Residents of the municipality of San Rafael Las Flores maintain a permanent sit-down in front of the Constitutional Court, in the centre of Guatemala’s capital, to demand that the country's highest court rule on the demand for a suspension of the San Rafael mining company's permit to operate a mine in that municipality. Credit: Edgardo Ayala / IPS

By Edgardo Ayala
GUATEMALA CITY, May 4 2018 (IPS)

Rosa Dávila is busy cooking ears of corn, to be eaten by the men and women who have set up a checkpoint on the side of the road to block the passage of supplies sent to a mining company that operates in the area.

The San Rafael mining company, a subsidiary of the Canadian company Tahoe Resources, is located on the outskirts of San Rafael Las Flores, a town 96 km southeast of Guatemala City, in the department of Santa Rosa.

The roadblock has been mounted by the inhabitants of Casillas, a neighbouring rural municipality, located a few kilometres down the road, and which cannot be avoided on the way to the mine. Other transit points have also been blocked by the “resistance”, as the anti-mining protesters refer to themselves.

“The first thing we want, for God’s sake, is for them to go back to their country,” said Dávila, a 48-year-old homemaker and mother of seven, as she stoked the fire.

The residents of this and other neighbouring municipalities are firmly opposed to the company’s mining operations, due to the social and environmental damage they say has been caused since they began in 2007.

Conflicts like this have broken out in other areas of Guatemala and in other Central American countries, not only with mining companies but also with hydroelectric power companies.

“It’s not fair, and the worst thing is that they never asked us if we wanted these companies to come here,” Dávila told IPS while moving about in the kitchen set up in an improvised camp, which IPS visited on Apr. 29.

The lack of prior consultations with the communities where such projects are installed is a recurrent problem in the countries of Central America, whose governments fail to comply with international regulations that call for prior consultation over whether or not the population approves of these investments.

In late April, environmental organisations held in the Guatemalan capital the Second Regional Meeting of the Central American Alliance against Mining, which concluded with the requirement that the governments of the region comply with international and regional obligations to guarantee the right to free, prior and informed consultation.

“We call upon Central American governments to reflect on the viability of what they call development, when we know that the extractive industry is a model of destruction and death for our countries,” explained Julio González, of the Guatemalan environmental organisation MadreSelva, at the end of the meeting, on Apr. 27.

That organisation and the other participants in the meeting have joined forces in the regional Alliance against mining, in order to constitute a block with more power in the face of the activities of the extractive industries in Central America.

In the municipality of Casillas, in the department of Santa Rosa, in Guatemala, local inhabitants erected a roadblock on the road that leads to the San Rafael Las Flores mine, blocking the passage of trucks carrying supplies to the site. In the picture, Rosa Dávila (centre) peels ears of corn in the activists’ improvised camp. Credit: Edgardo Ayala / IPS

One of the rules under which the organisation operates is ILO Convention 169 on Indigenous and Tribal Peoples, in force since September 1991, which has been ratified by 22 countries, including all countries in Central America except El Salvador and Panama.

Article 6 of the Convention establishes that governments shall “consult the peoples concerned, through appropriate procedures (…) whenever consideration is being given to legislative or administrative measures which may affect them directly,” such as when a national or municipal state institution grants a concession to international consortiums.

But that is basically dead letter in the Central American countries that have ratified it, said activists consulted by IPS during the meeting.

The governments have not promoted consultations, because they believe that important development projects would be halted, so it is the affected communities that have carried out their own consultations, they added.

In Guatemala, where 63 percent of the population is indigenous, around 90 such consultations have been held, by show of hands.

“Before the hydroelectric companies were to arrive, we began to carry out consultations, and we asked whether these businesses have the right to take our rivers, and the vast majority said no,” 69-year-old Mayan Indian Cirilo Acabal Osorio told IPS.

So far they have managed to stop attempts by companies to install projects in the eight communities putting up resistance in that region, which are predominantly Mayan, said the native of Zona Reina, municipality of Uspatán, in the department of Quiche in northwestern Guatemala.

In Honduras more than 40 open town meetings have been held in which the population of different localities has rejected similar projects, said Pedro Landa, of the Reflection, Research and Communication Team (ERIC), attached to the Jesuits.

“But the State continues to ignore the will of the people,” he said.

Environmentalist activists said local governments in the area consider the consultation processes to be non-binding, and as a result do not take them into account.

Before the Salvadoran legislature approved, in March 2017, a historic law prohibiting metal mining in all its forms, civil society organisations carried out popular consultations in at least four municipalities, under the Municipal Code.

For now there is no need for further consultations, as the law banned mining company investments. But the spectre of mining is still present after the right-wing parties, its natural allies, obtained an overwhelming majority in the Legislative Assembly in the Mar. 4 elections, warned Rodolfo Calles, of the Association for the Development of El Salvador (CRIPDES).

Convention 169 refers only to indigenous peoples, although the experts said in the meeting that national laws that serve the same purpose can be applied: people affected by any industrial activity must be informed and consulted beforehand.

“In the case of countries that do not have indigenous communities, they will use other mechanisms that they undoubtedly have, such as referendums,” Sonia Gutiérrez, an expert with the Association of Mayan Lawyers and Notaries of Guatemala, told IPS.

The extractive industry has no economic weight in the region, despite its impacts on the environment and on production in the communities where it operates, Nicaraguan activist Olman Onel told IPS. He pointed out that in his country, for example, it only contributes one percent of GDP and 0.66 percent of employment.

On the other hand, the participants in the forum denounced the police and judicial persecution suffered by environmentalists in the whole region, as a mechanism to silence opposition to such projects.

Landa, of ERIC, said that in Honduras, where more than 800 extractive projects and 143 hydroelectric projects have been approved in recent years, at least 127 environmentalists have been killed, including Berta Cáceres.

She was riddled by bullets on Mar. 3, 2016, for her fierce opposition to the construction of the Agua Zarca hydroelectric dam, located between the departments of Santa Bárbara and Intibucá, in the northwest of the country.

Meanwhile, in San Rafael Las Flores, local inhabitants have organised to defend their land and their livelihood, agriculture, although the damage caused by the extractive activity is already evident, they said.

Rudy Pivaral, a 62-year-old farmer, told IPS that the impacts on the flora and fauna are already being felt, and there is a decrease and drying up of water sources, which makes it impossible to continue producing two or three harvests a year, in addition to the health problems associated with water pollution.

Around 96 families in the village of La Cuchilla, on a hill next to the site, had to be evicted because of damage to the walls of the houses, due to the vibrations produced by the drilling in the ground.

Dorcas Makaza-Kanyimo (left), acting director of Women and Law in Southern Africa, participates in a workshop on women in the extractives industry in Hwange, Zimbabwe. Credit: Sally Nyakanyanga/IPS

By Sally Nyakanyanga
HARARE, Mar 8 2018 (IPS)

Tapiwa Moyo, 40, religiously leaves her home each day when the first cock crows and joins a throng of women who have taken up artisanal mining in her community.

Moyo spends the better part of her day tramping to and fro, carrying sacks on her back packed with river sand that she sifts through in hope of finding flecks of gold. Working with their limbs in muddy water up to the knees, the women see small-scale mining as a path to improve their livelihoods and bolster scanty family incomes.“As a country, it’s imperative that we have a mining policy that is responsive to women’s needs in the sector." --Dorcas Makaza-Kanyimo

“As an unemployed single mother, I’m left with no choice but to find means to fend for my five children who are of school-going age. I have no one to cover my back, as such I joined other women in artisanal mining for a living,” says Moyo.

Mining in Zimbabwe has been largely a men’s affair, but women are slowly making inroads in the sector. Despite the rudimentary methods still used in artisanal mining, women are now wielding picks and shovels alongside men as they scavenge for valuable minerals.

But Dorcas Makaza-Kanyimo, the acting director for Women and Law in Southern Africa (WLSA), Zimbabwe, says more must be done to pave the way for real gender equality in the sector.

“There is need for reduction of costs of mining claims, provision of suitable loan facilities for women to be able to access capital to start mining thereby enabling them to purchase the needed mechanized equipment for their mining operations,” Makaza-Kanyimo told IPS.

Women comprise 11-15 percent of the estimated 50,000 small-scalers miners in the country. A 2017 report entitled Women’s Economic Empowerment in SSB – Recommendations for the Mining Sector, reveals that though the mining sector remains a key driver to economic growth and transformation in Sub-Saharan Africa, rarely has it delivered benefits in reducing poverty and improving livelihoods for the majority of the population.

“Women in particular have struggled to avail themselves of the benefits and opportunities of large-scale mining operations and often disproportionately suffer from the negative impacts of the industry,” the study says.

Dorcas Makaza-Kanyimo agrees. “The Ministry of Mines should run programs that promote women in mining in terms of allocating machines, and allow women to access these loans with minimum requirements in terms of collateral as women don’t have the collateral required by banks,” she told IPS.

