Foreign Direct Investment in Agriculture : Land Grab or Food Security Improvement?

Is there something really new about "land grab" except its extent? What is wrong with an investment contract allowing the holder to buy a farm and to export wheat to Saudi Arabia, or soybeans and maize as cattle feed to Korea, or to plant and process sugar cane and palm oil into ethanol for Europe and China? Why would the governments signing such investment contracts not know whether and which foreign investment projects are best for their country, and how to attract them? This chapter tries to show that land grab, where it occurs, is not only yet another symptom of regulatory failures at the national level and a lack of corporate social responsibility by certain private actors. National governance is clearly the most important factor. Nonetheless, it is submitted that there is an international dimension involving investor home states in various capacities. The implication is that land grab is not solely a question whether a particular investment contract is legal or not. The numerous new codes of conduct, voluntary guidelines and principles for responsible agricultural investment tend to focus on the national dimension of land grab. This chapter deals with legal issues which seem to have largely escaped the attention of both human rights lawyers and, especially, of investment lawyers. It addresses this fragmentation between different legal disciplines, rules, and policies, by asking two basic questions: (i) Do governments and parliaments in investor home countries have any responsibility in respect of the behaviour of their investors abroad? (ii) What should they and international regulators do, if anything?