The latest OECD Guiding Principles on Durable Extractive Contracts, developed through years of consultations, represent the most inclusive and comprehensive consensus on stabilization clauses in a decade. These principles call for a more limited use of stabilization clauses and emphasize alternatives, particularly distinguishing between fiscal and non-fiscal issues.
This practice note explores the historical context behind stabilization clauses and the growing controversy surrounding their use. It then delves into the evolution of international standards on the subject, culminating in the 2020 OECD principles. Offering practical guidance, the note helps governments and companies navigate the complexities of stabilization clauses and align their contracts with these new standards, paving the way for a more balanced, predictable, and adaptive approach to mining agreements.