WLSA Zimbabwe provides education and outreach to ensure women in the extractives industry understand the legal framework.

“We have been supporting these women on how one can get a legal mining claim, as we know most women are mining illegally as artisanal miners and operating in an unregulated environment. This makes women vulnerable as a lot of things happen in that environment – women can experience violence, rape, be elbowed out by men and cheated by gold buyers when they try to sell their gold,” says Makaza-Kanyimo.

Currently, Zimbabwe is still governed by the 1961 Mines and Mineral Act, which was enacted during the colonial era. Calls are now mounting to ensure the new mining statutes are more gender responsive.

The country is going through a reform process called the Mines and Mineral Bill, which is now in parliament and will be up for its second reading on March 12. However, groups such as WLSA Zimbabwe say it should explicitly provide for women to get an equal share of mining claims.

“As women miners, we need a friendly environment, particularly revising the costs of owning a mining claim. We are unable to own these mining claims because we don’t have the means – that’s why you find many women in [unregulated] artisanal mining,” says Moyo.

As the world celebrates International Women’s Day under the theme “The Time is Now – Rural and Urban Activists Transforming Women’s Lives,” gender-responsive policies for women in the extractives industry could play an important role in their economic empowerment and development.

In Africa, where most countries are endowed with rich mineral resources, women remain largely impoverished and their participation in the extractives sector is marginal. Though no countries have a fully gender-balanced approach, South Africa has been praised as a progressive example – and one Zimbabwe should examine as it creates its own comprehensive policy.

“Issues of gender are very much included in the South Africa mining charter, although they still have their challenges on implementation of certain aspects in terms of their mining law, but they have made great strides in terms of achieving gender equality,” Makaza-Kanyimo added.

The majority of women in engage in small-scale artisanal mining, and WLSA Zimbabwe notes that South Africa’s law provides for mining syndicates and consortiums so groups can buy mining claims together.

As such, women miners like the Mtandazo Women Miners Association in Gwanda, Matebeleland North have recorded some success stories. Sithembile Ndhlovu, the founder, has since bought three mining claims of her own. These women have also been encouraging each other by forming savings and loan groups in order to raise money to buy mining claims.

“I was seeing them (men) managing to drive their own cars and feeding their families. I was going to work every day, but could see that the money was not sustaining me and my family,” says Ndhlovu.

The Mtandazo Women Miners Association is made up of 32 small-scale miners and its members have received training on the fundamentals of mining from the Zimbabwe School of Mines. Women miners are strongly encouraged to register and regularise their mining operations, which enables them to have access to loans and possibly equipment that opens up new opportunities.

“As a country, it’s imperative that we have a mining policy that is responsive to women’s needs in the sector. We should stand in solidarity with women who are organizing against destructive extractivism. Women have realized that they are mostly impacted in the extractive industry,” Makaza-Kanyimo added.

Tapuwa O’bren Nhachi, research coordinator at the Center for Natural Resource Governance (CNRG), says the Mines and Minerals Bill needs to recognize artisanal mining as an activity which contributes to the economy.

“We need to decriminalize it so women can operate in a free environment without being harassed,” Nhachi told IPS.

Nhachi added his organization has since trained 27 women artisanal miners who are now operating in syndicates and have their own claims.

Excerpt:

President Jacob Zuma answers questions at the National Council of Provinces on Oct. 25, 2016. During the session, he said Operation Phakisa helped drive investments worth R17 billion toward ocean-based aspects of the economy since 2014. Courtesy: Republic of South Africa

By Mark Olalde
JOHANNESBURG, Nov 17 2016 (IPS)

A persistent fear of diminishing phosphorus reserves has pushed mining companies to search far and wide for new sources. Companies identified phosphate deposits on the ocean floor and are fighting for mining rights around the world.

Countries in southern Africa have the potential to set an international precedent by allowing the first offshore mining operations. South Africa specifically is one of the first countries on the continent to begin legislating its marine economy to promote sustainable development, and questions surround mining’s place in this new economy.While the fishing and coastal tourism industries account for slightly more than 1.4 billion dollars of GDP, the potential economic benefits from marine mining remain unclear.

From April 2007 to August 2008, the price of phosphate, a necessary ingredient in fertilizer, increased nearly 950 percent, in part due to the idea that phosphate production had peaked and would begin diminishing. Before prices came back down, prospectors had already begun looking for deep sea phosphate reserves around the world.

Since then, the fledgling seabed phosphate industry has found minimal success. While several operations are proposed in the Pacific islands, New Zealand and Mexico rejected attempts at offshore phosphate mining in their territory.

This means southern African reserves – created in part by currents carrying phosphate-rich water from Antarctica – are the new center of debate.

Namibia owns identified seabed phosphate deposits, and the country has recently flip-flopped about whether to allow mining. A moratorium was in place since 2013, but in September the environmental minister made the controversial decision to grant the necessary licenses. Since then, public outcry forced him to set those aside.

Most attempts at seabed phosphate mining have sputtered in the face of moratoriums and other roadblocks. Graphic courtesy of Centre for Environmental Rights

The former general project manager of Namibian Marine Phosphate (Pty) Ltd, a company that applied to mine in Namibia, told IPS that environmental groups and fisheries proved to be a loud and organised opposition. He predicted the debate in South Africa would be just as difficult for mining companies to win with no precedent for such mining.

Adnan Awad, director of the non-profit International Ocean Institute’s African region, said, “There is generally this anticipation that South African processes for mining and for the policy around some of these activities are setting a bit of a precedent and a bit of a model for how it can be pursued in other areas.”

Three companies, Green Flash Trading 251 (Pty) Ltd, Green Flash 257 (Pty) Ltd and Diamond Fields International Ltd., hold prospecting rights covering about 150,000 square kilometers, roughly 10 percent, of the country’s marine exclusive economic zone.

Diamond Fields International’s prospecting right along 47,468 square kilometres of the Indian Ocean shares space with areas of oil exploration and production. Source: Diamond Fields International Ltd. background information document

The law firm Steyn Kinnear Inc. represents both Green Flash 251 and Green Flash 257. “Currently it does not seem as if there is going to be any progress, and there is definitely not going to be any mining right application,” Wynand Venter, an attorney at the firm, said, calling the project “uneconomical.”

Venter said the Green Flash companies received drill samples, which showed current prices could not sustain seabed phosphate mining.

This leaves Diamond Fields as the only remaining player in South African waters. The company announced in a January 2014 press release that it received a 47,468 square kilometer prospecting right to search for phosphate.

According to information the company published summarising its environmental management plan, prospecting would use seismic testing to determine the benthic, or seafloor, geology. If mining commenced, it would take place on the seafloor between 180 and 500 meters below the surface.

“A vital and indisputable link exists between phosphate rock and world food supply,” the company stated, citing dwindling phosphate reserves.

Diamond Fields did not respond to repeated requests for comment.

Environmentalists argue that not only would phosphate mining destroy marine ecosystems, but it would also lead to continued overuse of fertilizers and associated pollution. They call for increased research into phosphate recapture technology instead of mining.

“We could actually be solving the problem of too much phosphates in our water and recapturing it. Instead we’re going to destroy our ocean ecosystems,” John Duncan of WWF-SA said.

The act of offshore mining requires a vessel called a trailing suction hopper dredger, which takes up seafloor sediment and sends waste back into the water column.

A southern right whale swims off the coast of the Western Cape province near Hermanus, a town renowned for its whale watching. South Africa’s Department of Mineral Resources granted three prospecting rights covering about 150,000 square kilometers, or 10 percent, of the country’s exclusive economic zone. Credit: Mark Olalde/IPS

“It amounts to a kind of bulldozer that operates on the seabed and excavates sediment down to a depth of two or three meters. Where it operates, it’s like opencast mining on land. It removes the entire substrate. That substrate become unavailable to fisheries for many years, if not forever,” Johann Augustyn, secretary of the South African Deep-Sea Trawling Industry Association, said.

In addition to direct habitat destruction, environmentalists argue the plume of sediment released into the ocean could spread out to smother additional areas and harm wildlife.

Mining opponents also worry offshore mining would negatively impact food production and economic growth.

Several thousand subsistence farmers live along South Africa’s coast, and the country’s large-scale fishing industry produces around 600,000 metric tonnes of catch per year.

“[Mining] may lead to large areas becoming deserts for the fish populations that were there. If they don’t die off, they won’t find food there, and they’ll probably migrate out of those areas,” Augustyn said.

While the fishing and coastal tourism industries account for slightly more than 1.4 billion dollars of GDP, the potential economic benefits from marine mining remain unclear. There are no published estimates for job creation, but Namibian Marine Phosphate’s proposal said it would lead to 176 new jobs, not all of them local.

