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

resources within their territories. On the one hand, permanent sovereignty over natural resources was part of a movement aimed at strengthening the political and economic sovereignty of newly independent states, especially in Latin America. It can be seen as a derivative of the principle of national sovereignty established at that time, which includes economic jurisdiction over natural resources as well as domestic and foreign economic activity in the state. On the other hand, sovereignty over natural resources has become an inseparable element of the struggle of colonial peoples and non-governing territories for political independence based on a much younger principle of self-determination. In this way, sovereignty over natural resources has become an integral part of the decolonization movement, because it was widely believed that achieving political self-determination would be only apparent unless economic self-determination were carried out simultaneously.²² The UN General Assembly Resolution 523 (VI) of 12 January 1952 on integrated economic development and commercial agreements,²³ adopted on that date, recognizes that underdeveloped countries have the right to freely shape their natural resources, and they should do so in a way that would ensure their better position in further implementation of their economic development plans, in accordance with their national interests, as well as in line with continuing development of the global economy. The Resolution also indicates that commercial agreements should not contain economic or political conditions that violate the sovereign rights of underdeveloped countries, including the right to define their own plans for economic development.²⁴ Following the Iranian nationalization of the Anglo-Iranian Oil Company in 1952, Uruguay submitted a motion for a resolution that recommended that countries should recognize the right of each country to nationalize and freely use its natural resources as an important factor in independence. In the same year, UN General Assembly Resolution No. 626 (VII)²⁵ stated that the right of nations to freely use and exploit their natural resources and health is within their sovereignty.²⁶

The General Assembly Resolution No. 1314 (XIII) of 1958²⁷ established a Committee for permanent sovereignty over natural resources, whose task was to conduct a full study of the state of permanent sovereignty over natural resources as a fundamental component of the right to self-determination, with a recommendation for its possible strengthening. In addition, it was decided to pay due attention to the rights and obligations of states arising from international law, as well as the importance of supporting international cooperation for the economic development of developing countries. As a result of the Committee’s activities, Resolution No. 1803 (XVII) was adopted regarding permanent sovereignty over natural resources,²⁸ in which the concept of permanent sovereignty over natural resources was reiterated and it was stated that the right of peoples and nations to permanent sovereignty over natural resources should be exercised in the interest of their national development and in the interest of the well-being of the people in a given state (Article 1). According to Article 2, the search, development, and disposal of natural resources, as well as the acquisition of foreign capital for these purposes, should be consistent with the principles and conditions that peoples and nations are free to consider necessary or desirable with regard to granting, restricting, or prohibiting such activities. The next two articles contain regulations regarding the treatment of foreign investors. According to Article 3, the profits derived from investments must be shared between the investor and the host country in accordance with the freely agreed profit sharing ratio. Moreover, nationalization, expropriation, or requisition should be based on considerations of public utility, security and national interests, while disputes should be resolved by agreement of the parties, in arbitration or by international courts (Article 4). The Resolution refers in its content to the importance of sovereign equality of states (Article 5) and stipulates that international cooperation and development must be directed towards supporting the independent development of developing countries and based on respect for their sovereignty in terms of their wealth and natural resources (Article 6). Article 7 emphasizes that the violation of the rights of peoples and nations to sovereignty over their wealth and natural resources is contrary to the spirit and principles of the United Nations Charter and hinders the development of international cooperation for the maintenance of peace. Article 8 combines investment regulations with the question of sovereignty over natural resources and stipulates that investment agreements concluded with a foreign entity should be respected in good faith and that states and international organizations should respect the sovereignty of peoples and nations over natural resources, in accordance with the Charter of the United Nations and the rules set out in this Resolution.

      

Although the Resolution is declaratory and expresses the then legal status in the area in question, it also contains quasi-legal elements, which are: granting the attribute of sovereignty over natural resources both to the state for its own development and people for their well-being (Article 1); legal international approval for taking over other people’s property (Article 4 sentence 1); and giving priority to domestic dispute resolution measures (Article 4 sentence 2). The resolution also shows programme features by introducing guidelines on the distribution of profits in arbitrarily set ratios (Article 3) and indicating support for independent development of developing countries, based on respect for their sovereignty in terms of their wealth and natural resources (Article 6) as the objective of international cooperation.²⁹ Being the result of intense preparatory work and fruitful discussions and responding to the need to achieve political consensus on this issue, Resolution 1803 (XVII) soon became the declaration of economic decolonization – a derivative of the political declaration as enshrined in Resolution No. 1514 (XV).³⁰ It has been adopted by many countries, representing not only all geographical areas, but also all the economic systems of the world. Consequently, it formulates the opinio iuris communis of the international community and thus reflects the state of customary international law in this field, including the contentious issue of nationalizing foreign ownership under international law.³¹

The above solutions became the basis for adopting further regulations, oriented on the need to strengthen the national potential for the development, as well as the use and marketization of resources. In 1964, the United Nations Conference on Trade and Development (UNCTAD) was convened.³² General Principle Three of the Final Act of UNCTAD³³ stipulates that any state has the sovereign right to freely trade with other countries and to freely dispose of its natural resources in the interest of economic development and well-being of its citizens. This statement was reinforced by Resolution No. 2158 (XXI)³⁴ adopted in 1966, which stresses that in order to ensure the exercise of permanent sovereignty over natural resources, it is essential that their exploitation and marketing are oriented to achieve the fastest possible growth rate of developing countries. The resolution also establishes a link between resource sovereignty and development by stating that the natural resources of developing countries are the basis for their economic development in general and their industrial progress in particular. It also recognizes that in order to ensure sustainable sovereignty over natural resources, developing countries commit to exploiting their natural resources and trading them in such a way that they can gain as many benefits as possible in the interest of their national development. Foreign capital can play an important complementary role, but developing countries should on an equitable basis ensure adequate participation in management and profits of foreign companies. These, in turn, should train national staff at all levels. This resolution has therefore placed an emphasis on the exercise of