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Investment Contracts for Farmland and Water: 10 Steps

This document is a tool for parliamentarians, government officials, landholders and local communities who are involved in negotiating investment contracts with foreign investors for agricultural land and water.

It presents 10 key steps to follow when negotiating the contract from a sustainable development perspective. It is an overview of a more detailed and comprehensive handbook, which proposes model legal provisions for an investment contract.

The Land Matrix Partnership reports that more than 1,217 deals were concluded between 2000 and 2009 in developing countries, covering 83.2 million hectares of land. As a contribution to improving the quality of all contracts, 60 contracts were examined for this document.

The following are the 10 key steps suggested to negotiate and draft investment contracts that support sustainable development:

  1. 1. Prepare the Negotiating Environment
  2. 2. Conduct Feasibility Studies
  3. 3. Conduct Impact Assessments
  4. 4. Allocate Land and Water Tenure Rights
  5. 5. Determine Financial and Other Incentives
  6. 6. Avoid Stabilization Provisions
  7. 7. Specify the Investor's Development Obligations
  8. 8. Identify Environmental Parameters
  9. 9. Choose an Appropriate Dispute Settlement Mechanism
  10. 10. Ensure Reporting, Monitoring and Evaluations

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