“The benefits are not coming back to the greater South African community,” Awad said. “African countries generally have been quite poor at negotiating the benefits through multinational companies’ exploitation of coastal resources.”

South Africa is one of only three African nations – along with Namibia and Seychelles – implementing marine spatial planning. This growing movement toward organised marine economies balances competing uses such as oil exploration, marine protected areas and fisheries. Earlier this year, the Department of Environmental Affairs, DEA, published a draft Marine Spatial Planning Bill, the first step toward creating marine-specific legislation.

According to government predictions, a properly managed marine economy could add more than 12.5 billion dollars to South Africa’s GDP by 2033. What part mining will play in that remains to be seen.

“Internationally the off-shore exploration for hard minerals is on the increase and it is to be expected that the exploitation of South Africa’s non-living marine resources will also increase,” the DEA’s draft framework said.

Neither the Department of Mineral Resources nor the DEA responded to repeated requests for comment.

Mark Olalde’s mining investigations are financially supported by the Fund for Investigative Journalism, the Fund for Environmental Journalism and the Pulitzer Center on Crisis Reporting. Additional support for this story was provided by #MineAlert and Code for Africa.

Landowner Lynette Ona, along with local leaders and villagers in the Panguna mine area, look to tourism as a sustainable economic alternative to large-scale mining in post-conflict Bougainville, Papua New Guinea. Credit: Catherine Wilson/IPS

By Catherine Wilson
PANGUNA, Autonomous Region of Bougainville, Papua New Guinea, Sep 7 2016 (IPS)

The Panguna copper mine, located in the mountains of Central Bougainville, an autonomous region in the southwest Pacific Island state of Papua New Guinea, has been derelict for 27 years since an armed campaign by local landowners forced its shutdown and triggered a decade-long civil war in the late 1980s.

The former Rio Tinto majority-owned extractive venture hit world headlines when the Nasioi became the world’s first indigenous people to compel a major multinational to abandon one of its most valuable investments during a bid to defend their land against environmental destruction."That is what we were fighting for: environment, land and culture." -- Lynette Ona

Today, local leaders and entrepreneurs, including former combatants, see the site playing a key role in sustainable development, but not as a functioning mine.

“Our future is very, very dangerous if we reopen the Panguna mine. Because thousands of people died, we are not going to reopen the mine. We must find a new way to build the economy,” Philip Takaung, vice president of the Panguna-based Mekamui Tribal Government, told IPS.

He and many local villagers envisage tourists visiting the enigmatic valley in the heart of the Crown Prince Ranges to stay in eco-lodges and learn of its extraordinary history.

“It is not just the mine site; families could build places to serve traditional local food for visitors. We have to build a special place where visitors can experience our local food and culture,” villager Christine Nobako added. Others spoke of the appeal of the surrounding rainforest-covered peaks to trekkers and bird watchers.

An estimated 20,000 people in Bougainville, or 10 percent of the population, lost their lives during the conflict, known as the ‘Crisis.’ Opposition by local communities to the mine, apparent from the exploration phase in the 1960s, intensified after operations began in 1972 by Australian subsidiary, Bougainville Copper Ltd, when they claimed mine tailings were destroying agricultural land and polluting nearby rivers used as sources of freshwater and fish. Hostilities quickly spread in 1989 after the company refused to meet landowners’ demands for compensation and a civil war raged until a ceasefire in 1998.

In the shell of a former mine building, IPS spoke with Takaung and Lynette Ona, local landowner and niece of Francis Ona, the late Bougainville Revolutionary Army leader. A short distance away, the vast six-kilometre-long mine pit is a silent reminder of state-corporate ambition gone wrong.

According to Ona, the remarkable story of how a group of villagers thwarted the power and zeal of a global mining company is a significant chapter in the history of the environmental movement “because that is what we were fighting for; environment, land and culture.” And, as such, she says, makes Panguna a place of considerable world interest.

Zhon Bosco Miriona, managing director of Bougainville Experience Tours, a local tourism company based in the nearby town of Arawa, which caters to about 50-100 international tourists per year, agrees.

“Panguna is one of the historical sites in Bougainville. People go up to Panguna to see for themselves the damage done and want to know more about why the Bougainville Crisis erupted,” he said.

In a recent survey of Panguna communities by Australian non-government organisation, Jubilee Australia, tourism was identified as the second most popular economic alternative to mining after horticulture and animal farming. Although realising the industry’s full potential requires challenges for local entrepreneurs, such as access to finance and skills development, being addressed.

Objection here to the return of mining is related not only to the deep scars of the violent conflict, but also the role it is believed to have had in increasing inequality. For example, of a population of about 150,000 in the 1980s, only 1,300 were employed in the mine’s workforce, while the vast majority of its profits, which peaked at 1.7 billion kina (US$527 million), were claimed by Rio Tinto and the Papua New Guinea government.

Today, post-war reconstruction and human development progress in Bougainville is very slow, while the population has doubled to around 300,000. One third of children are not in school, less than 1 percent of the population have access to electricity and the maternal mortality rate could be as high as 690 per 100,000 live births, estimates the United Nations Development Program.

People want an economy which supports equitable prosperity and long term peace and local experts see unlimited possibilities for tourism on these tropical islands which lie just south of the equator and boast outstanding natural beauty

“In terms of doing eco-tourism, Bougainville has the rawness. There are the forests, the lakes, the sea, the rivers and wetlands,” Lawrence Belleh, Director of Bougainville’s Tourism Office in the capital, Buka, told IPS.

Bougainville was also the site of battles during World War II and many relics from the presence of Australian, New Zealand, American and Japanese forces can be seen along the Numa Numa Trail, a challenging 60-kilometre trek from Bougainville Island’s east to west coasts.

“There are a lot of things that are not told about Bougainville, the historical events which happened during World War II and also the stories which the ex-combatants [during the Crisis] have, which they can tell…..we have a story to tell, we can share with you if you are coming over,” Belleh enthused.

Improving local infrastructure, such as transport and accommodation, and dispelling misperceptions of post-conflict Bougainville are priorities for the tourism office in a bid to increase visitor confidence.

“Many people would perceive Bougainville as an unsafe place to come and visit, but that was some years back. In fact, Bougainville is one of the safest places [for tourists] in Papua New Guinea. The people are very friendly, they will greet you, take you to their homes and show you around,” Belleh said.

Anna Sapur of the Hako Women's Collective leads a human rights training program for youths in Hako Constituency, North Bougainville. Credit: Catherine Wilson/IPS

By Catherine Wilson
HAKO, Buka Island, Autonomous Region of Bougainville, Papua New Guinea , Jun 13 2016 (IPS)

Finding a sense of identity and purpose, as well as employment are some of the challenges facing youths in post-conflict Bougainville, an autonomous region in eastern Papua New Guinea in the southwest Pacific Islands.

They have been labelled the ‘lost generation’ due to their risk of being marginalised after missing out on education during the Bougainville civil war (1989-1998), known locally as the ‘Crisis’.

But in Hako constituency, where an estimated 30,000 people live in villages along the north coast of Buka Island, North Bougainville, a local women’s community services organisation refuses to see the younger generation as anything other than a source of optimism and hope.

“They are our future leaders and our future generation, so we really value the youths,” Dorcas Gano, president of the Hako Women’s Collective (HWC) told IPS.“There were no schools, no teachers and no services here and we had no food to eat. I saw people killed with my own eyes and we didn’t sleep at night, we were frightened." -- Gregory Tagu, who was in fifth grade when the war broke out.

Youth comprise about 60 percent of Bougainville’s estimated population of 300,000, which has doubled since the 1990s. The women’s collective firmly believes that peace and prosperity in years to come depends on empowering young men and women in these rainforest-covered islands to cope with the challenges of today with a sense of direction.

One challenge, according to Gregory Tagu, a youth from Kohea village, is the psychological transition to a world without war.

“Nowadays, youths struggle to improve their lives and find a job because they are traumatised. During the Crisis, young people grew up with arms and knives and even today they go to school, church and walk around the village with knives,” Tagu explained.

Tens of thousands of children were affected by the decade-long conflict, which erupted after demands for compensation for environmental damage and inequity by landowners living in the vicinity of the Panguna copper mine in the mountains of central Bougainville were unmet. The mine, majority-owned by Rio Tinto, a British-Australian multinational, opened in 1969 and was operated by its Australian subsidiary, Bougainville Copper Ltd, until it was shut down in 1989 by revolutionary forces.

The conflict raged on for another eight years after the Papua New Guinea Government blockaded Bougainville in 1990 and the national armed forces and rebel groups battled for control of the region.

Many children were denied an education when schools were burnt down and teachers fled. They suffered when health services were decimated, some became child soldiers and many witnessed severe human rights abuses.

