to sovereignty over these resources should still have the right to make claims about ownership over them.

Security Council Resolution No. 687 (1991), which introduces a comprehensive peace package imposed on Iraq after the Gulf War in 1990–1991, confirms that Iraq is responsible under international law for direct loss, damage, including environmental damage and depletion of natural resources, as a result of the unlawful invasion of Iraq and the occupation of Kuwait.¹⁶¹ This resolution can be interpreted as an attempt to protect the natural resources of states and nations in times of armed conflict. The most important general regulation of this kind of claim in the treaty law includes the ICCPR and ICESCR: “In no case may a people be deprived of its own means of subsistence”.¹⁶² As a rule, sovereign rights do not pass to the occupant. With regard to property, this is provided for in Article 55 of the Hague Regulations, which states that the occupying state should be considered only as the administrator and user of public buildings, real estate, forests and farm holdings belonging to an enemy state but located in occupied territory. In addition, the occupying state should protect the value of these assets and rule them in accordance with the rules of use. The concept of “use” of property determines that the occupying state cannot rule a property and may only use it subject to the requirement to protect the capital of a given property. The application of this principle to non-renewable resources, such as mineral resources, remains controversial.¹⁶³

3.2 The economic development of the state and the prosperity of nations

3.2.1 The right to use natural resources for the development of the country

The right to use natural resources for the development of the country was expressed in Resolution No. 626 (VII),¹⁶⁴ which affirms that states can freely exercise their rights to exploit their wealth and natural resources wherever they deem it desirable for their own progress and economic development. Resolution No. 1803 (XVII) refers to the development of the country and the well-being of the nation of a given state.¹⁶⁵ The first act that combined the right to permanent sovereignty with the claims of developing countries for a greater share in the processing, marketization and distribution of natural resources was Resolution No. 2158 (XXI).¹⁶⁶ This concept is also indirectly included in the Declaration on the Establishment of a New International Economic Order¹⁶⁷ as the right to obtain fair and stable, equal and cost-effective prices, and the right to conduct pricing policies as well as to coordinate production policies and membership in producer associations.¹⁶⁸ It is also important that the expression “and development” was added to the principle 21 formulated in the Stockholm Declaration¹⁶⁹ and that it was subsequently incorporated in principle 2 formulated in the Rio Declaration.¹⁷⁰ This reformulation points out that environmental policy of developing countries cannot replace their development policies, especially in reference to their exploitation of natural resources. Morover, Resolution No. 3171 (XXVIII) states that a better use of natural resources is possible when the steps to be taken include all stages, from exploration to marketization.¹⁷¹

The UN Framework Convention on Climate Change¹⁷² explicitly refers to the sovereign right of states to exploit resources in accordance with their own development policy. One of the objectives of the Energy Charter Treaty was to help Central and Eastern Europe and the Commonwealth of Independent States¹⁷³ to develop their energy potential and to stimulate their economic growth. In addition, the regulations contained in the Conventions on the Succession of the States of 1978 and 1983 regarding the principle of permanent sovereignty over natural resources indirectly aim at reserving the benefits from the exploitation of natural resources for the nations of newly independent states.¹⁷⁴

3.2.2 The duty to exercise the nation’s sovereignty for the development and prosperity of nations

Resolution No. 523 (VI)¹⁷⁵ provides for the rights of underdeveloped countries to freely determine how their natural resources will be used under the condition that they are used in a way that will lead them to achieve the best position for further implementation of their economic development plans, in accordance with their national interests. Resolution No. 626 (VII)¹⁷⁶ sets less stringent conditions stating that the use of resources is to proceed as countries deem it desirable for their own progress and economic development. Resolution No. 1803 (XVII),¹⁷⁷ on the other hand, contains specific guidelines on the exercise of the right to permanent sovereignty, stressing in the first paragraph that the right of peoples and nations to permanent sovereignty over their wealth and natural resources must be done in the interest of their national development and the well-being of the inhabitants of a given state. In this way, the UN General Assembly clearly linked the exercise of permanent sovereignty over natural resources with the requirement to promote the development of the country and the well-being of its population that should