Stabilization clauses and human rights concerns
This chapter discusses the human rights concerns arising from the insertion of stabilization clauses in concession agreements. It also discusses the compensation standards under international investment law. Two standards of compensation prevail under international investment law: the “Hull Principle” and the “appropriate compensation” standard. It has been seen that breach of a concession agreement means that the host State must compensate the investor. If there is stabilization clause in the concession clauses then this elicits a legitimate expectation on the part of the investor. The stabilization clause is certainly couched in very broad terms and has attracted intense criticism from organizations such as Amnesty International. The chapter looks at the human rights aspects concerning stabilization clauses. In so doing, it examines three case studies: The MDA Agreement between Liberia and Mittal Steel Holdings AG, the Chad-Cameroon Pipeline Project, and the Baku-Tbilisi-Ceyhan Pipeline Project.