Tagu was in fifth grade when the war broke out. “There were no schools, no teachers and no services here and we had no food to eat. I saw people killed with my own eyes and we didn’t sleep at night, we were frightened,” he recalled.

Trauma is believed to contribute to what women identify as a youth sub-culture today involving alcohol, substance abuse and petty crime, which is inhibiting some to participate in positive development.

They believe that one of the building blocks to integrating youths back into a peaceful society is making them aware of their human rights.

In a village meeting house about 20-30 young men and women, aged from early teens to late thirties, gather in a circle as local singer Tasha Kabano performs a song about violence against women. Then Anna Sapur, an experienced village court magistrate, takes the floor to speak about what constitutes human rights abuses and the entitlement of men, women and children to lives free of injustice and physical violations. Domestic violence, child abuse and neglect were key topics in the vigorous debate which followed.

But social integration for this age group also depends on economic participation. Despite 15 years of peace and better access to schools, completing education is still a challenge for many. An estimated 90 percent of students leave before the end of Grade 10 with reasons including exam failure and inability to meet costs.

“There are plenty of young people who cannot read and write, so we really need to train them in adult literacy,” Elizabeth Ngosi, an HWC member from Tuhus village declared, adding that currently they don’t have access to this training.

Similar to other small Pacific Island economies, only a few people secure formal sector jobs in Bougainville while the vast majority survive in the informal economy.

At the regional level, Justin Borgia, Secretary for the Department of Community Development, said that the Autonomous Bougainville Government is keen to see a long-term approach to integrating youths through formal education and informal life skills training. District Youth Councils with government assistance have identified development priorities including economic opportunities, improving local governance and rule of law.

In Hako, women are particularly concerned for the 70 percent of early school leavers who are unemployed and in 2007 the collective conducted their first skills training program. More than 400 youths were instructed in 30 different trade and technical skills, creative visual and music art, accountancy, leadership, health, sport, law and justice and public speaking.

Two-thirds of those who participated were successful in finding employment, Gano claims.

“Some of them have work and some have started their own small businesses….Some are carpenters now and have their own small contracts building houses back in the villages,” she said.

Tuition in public speaking was of particular value to Gregory Tagu.

“I have no CV or reference, but with my public speaking skills I was able to tell people about my experience and this helped me to get work,” Tagu said. Now he works as a truck driver for a commercial business and a technical officer for the Hako Media Unit, a village-based media resource set up after an Australian non-government organisation, Pacific Black Box, provided digital media training to local youths.

Equipping young people with skills and confidence is helping to shape a new future here and further afield. HWC’s president is particularly proud that some from the village have gone on to take up youth leadership positions in other parts of Bougainville, including the current President of the Bougainville Youth Federation.

Every day the Tropical Gems can be seen taking charge of clearing and tidying civic spaces in Madang, a town on the north coast of the Papua New Guinean mainland. Credit: Catherine Wilson/IPS

By Catherine Wilson
MADANG, Papua New Guinea, Jul 20 2015 (IPS)

Zibie Wari, a former teacher and founder of the Tropical Gems grassroots youth group in the town of Madang on the north coast of Papua New Guinea, has seen the hopes of many young people for a decent future quashed by the impacts of corruption and unfulfilled promises of development.

"The way to fight back [...] is to go out and educate our fellow country men and women. Let’s not sit down and wait, let’s stand up on our two feet and make a difference.” -- Zibie Wari, a former teacher and founder of the Tropical Gems grassroots youth group
Once known as ‘the prettiest town in the South Pacific’, the most arresting sight today in this coastal urban centre of about 29,339 people is large numbers of youths idling away hours in the town’s centre, congregating under trees and sitting along pavements.

“You must have a dream, I tell them every day. Those who roam around the streets, they have no dreams in life, they have no vision. And those who do not have a vision in life are not going to make it,” Wari declared. “So, as a team, how can we help each other?”

The bottom-up Tropical Gems movement, which is now more than 3,000 members strong, develops young people as agents of change by fostering attitudes of responsibility, resilience, initiative and ultimately self-reliance.

The philosophy of the group is that, no matter how immense the challenges in people’s lives, there is a solution. But the solutions, the ideas and their implementation must start with themselves.

There is a large youth presence here with an estimated 44 percent of Madang’s provincial population of 493,906 aged below 15 years. However, the net education enrolment rate is a low 45 percent, hindered by poor rural access with only a small number subsequently finishing secondary school.

The youth bulge is also a national phenomenon and young people desperate for employment and opportunities are flooding urban centres across the country. But up to 68 percent of urban youth are unemployed and 86 percent of those in work are sustaining themselves in the informal economy, according to the National Youth Commission.

While PNG has an estimated 80,000 school leavers each year, only 10,000 will likely secure formal jobs.

The plight of this generation is in contrast to the Melanesian island state’s booming GDP growth of between six and 10 percent over the past decade driven by an economic focus on resource extraction, including logging, mining and natural gas extraction.

Yet these industries have failed to create mass or long-term employment or significantly reduce the socioeconomic struggle of many Papua New Guineans with 40 percent of the population of seven million living below the poverty line.

Nearly half the residents in Port Moresby, capital of Papua New Guinea, live in informal settlements with little access to clean water or sanitation. Credit: Catherine Wilson/IPS

Export-driven development leaving millions behind

Papua New Guinea is considered one of the fastest-growing economies in the world, but the boons of this progress are largely concentrated in the hands of government officials and private investors with little left for the masses of the country, which is today ranked 157^th out of 187 countries in terms of human development.

As the country surrenders its natural bounty to international investors – PNG has attracted the highest levels of direct foreign investment in the region, averaging more than 100 million U.S. dollars per year since 1970 – its people seem to get poorer and sicker.

According to the National Research Institute, PNG has less than one doctor and 5.3 nurses per 10,000 people. The availability of basic drugs in health clinics has fallen by 10 percent and visits from doctors dropped by 42 percent in the past decade. Despite rapid population growth, the number of patients seeking medical help per day has decreased by 19 percent.

Millions of dollars that could be used to develop crucial health infrastructure is lost to corruption. Papua New Guinea has been given a corruption score of 25/100 – where 100 indicates clean governance – in comparison to the world average of 43/100, by Transparency International.

The generation representing the country’s future has also been hit hard by the impacts of endemic corruption, particularly the deeply rooted patronage system in politics, which has undermined equality. Large-scale misappropriation of public funds, with the loss of half the government’s development budget of 7.6 billion kina (2.8 billion dollars) from 2009-11 due to mismanagement, has impeded services and development.

“The [political] leaders are very busy [engaging] in corruption, while the future leaders of this country are left to fend for themselves. Many of these young people have been pushed out by the system. At the end of the day, there is a reason why homebrew alcohol is being brewed and why violence is going on,” Wari told IPS.

“But the way to fight back corruption is to go out and educate our fellow country men and women. Let’s not sit down and wait, let’s stand up on our two feet and make a difference.”

This is no easy task in a country where 2.8 million people live below the poverty line, where maternal mortality is 711 deaths per 100,000 live births, literacy is just 63 percent and only 19 percent of people have access to sanitation.

But the Tropical Gems are empowering themselves with knowledge about the political and economic forces, such as globalisation and competition for resources, which are impacting their lives. And they are returning to core social and cultural values for a sense of leadership and direction.

“We have gone astray because of the rapid changes that have happened in our country and because we were not prepared for them. When these influences come in, they divert us from what we are supposed to do. So, now in Tropical Gems, we do the talking,” Wari said.

For the Tropical Gems, leadership begins with rejecting passivity and taking responsibility and initiative for the betterment of themselves, others and the wider community. Credit: Catherine Wilson/IPS

Away from dependency, towards self-reliance

Their first step has been to reject the dependency syndrome and temptation to wait for others, whether in the state or private sector, to deliver the world they desire.

Every day, dozens of ‘leaders’, as the group’s members are known, spend half a day out on the streets of Madang working, without payment, to clear the streets and coastline areas of litter and tidy up public gardens and spaces. Their visibility to the town’s population, including youth who remain in limbo, is that the future they want starts with them.

And there is no shortage of people who want to be a part of this grassroots movement. While the group was formed by Wari in Madang in 2013 with less than 300 members, it has since grown to more than 3,000, ranging from teenagers to people in their forties, from provinces around the country, including the northern Sepik, mountainous highlands and far flung Manus Island.

Many of those who have joined Tropical Gems have endured personal hardships and social exclusion, whether due to poverty, loss of their parents or missing out on the opportunity to finish their education.

“My life was really hard before I joined Tropical Gems, but now it has changed,” 30-year-old Sepi Luke told IPS. He now feels in control of his life and has hope for the future.

Lisa Lagei of the Madang Country Women’s Association supports the group’s endeavours and recognises the positive impact they can have on the wider community.

“What they are doing, taking a lead is good. It is important to take the initiative. We can’t wait for the government, we have to do things for ourselves,” she said.

