Mineral investment and the regulation of the environment in developing countries: Lessons from Ghana

Abstract

This article examines the relationship between foreign direct investment in the mineral sector and environmental regulation in developing countries. It argues that two major trends in global mineral investment have emerged in recent years: increased competition amongst developing countries to attract mineral investment, and the development and proliferation of a standard set of legal protections for mineral investors including access to international arbitration, prohibitions of expropriation without compensation, and commitments to stability of the regulatory regime. Both of these trends may have implications for environmental policy, which are examined in the paper both in general terms and in the context of a detailed case study concerning mineral exploitation in Ghana's forest reserves. © Springer Science+Business Media B.V. 2006.