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The IISD Guide to Negotiating Investment Contracts for Farmland and Water

The IISD Guide to Negotiating Investment Contracts for Farmland and Water is a legal and policy tool for government officials and communities that are involved in negotiating investment contracts with foreign investors. The guide focuses on a particular type of contract between states and foreign investors involving long-term leases of farmland. Almost 80 contracts were reviewed for this guide. The majority of contracts (71) are from Africa, six are from Asia and one is from Latin America.

Part 1 is designed to assist in preparing for negotiations. It explains the role of contracts in the broader investment framework; the key issues that governments, investors and communities must grapple with prior to negotiations; and some processes to assist in improving the effectiveness of negotiations.

Part 2, the Model Contract, is structured like an investment contract for the lease of farmland and proposes model provisions. The approach in the Model Contract is to be comprehensive and cover the range of issues that might arise, but in practice, each country will defer to its own domestic laws to determine what to include in their contracts. The range and detail of issues covered may also not be relevant to all sizes of investment. In this respect, the contents page serves as an important “checklist” for negotiators.

The IISD guide also emphasizes the importance of transparency. At a minimum, all investment contracts and other relevant documentation should be made public, subject to the redaction of truly confidential business information.

Improving the legal and policy frameworks for investment will help governments maximize the benefits and minimize the risks associated with investment in agricultural land and water. This guide is one tool to help achieve those ends.