Lagei has observed many issues facing youth in Madang, ranging from high unemployment and crime to an increase in young girls turning to prostitution for money and a high secondary education dropout rate primarily due to families being unable to afford school fees. While these problems are mainly visible in urban areas, they are increasingly prevalent in rural communities as well, she added.

Wari believes there is a gap between the formal education system and the real world, and many young people in Papua New Guinea are seeking ways to cope with the complex forces that are shaping their lives.

Customary landowners in Papua New Guinea, a rainforest nation in the Southwest Pacific, are suffering the environmental and social impacts of illegal logging. Credit: Catherine Wilson/IPS

Tackling the toughest issues

In March the group was visited by members of the civil society activist organisation, Act Now PNG, which conducted awareness sessions about land issues, such as how land grabbing occurs and corruption associated with the country’s Special Agriculture and Business Leases (SABLs).

Land grabbing has led to the loss of 5.5 million hectares – or 12 percent of the country’s land area – to foreign investors, many of which are engaged in logging, rather than agricultural projects of benefit to local communities.

Papua New Guinea, home to the world’s third largest tropical rainforest, has a forest cover of an estimated 29 million hectares, but the rapid growth of its export-driven economy has made it the second largest exporter of tropical timber after Malaysia.

The California-based Oakland Institute estimates that PNG exports approximately three million cubic metres of logs every year, primarily to China.

The United Nations Food and Agriculture Organisation (FAO) predicts that 83 percent of the country’s commercially viable forests will be lost or degraded by 2021 due to commercial logging, mining and land clearance for oil palm plantations.

“Within ten years nearly all accessible forests will be logged out and at the root of this problem is endemic and systematic corruption,” a spokesperson for Act Now PNG told IPS last December.

This could spell disaster for the roughly 85 percent of Papua New Guinea’s population who live in rural areas, and are reliant on forests for their survival.

Consider the impacts of environmental devastation and logging-related violence in Pomio, one of the least developed districts in East New Britain – an island province off the northeast coast of the Papua New Guinean mainland – where there is a lack of health services, decent roads, water and sanitation.

Life expectancy here is a miserable 45-50 years and the infant mortality rate of 61 per 1,000 live births is significantly higher than the national rate of 47.

How to address these issues are huge questions, but the Tropical Gems do not shy away from asking them.

“We discourage, in our awareness [campaigns], the selling of land. Our objectives are to conserve the environment, to value our traditional way of living,” Wari said.

Knowledge sharing also extends to livelihood skills and the group’s leaders who know how to weave, bake or grow crops hold training sessions for the benefit of others. Some have started their own enterprises.

The Tropical Gems is a grassroots youth initiative that emerged in the coastal town of Madang in Papua New Guinea in 2013. Credit: Catherine Wilson/IPS

Barbara grows and sells tomatoes at the town’s market, for example, and Lynette, from the nearby village of Maiwara, has a small business raising and selling chickens.

One of the next steps for Tropical Gems is to extend the reach of its activities into rural areas to help people see the sustainable development potential in their local setting, rather than migrating to urban centres.

Indeed, rapid urbanisation has resulted in grim living conditions for many city-dwellers, with 45 percent of those who reside in the capital, Port Moresby, living in informal settlements that lack proper water and sanitation facilities.

In Eight Mile Settlement, located on the outskirts of Port Moresby, 15,000 residents drink contaminated water from broken taps. Water-borne diseases are the leading cause of hospital deaths in Papua New Guinea.

But tackling the particular issue or urbanisation may require more resources than the group currently has, even though they have sustained their projects to date without any external funding.

“The fees that individuals pay to join are used to sustain Tropical Gems and we help ourselves,” Wari explained.

In the meantime, word about the unique initiative has spread to the capital. This year, Wari and the Gems have been invited to give a presentation about their work to the Waigani Seminar, a national forum to discuss progress toward the country’s ‘Vision 2050’ aspirations, to be co-hosted by the government and University of Papua New Guinea in Port Moresby from 19-21 August.

Papua New Guinea will face many hurdles in the coming decade, particularly environmental challenges as the country faces up to rising sea levels and the other impacts of climate change. Initiatives like the Tropic Gems are laying the groundwork for a far more resilient society than its political leaders have thus far created.

Edited by Kanya D’Almeida

By Savio Carvalho
LONDON, Jul 16 2015 (IPS)

Corporate lobbyists are unusual guests at development meetings, but when the United Nations held its Financing for Development conference in Addis Ababa this week to decide who pays for its new “Sustainable Development Goals”, some governments laid out the red carpet for the private sector.

Photo Courtesy of Amnesty International

Unfortunately, the conference failed to agree on any mechanism for making sure the role of companies in development is kept transparent and accountable.

Some see giving companies a bigger role in development as a simple win-win. Governments get access to financing to take the pressure off aid budgets and come up with the 2.5 trillion dollars needed to respond to poverty and climate change, while meeting the housing, health, education and infrastructure targets in the post-2015 agenda.

On the other hand, companies get a potential say in policy making and access to juicy public contracts.

But before governments allow companies to shoulder significant responsibility for fighting poverty, climate change and other global challenges, they will have to convince critics who warn that they are putting the fox in charge of the henhouse.

While getting companies involved in development has the potential to provide important sources of funding to improve lives, experience equally shows that when companies are not held to account, people and communities can be seriously harmed. If private sector involvement in development is going to pay off for the people who need it and not just corporate shareholders, states have to leave impunity at the door.

Increasing the role of the private sector in the delivery of crucial public services such as water, education and health is fraught with risk. On July 2, the U.N. Human Rights Council warned that without proper regulation the privatisation of education could put the right to education at risk for countless children, especially if it means those children who cannot afford to pay lose out on quality education.

Around the world, Amnesty International has documented too many cases of marginalised communities waiting to see justice done, sometimes for decades, for human rights abuses perpetrated after a multinational company rolled into town. States who seek the involvement of the private sector in advancing development goals without putting effective safeguards in place, forget these cases at their peril.

The more than 570,000 victims of the 1984 Bhopal toxic gas leak, India’s worst industrial disaster, are still waiting for justice more than 30 years later. The firm responsible, Union Carbide, is now owned by U.S.-based Dow Chemical. A Bhopal court is pursuing criminal charges against Dow but the company has failed to even show up to multiple hearings over the last year. Meanwhile, survivors have tried and failed to seek justice in both India and the U.S.

While Union Carbide paid some compensation to those affected under a 1989 settlement agreement with the Indian government, it was wholly inadequate to cover the harm caused and there were serious issues with the way it was paid out to victims. At the time, the Indian government lacked the leverage to effectively hold a powerful global company to account.

Foreign companies operating in countries that are rich in natural resources and poor in regulation can reap huge profits at the expense of vulnerable people.

Earlier this year Amnesty International warned that Canadian and Chinese mining giants have profited from, and in some cases colluded, with  human rights abuses by the Myanmar authorities to exploit one of the country’s most important copper mines, with thousands of people being illegally driven off their lands, serious environmental risks going unchecked, and peaceful protest brutally suppressed.

Far from investigating the abuses, one multinational company involved used an opaque trust fund in the British Virgin Islands to divest its investment, in a manner which possibly breached economic sanctions applicable at the time. Reducing their exposure to the problem, rather than fixing it, has often been the mantra of companies faced by scandalous abuses.

For residents of Niger Delta, the legacy of half a century of oil production in Nigeria is the devastation of their farming and fishing lands. Today the oil spills continue unabated. In Shell’s operations alone, there were 204 spills in 2014. Shell blames sabotage and theft, but old pipelines and badly maintained infrastructure are a major cause of pollution.

This year one local community in Bodo has finally won 80 million dollars in compensation from Shell for the impacts of a massive spill, but only after a lengthy court battle in the UK and years of false claims by the company.

These are cautionary tales world leaders should consider as they plan to entrust the private sector with responsibility for funding and carrying out development projects. In all these cases, corporate political and financial clout created barriers to local communities accessing justice and accountability.

Governments have watched corporate political power grow for decades, often doing their best to get out of its way instead of properly regulating it to ensure that human rights are not violated.

Corporate lobbyists, meanwhile, have done everything possible to ensure that the important international standards addressing these risks remain entirely voluntary.  Voluntary codes of conduct and standards that have no enforcement mechanism ultimately lack the teeth to really change corporate behaviour, and when abuses occur, they can leave victims with little or no hope of remedy.

If private sector involvement in development is going to pay off for the people who need it and not just corporate shareholders, states have to leave impunity at the door. Companies that want to make a profit through work on sustainable development must be required to show they have a clean track record when it comes to human rights.

They must demonstrate that they have internal systems that ensure they do not cause human rights abuses. They must disclose information to communities about any local operations that impact them, as well as any payments they make to the authorities.

