Permanent Sovereignty over Natural Resources

In one line

Permanent sovereignty over natural resources was asserted in General Assembly resolutions from 1952, elaborated in resolution 1803 (XVII) of 1962, and made a treaty obligation by article 1(2) of both Covenants in 1966, which is why it survived when the rest of the programme did not.

The sequence

Resolution 523 (VI) of 1952 first linked economic development to the right of States to determine the use of their natural resources.

Resolution 626 (VII) of 1952 recommended that States refrain from acts, direct or indirect, designed to impede the exercise of the sovereignty of any State over its natural resources.

Resolution 1803 (XVII) of 14 December 1962, on Permanent Sovereignty over Natural Resources, is the central instrument, adopted by a large majority including the industrialised States.

Its terms. The right of peoples and nations to permanent sovereignty over their natural wealth and resources must be exercised in the interest of their national development and of the well-being of the people of the State concerned. Exploration and development are to be in conformity with the rules and conditions the peoples and nations freely consider necessary. Imported capital and its earnings are governed by the terms of the authorisation, national legislation and international law. And nationalisation, expropriation or requisitioning is permitted on grounds of public utility, security or the national interest, which are recognised as overriding purely individual or private interests, both domestic and foreign.

The compensation clause in resolution 1803 is the one to memorise, because the 1974 Charter departs from it: the owner shall be paid APPROPRIATE COMPENSATION, in accordance with the rules in force in the State taking such measures in the exercise of its sovereignty and in accordance with international law.

Note the two limbs, national rules AND international law. In 1974 the second limb disappears, and that disappearance is the point of maximum conflict in the whole subject. [Nationalisation, Compensation and the Industrialised States Answer].

Resolution 1803 also provides for the settlement of disputes by adjudication or international arbitration upon agreement by sovereign States and other parties concerned, after exhaustion of national jurisdiction.

Article 1(2) of the Covenants

All peoples may, for their own ends, freely dispose of their natural wealth and resources without prejudice to any obligations arising out of international economic co-operation, based upon the principle of mutual benefit, and international law. In no case may a people be deprived of its own means of subsistence.

Identical in both Covenants, and binding on every party since 1976.

Three elements.

Free disposal, for their own ends, which is the substance.

Without prejudice to obligations arising out of international economic co-operation based on the principle of mutual benefit, and international law, which is the qualification that the industrialised States insisted on and which preserves existing contractual and treaty obligations.