foreign ownership. Less attention was paid to the scope of obligations incumbent on the state while exercising their sovereignty over natural resources. Nico Schrijver, based on previous research conducted by: R. Bernhardt,126 R. Higgins,127 M. Dixon and R. McCorquodale,128 the World Bank Group,129 J. Makarczyk,130 C. N. Brower,131 and A. Mourie,132 put forward the thesis that the formulation of laws inspired by the principle of permanent sovereignty over natural resources is often accompanied by the imposition of obligations aimed at introducing or restoring the balance between rights and interests of all parties involved and at protecting the quality and diversity of natural resources, also for future generations.133 According to Schrijver’s concept, the following rights derive from this principle: the right to freely dispose of natural resources; the right to free exploration and exploitation of natural resources; the right to regain effective control and compensation; the right to use natural resources for domestic development; the right to manage natural resources in accordance with the state’s environmental policy; the right to a fair share of the benefits of cross-border natural resources; the right to regulate foreign investments; the right to expropriate or nationalize foreign investments; and the right to settle disputes under national law. As the corresponding duties, Schrijver mentions: the exercise of permanent national sovereignty for the development and prosperity of nations; respect for the rights and interests of indigenous peoples; the duty of cooperation for international development; protection and sustainable use of natural wealth and resources; fair distribution of cross-border natural resources; respect for international law and fair treatment of foreign investors; and obligations related to the right to take over foreign ownership.
Listing of all international agreements relating to the above-mentioned rights and obligations remains outside the research area of this work. From the perspective of global governance, however, it is reasonable to indicate representative universal as well as regional and multilateral treaty solutions, judgments of international courts and tribunals, and non-binding guidelines to support the thesis of a certain legal international right or obligation directly related to the exercise of permanent sovereignty over natural resources. For the purposes of this work, the rights and obligations in question have been organised into five separate thematic areas: management of natural resources; development of the country and prosperity of nations; environmental protection; international cooperation; and investment protection.
3.1 The management of natural resources
3.1.1 The right to freely dispose of natural resources
The sovereign right of a state to freely dispose of wealth and natural resources within the limits of national jurisdiction is clearly highlighted in virtually all resolutions regarding permanent sovereignty.134 It is closely related to the principle that every state has the right to adopt a social and economic system it considers to be most beneficial for its development.135 This right is also expressed in the International Covenant on Civil and Political Rights (ICCPR)136 and the International Covenant on Economic, Social and Cultural Rights (ICESCR),137 as well as the African Charter on Human and Peoples’ Rights (ACHPR).138 A similar regulation is included in the Convention on Biological Diversity.139 The Energy Charter Treaty recognizes the sovereignty of the state and sovereign rights to energy resources and provides that it in no way violates the regulations of the Contracting Parties that regulate the system of ownership of energy resources. The Treaty stipulates that each state retains the right to decide which geographic areas within its territory are to be made available for exploration and development of energy resources.140
The right to freely dispose of natural resources is also recognized in the decisions of arbitration courts. In the Liamco ruling (1977)141 a similar view was expressed. The Tribunal noted that Resolution 1803 (XVII)142 recommends respect for the sovereign right of the state to dispose of its property and natural resources and stated that resolutions, even if they are not unanimous sources of law, are proof of the dominant trend of international opinion regarding the sovereign right of states to their natural resources. In the Aminoil (1982) ruling, it was also noted that many constitutions foresee that all natural resources are state-owned.143
The Texaco judgment (1977) indicates, however, that territorial sovereignty grants the state exclusive competence to freely organize the economic structure of its territory and to introduce reforms that may seem desirable. Choosing and freely shaping the economic and social system is a significant privilege of sovereignty for the constitutionally authorized state organs. International law grants this privilege to the state, as well as the privilege of freely defining its political regime and its constitutional bodies.144 The Texaco ruling clearly indicates that the right of states to dispose of their natural resources includes the right to exercise sovereignty by undertaking international obligations towards other states and non-state actors.145 The sole arbitrator J. Dupuy introduced a distinction between “enjoyment” and the “exercise” of sovereignty. In his opinion, the concept of permanent sovereignty can be completely reconciled with the situation where a state concludes a contract that leaves the control of the other party to the contract in its territory under state control. Otherwise, each contract concluded between the state and a private foreign entity would be contrary to ius cogens regarding the exploitation of natural resources. Therefore, the concession agreement does not constitute a transfer of sovereignty, but only its limitation: the state retains, in reserved areas, the power over the operations carried out by the concessionaire, and the continuation of the exercise of sovereignty is manifested, for example, by the obligations imposed on it.146
The state therefore has considerable freedom in managing its natural resources and can assume obligations with respect to the exercise of its sovereignty by voluntary arrangements, provided that they do not transfer its sovereign entitlement to a private entity. The question then arises, where the discretion of the state reaches its limits, with allegedly “inalienable” and “permanent” character of sovereignty. As indicated by the ILA in the Seoul Declaration, permanent sovereignty is not transferable. However, the state may accept obligations with respect to the exercise of such sovereignty by way of a freely concluded contract.147 It follows that in each particular case, verification should be made as to whether the act actually infringes state sovereignty over its natural resources.148