Crucially, governments must be ready to hold companies to account when abuses happen. The failure of all but five countries to meet the U.N.’s official aid targets is a crying shame, but if filling the gap by giving the private sector free rein leads to human rights abuses in already vulnerable communities, it will only rub salt in the wounds that sustainable development is supposed to heal.

Edited by Kitty Stapp

Excerpt:

Mangrove forests, like this one in western Sri Lanka, can store up to 1,000 tonnes of carbon per hectare in their biomass, yet they are being felled at three to five times the rate of other forests. Credit: Kanya D’Almeida/IPS

By Kanya D'Almeida
UNITED NATIONS, Jul 6 2015 (IPS)

By 2050, we will be a world of nine billion people. Not only does this mean there’ll be two million more mouths to feed than there are at present, it also means these mouths will be consuming more – in the next 20 years, for instance, an estimated three billion people will enter the middle class, in addition to the 1.8 billion estimated to be within that income bracket today.

These changes are going to put unprecedented pressure on the world’s natural resources, according to a new report by the United Nations Environment Programme (UNEP)’s International Resource Panel (IRP).

Entitled ‘Policy Coherence of the Sustainable Development Goals: A Natural Resource Perspective’, the report warns that maintaining and restoring healthy ecosystems will be critical for the successful realisation of the U.N.’s post-2015 development agenda.

Unless the new development blueprint is centered on protecting and respecting the earth’s limited bounty, the goals of poverty eradication and ensuring decent lives for current and future generations will fall by the wayside, experts predict.

For instance, IRP studies have shown that annual global extraction increased “by a factor of eight in the 20^th century” from seven billion tonnes of material in 1900 to 68 billion tonnes of resources by 2009.

Based on current trends, resource use and extraction could hit 140 billion tonnes by 2050 – three times what was extracted in the year 2000, according to UNEP data.

“Due to declining ore grades, depending on the material concerned, about three times as much material needs to be moved today for the same ore extraction as a century ago, with concomitant increases in land disruption, groundwater implications and energy use,” UNEP said in a press release on Jul. 6.

Meanwhile, pressures on biotic resources are also on the rise, with 20 percent of cultivated land, 30 percent of the world’s forests and 10 percent of its grasslands being degraded at a rate that far outstrips the ability of such earth systems to replenish themselves.

Deterioration of ecosystems also threatens to worsen the impacts of climate change, contribute to water scarcity and exacerbate world hunger, with environmental experts fearing that 25 percent of total global food production could be lost by 2050 as a result of converging land and resource issues.

“The core challenge of achieving the SDGs will be to lift a further one billion people out of absolute poverty and address inequalities, while meeting the resource needs – in terms of energy, land, water, food and material supply – of an estimated eight billion people in 2030,” U.N. Under-Secretary-General and UNEP Executive Director Achim Steiner said Monday.

“The fulfillment of the SDGs in word and spirit will require fundamental shifts in the manner with which humanity views the natural environment in relation to human development,” he added.

Representing over 30 renowned experts and scientists, and as many national governments, the IRP today called for the “prudent management and use of natural resources, given that several Goals are inherently dependent on the achievement of higher resource productivity, ecosystem restoration and resource conservation”.

The report also urged policy makers to introduce practices based on a ‘circular economy’ approach, whereby reusing, recycling and remanufacturing products and other materials reduces waste by “decoupling” natural resource use from economic progress.

While the SDGs represent a bold and wide-reaching framework for ending some of the world’s most pressing problems – among them hunger and extreme poverty – avoiding counter-productive results will depend on a “commitment to maintaining the integrity of the Earth’s systems while addressing the resource demands driven by individual goals,” UNEP experts cautioned.

As the world’s population increases, and more people climb into the ranks of the middle class (defined by increased income and a corresponding rise in consumption), it will become crucial for individuals to adopt consumption patterns – and governments and corporations to adopt production systems – that contribute to human well-being “without putting unsustainable pressures on the environment and natural resources”, the report said.

Edited by Kitty Stapp

Artisanal diamond miners at work in the alluvial diamond mines around the eastern town of Koidu, Sierra Leone. Credit: Tommy Trenchard/IPS

By Jomo Kwame Sundaram and Rudi von Arnim
ROME, Jun 23 2015 (IPS)

After the turn of the century, growth in sub-Saharan Africa (SSA) picked up again after a quarter century of near stagnation for most, mainly due to increased world demand for minerals and other natural resources.

The region became second only to East Asia in recovering from the global slowdown following the 2008-2009 financial crisis.Thanks to the failure of development over the preceding quarter century, SSA was the only region not to make any progress in reducing the population share in poverty, with the number of poor people actually rising significantly.

During the decade 2003-2013, growth was faster, averaging 2.6 percent per capita annually. The SSA growth acceleration of the past decade fueled hopes that growth on the continent had finally begun to accelerate and catch up.

Annual SSA per capita real GDP growth had averaged a respectable two percent in the 1960s, but had slowed down from the late 1970s. Over the next two decades, real per capita income for sub-Saharan countries shrank by about three quarters of a percentage point annually on average.

While SSA growth resumed in the last decade, reliance on natural resource extraction has compromised its developmental impact. Such economic activity, especially in mining, has few linkages to the rest of the national economy, thus limiting its growth and employment creation impacts as well.

As its economic performance has closely followed the vagaries of the global commodity price cycle, SSA growth in the last decade was largely driven by the minerals boom on the continent.

But the high commodity prices of the past decade have been reversed by the spreading global economic slowdown and the Saudi decision to drastically reduce oil prices.

However, natural resource extraction does not have the same potential to accelerate development as manufacturing. No country has successfully developed without substantially increasing manufacturing or high-end services. Sub-Saharan Africa has not done well on this score in recent decades.

While the manufacturing share of GDP for all developing countries has risen over 23 percent, it has fallen in SSA to 8 percent from 12 percent in the 1980s. Meanwhile, the primary commodities’ share of total SSA exports reached almost 90 percent in the past decade.

Premature and inappropriate trade liberalisation has damaged SSA’s limited export capacities. The region’s share of world merchandise exports fell from 5 percent in the 1950s to 1.8 percent during 2000-2010. Meanwhile, its share of world manufactured exports stands at a paltry one-fifth of one percentage point.

Trade liberalisation has also undermined the fiscal capacities of many governments in poor countries, with dire consequences for development and social progress.

Since many transactions in developing countries are informal, and hence untaxed, poor developing country governments have traditionally relied on trade tariffs to raise revenue.

Thus, trade liberalisation has reduced their ability to raise revenue, without providing alternate sources. As a consequence, the share of government spending in GDP has fallen from an average of around 16 percent during 1980-1999 to 13 percent during recent years.

Thus, neither trade nor financial liberalisation has helped accelerate economic growth in SSA. Growth requires investments, but investment as a share of SSA GDP has fallen in recent decades, to only 17 percent before the crisis.

External financial liberalisation from the 1980s was supposed to draw in foreign resources, but portfolio investments in SSA are negligible, and more crucially, ill-suited to facilitate sustainable growth.

Instead, there have been net outflows of capital from the world’s poorest region to international financial centres, including tax havens.

Appropriately targeted ‘greenfield’ foreign direct investment (FDI) has more potential to make a positive impact. However, Africa’s share of FDI to all developing economies has fallen from 21 percent in the 1970s to only 11 percent in recent years, or from 5 percent to 3 percent of global FDI.

To make matters worse, FDI in SSA overwhelmingly involves natural resource extraction, with few developmental spillovers from such investments.

According to World Bank estimates, the share of the SSA population living in extreme poverty rose from 50 percent in 1980 to 58 percent in 1998 before falling back to 50 percent in 2005.

Thanks to the failure of development over the preceding quarter century, SSA was the only region not to make any progress in reducing the population share in poverty, with the number of poor people actually rising significantly.

A decade ago, in 2005, the G8 summit at Gleneagles committed to increasing Official Development Assistance (ODA) by 50 billion dollars by 2010. The Gleneagles summit also promised to increase ODA to Africa by 25 billion dollars to 64 billion. Actual delivery fell short by 18 billion dollars, or by 72 percent!

In 2012 dollars, annual ODA to SSA hovered around 50 billion during 2006-2013, up from about 42 billion in 2005, but well short of what was promised. G8 aid to Africa falls well short of promised levels, even below the contributions from the small Nordic countries.

Not surprisingly, the recent G7 summit made no reference to the Gleneagles promises. Instead, it focused on addressing climate change, and it seems likely that climate finance conditionalities will undermine the principle of common, but differentiated responsibilities.

The struggle leading to the Conference of Parties in Paris will be to ensure that climate finance will be additional to the longstanding ODA promises, and will promote climate justice and development.

Edited by Kitty Stapp

Excerpt:

Workers at Jamaica's Bodles Agricultural Station prepare fruit tree seedlings for distribution. Credit: Zadie Neufville/IPS

By Zadie Neufville
KINGSTON, Jun 4 2015 (IPS)

For Jamaica, planting more trees as a way to build resilience is one of the highest priorities of the government’s climate change action plan. So when Cockpit Country residents woke up to bulldozers in the protected area, they rallied to get answers from the authorities.

On May 18, Noranda Bauxite Limited acted on 2004 mining leases and moved its heavy equipment into the outer areas of the Cockpit Country, ignoring unresolved boundary issues. Their actions reignited a simmering row between stakeholders and government over demarcation and protection of the biologically diverse area.Bauxite mining is said to be the single largest cause of deforestation on the island.

Whilst the company denies that it has begun mining, its officials admit to prospecting. Noranda’s actions however, raised suspicions that government had reneged on a promise made in 2006 when several prospecting leases issued to Alumina Partners were revoked. Back then, authorities had promised residents that the Cockpit Country would be off-limits to bauxite mining.

Junior Minister for Mining and Energy Julian Robinson has reiterated his government’s commitment to preserving the area, but many continue to be wary.

Michael Schwartz, director of the Windsor Research Station, is fearful that government will seek to “placate” the people with “a token boundary” which defines the Cockpit Country to an area “where there is no bauxite to be mined”.

“My concern is that GoJ [the government] seems to be completely ignoring the Public Consultation Report, which they commissioned in 2013, and is going to come up with its own boundary,” he said in an email response to IPS.

Schwartz’s concern seems valid. After all bauxite was, until 2008 the island’s second largest earner of foreign exchange. That year bauxite earned 1.37 billion dollars and accounted for 55 per cent of Jamaica’s total merchandise exports and traditionally contributed around five to six per cent of Gross Domestic Product (GDP).

Just prior to the economic fallout and closure of mining operations in 2009, the sector was the third largest foreign exchange earner.

Bauxite mining is also said to be the single largest cause of deforestation on the island. Not only are large areas of forests destroyed to extract the ore, the cutting of haul and access roads opens the prime forests to further threats from loggers, yam stick traders and coal burners.

Forest clearing is identified as one of the biggest threats to the island’s biodiversity and the remaining forests. The Fourth Assessment Report of the Intergovernmental Panel on Climate Change (2007) also identifies forest clearing as one of the top contributors to climate variation.

Looking westward – Noranda Bauxite’s equipment cuts access roads for prospecting. Credit: Courtesy of Michael Schwartz

Minister of Environment and Climate Change Robert Pickersgill confirms that changes to the forest cover have  “significant implications” for Jamaica, given that is “highly dependent” on its environmental resources.

At a press conference to announce the findings of the most recent forest assessment surveys on Mar. 10, the minister said:  “The open dry forests that now stand as bare lands have increased the country’s vulnerability to the impacts of climate change and increased our risk of desertification. The loss of our broadleaf forests has reduced the forests’ capacity to provide us with ecosystem services such as water and clean air.”

“Cockpit Country is in relatively good shape today because of its topography, it has conserved itself, so to speak,” Schwartz said, pointing out that whilst farmers have been encroaching on the area for centuries, the difficult terrain had made access difficult thereby limiting the impact of their activities.

Depending on which of the three proposed boundaries is used, the Cockpit Country is estimated to cover between 820 and 1099 square kilometres (between 510 and 683 sq. miles). The core boundary – primarily forest reserves and crown lands – totals just over 56,000 hectares (138,379 acres), a transition boundary of just over 80,000 hectares (197, 684 acres) and the outer boundary of 116,218 hectares (287,181 acres).

The outer boundary proposed during the public consultations that the University of the West Indies conducted will more than double the reserves and is the preferred option. It seems that any other would not go down well with the stakeholders and according to Schwartz: “This would show a willful disregard of the public stakeholders.”

Aside from a rich biological diversity that supports the largest number of globally threatened species in the Caribbean region, Jamaica’s State of the Environment Report 2010 described the Cockpit Country as “the largest remaining primary forest” on the island. The area also supplies fresh water for about 40 per cent of islanders and recharges the aquifers in three major agricultural areas.

In what the Forestry Department describes as its most comprehensive analysis of forest cover change to date, a 2013 survey shows an overall increase in forests and a decline in the amount of high quality forests due to the destruction of wetlands and previously undisturbed areas. More than 4,000 hectares (about 10,000 acres) of mined-out lands have also been restored.

“We have gained new low-quality forests but lost high-quality closed and disturbed broadleaf forests. We also lost swamp forests and dry forests,” Conservator of Forests Marilyn Headley told IPS in an email.

The loss of the swamp forests, Pickersgill says, “poses serious risks to our tourism industry, as well as the success of our disaster management strategies and destroys the habitat for many of our essential wetland species.”

In addition to improved assessments, the Forestry Department is now updating the National Forest Management and Conservation Plan that aims to build on and outline additional strategies to arrest the loss of quality forests, promote sustainable use and regulate saw mills.

The Department continues to work with Local Forest Management Committees in the Cockpit Country and other areas across the island to replant and reduce the impact of the local communities on their forests. Schwartz is confident that ongoing sensitisation and community actions will help to preserve the areas if bauxite mining is excluded.

However, with an estimated one billion tonnes of bauxite remaining, a sluggish economy and most of the country’s earnings going to debt repayment, stakeholders are demanding a resolution of the boundaries sooner rather than later. Many believe that potential earnings from bauxite could tip the balance between preservation and mining of the prized ecological area.

“If mining were allowed, how would you explain how it’s alright for the big man to destroy large areas of forest, but it’s not okay for little man to cut a tree to improve his life?” the researcher asks.

Edited by Kitty Stapp

The Asian Development Bank (ADB) has invested 1.2 billion dollars in Afghanistan for roads, railways, and airport projects. Credit: Giuliano Battiston/IPS

By Kanya D'Almeida
UNITED NATIONS, Mar 27 2015 (IPS)

First the centre of the silk route, then the epicenter of bloody conflicts, Afghanistan’s history can be charted through many diverse chapters, the most recent of which opened with the election of President Ashraf Ghani in September 2014.

Having inherited a country pockmarked with the scars of over a decade of occupation by U.S. troops – including one million unemployed youth and a flourishing opium trade – the former finance minister has entered the ring at a low point for his country.

“Our goal is to become a transit country for transport, power transmissions, gas pipelines and fiber optics.” -- Ashraf Ghani, president of Afghanistan
Afghanistan ranks near the bottom of Transparency International’s most recent Corruption Perceptions Index (CPI), tailed only by North Korea, Somalia and Sudan.

A full 36 percent of its population of 30.5 million people lives in poverty, while spillover pressures from war-torn neighbours like Pakistan threaten to plunge this land-locked nation back into the throes of religious extremism.

But under this sheen of distress, the seeds of Afghanistan’s future are slumbering: vast metal and mineral deposits, ample water resources and huge tracts of farmland have investors casting keen eyes from all directions.

Citing an internal Pentagon memo in 2010, the New York Times referred to Afghanistan as the “Saudi Arabia of Lithium”, an essential ingredient in the production of batteries and related goods.

The country is poised to become the world’s largest producer of copper and iron in the next decade. According to some estimates, untapped mineral reserves could amount to about a trillion dollars.

Perhaps more importantly Afghanistan’s landmass represents prime geopolitical real estate, acting as the gateway between Asia and Europe. As the government begins the slow process of re-building a nation from the scraps of war, it is looking first and foremost to its immediate neighbours, for the hand of friendship and mutual economic benefit.

Regional integration 

Speaking of his development plans at the New York-based Council on Foreign Relations (CFR) Thursday, Ghani emphasised the role that the Caucasus, as well as Pakistan and China, can play in the country’s transformation.

“In the next 25 years, Asia is going to become the world’s largest continental economy,” Ghani stressed. “What happened in the U.S. in 1869 when the continental railroad was integrated is very likely to happen in Asia in the next 25 years. Without Afghanistan, Central Asia, South Asia, East Asia and West Asia will not be connected.

“Our goal is to become a transit country,” he said, “for transport, power transmissions, gas pipelines and fiber optics.”

Ghani added that the bulk of what Afghanistan hopes to produce in the coming decade would be heavy stuff, requiring a robust rail network in order to create economies of scale.

“In three years, we hope to be reaching Europe within five days. So the Caspian is really becoming central to our economy […] In three years, we could have 70 percent of our imports and exports via the Caspian,” he claimed.

Roads, too, will be vital to the country’s revival, and here the Asian Development Bank (ADB) has already begun laying the groundwork. Just last month the financial institution and the Afghan government signed grant agreements worth 130 million dollars, “[To] finance a new road link that will open up an east-west trade corridor with Tajikistan and beyond.”

Thomas Panella, ADB’s country director for Afghanistan, told IPS, “ADB-funded projects in transport and energy infrastructure promote regional economic cooperation through increased connectivity. To date under the Central Asia Regional Economic Cooperation (CAREC) programme, 2.6 billion dollars have been invested in transport, trade, and energy projects, of which 15 are ongoing and 10 have been completed.

“In the transport sector,” he added, “six projects are ongoing and eight projects have been completed, including the 75-km railway project connecting Hairatan bordering Uzbekistan and Mazar-e-Sharif of Afghanistan.”

Afghanistan’s transport sector accounted for 22 percent of the nation’s gross domestic product (GDP) during the U.S. occupation, a contribution driven primarily by the presence of foreign troops.

Now the sector has slumped, but financial assistance from the likes of the ADB is likely to set it back on track. At last count, on Dec. 31, 2013, the development bank had sunk 1.9 billion dollars into efforts to construct or upgrade some 1,500 km of regional and national roads, and a further 31 million to revamp four regional airports in Afghanistan, which have since seen a two-fold increase in usage.

In total, the ADB has approved 3.9 billion dollars in loans, grants, and technical assistance for Afghanistan since 2002. Panella also said the bank allocated 335.18 million dollars in Asian Development Fund (ADF) resources to Afghanistan for 2014, and 167.59 million dollars annually for 2015 and 2016.

China too has stepped up to the plate – having already acquired a stake in one of the country’s most critical copper mines and invested in the oil sector – promising 330 million dollars in aid and grants, which Ghani said he intends to use exclusively to beef up infrastructure and “improve feasibility.”

Both India and China, the former through private companies and the latter through state-owned corporations, have made “significant” contributions to the fledgling economy, Ghani said, adding that the Gulf states and Azerbaijan also form part of the ‘consortium approach’ that he has adopted as Afghanistan’s roadmap out of the doldrums.

‘A very neoliberal idea’

But in an environment that until very recently could only be described as a war economy, with a poor track record of sharing wealth equally – be it aid, or private contracts – the road through the forest of extractive initiatives and mega-infrastructure projects promises to be a bumpy one.

According to Anand Gopal, an expert on Afghan politics and award-winning author of ‘No Good Men Among the Living’, “There is a widespread notion that only a very powerful fraction of the local elite and international community benefitted from the [flow] of foreign aid.”

“If you go to look at schools,” he told IPS, “or into clinics that were funded by the international community, you can see these institutions are in a state of disrepair, you can see that local warlords have taken a cut, have even been empowered by this aid, which helped them build a base of support.”

Although the aid flow has now dried up, the system that allowed it to be siphoned off to line the pockets of strongmen and political elites will not be easily dismantled.

“The mindset here is not oriented towards communities, it’s oriented towards development of private industries and private contractors,” Gopal stated.

“When you have a state that is unable to raise its own revenue and is utterly reliant on foreign aid to make these projects viable […] the straightforward thing to do would be to nationalise natural resources and use them as a base of revenue to develop the economy, the expertise of local communities and the endogenous ability of the Afghan state to survive.”

Instead what happens is that this tremendous potential falls off into hands of contracts to the Chinese and others. “It’s a very neoliberal idea,” he added, “to privatise everything and hope that the benefits will trickle down.

“But as we’ve seen all over the world, it doesn’t trickle down. In fact, the people who are supposed to be helped aren’t the ones to get help and a lot of other people get enriched in the process.”

Indeed, attempts to stimulate growth and close the wealth gap by pouring money into the extractives sector or large-scale development – particularly in formerly conflict-ridden countries – has had disastrous consequences worldwide, from Papua New Guinea, to Colombia, to Chad.

Rather than reducing poverty and empowering local communities, mining and infrastructure projects have impoverished indigenous people, fueled gender-based violence, and paved the way for the concentration of wealth in fewer and fewer hands.

A far more meaningful approach, Gopal suggested, would be to directly fund local communities in ways that don’t immediately give rise to an army of middlemen.

It remains to be seen how the country’s plans to shake off the cloak of foreign occupation and decades of instability will unfold. But it is clear that Afghanistan is fast becoming the new playground – and possibly the next battleground – of emerging players in the global economy.

Edited by Kitty Stapp

The road to Baradares in north central Haiti. The aim of the new draft mining law appears to be a massive expansion of Haiti’s mining sector. Credit: Lee Cohen/cc by 2.0

By Carey L. Biron
WASHINGTON, Jan 13 2015 (IPS)

With Haiti’s Parliament having dissolved on Tuesday, civil society groups are worried that the Haitian president may move to unilaterally put in place a contentious revision to the country’s decades-old mining law.

Starting in 2013, that draft was written with technical assistance from the World Bank. Last week, a half-dozen Haitian groups filed a formal appeal with the bank’s complaints office, expressing concern that the legislation had been crafted without the public consultation often required under the Washington-based development funder’s own policies.“The process has been very opaque, with a small group of experts from the World Bank and Haitian government officials drafting this law.” -- Sarah Singh

The aim of the new draft mining law appears to be a massive expansion of Haiti’s mining sector, paving the way for the entry of foreign companies already interested in the country’s significant gold and other deposits.

“Community leaders … are encouraging communities to think critically about ‘development’, and to not simply accept projects defined by outsiders,” Ellie Happel, an attorney in Port-au-Prince who has been involved in the complaint, told IPS.

“These projects often fail. And, in the case with gold mining, residents learn that these projects may threaten their very way of life.”

Haiti’s extractives permitting process is currently extensive and bureaucratic. Yet the new revisions would bypass parliamentary oversight altogether, halting even a requirement that agreement terms be made public, according to a draft leaked in July.

Critics worry that this streamlining, coupled with the Haitian government’s weakness in ensuring oversight, could result in social and environmental problems, particularly damaging to a largely agrarian economy. Further, there is question as to whether exploitation of this lucrative minerals wealth would benefit the country’s vast impoverished population.

“The World Bank’s involvement in developing the Draft Mining Law lends the law credibility, which is likely to encourage investment in the Haitian mining sector,” the complaint, filed with the bank’s Inspection Panel on Wednesday, states.

“[T]his increased investment in the mining sector will result in … contamination of vital waterways, impacts on the agriculture sector, and involuntary displacement of communities. Complainants are also concerned about the exclusion of Haitian people from the law reform process, particularly when contrasted with the reported regular participation of the private sector in drafting the new law.”

An opaque process

The complaint comes five years after a devastating earthquake struck Haiti, and as political instability is threatening reconstruction and development progress made in that catastrophe’s aftermath. Elections have been repeatedly put off for more than two years, and by Tuesday so many members of Parliament are slated to have finished their terms that the body would lack a quorum.

On Sunday Haitian President Michel Martelly indicated that a deal might be near. But the leftist opposition was reportedly not part of this agreement, and has repeatedly warned that the president is planning to rule by decree.

The Inspection Panel complaint, filed by six civil society groups operating under the umbrella Kolektif Jistis Min (the Justice in Mining Collective), contextualises its concerns against this backdrop of instability. “[T]he Haitian government may be poised to adopt the Draft Mining Law by decree, outside the democratic process,” it states.

Even if the political crisis is dealt with soon, concerns with the legislation’s drafting process will remain.

The Justice in Mining Collective, which represents around 50,000 Haitians, drew up the complaint after the draft mining law was leaked in July. No formal copy of the legislation has been made public, nor has the French-language draft law been translated into Haitian Creole, the most commonly spoken language.

“The process has been very opaque, with a small group of experts from the World Bank and Haitian government officials drafting this law,” Sarah Singh, the director of strategic support with Accountability Counsel, a legal advocacy group that consulted on the complaint and is representing some Haitian communities, told IPS.

“They’ve had two meetings that, to my knowledge, were invite-only and held in French, at which the majority of attendees were private investors and some big NGOs. Yet the bank’s response to complaints of this lack of consultation has been to say this is the government’s responsibility.”

The Justice in Mining Collective is suggesting that this lack of consultation runs counter to social and environmental guidelines that undergird all World Bank investments. These policies would also call for a broad environmental assessment across the sector, something local civil society is now demanding – to be followed by a major public debate around the assessment’s findings and the potential role large-scale mining could play in Haiti’s development.

Yet the World Bank is not actually investing in the Haitian mining sector, and it is not clear that the institution’s technical assistance is required to conform to the safeguards policies. In a November letter, the bank noted that its engagement on the Haitian mining law has been confined to sharing international best practices.

Yet Singh says she and others believe the safeguards do still apply, particularly given the scope of the new legislation’s impact.

“This will change the entire legal regime,” she says. “The idea that bank could do that and not have the safeguards apply seems hugely problematic.”

A World Bank spokesperson did confirm to IPS that the Inspection Panel has received the Haitian complaint. If the panel registers the request, she said, the bank’s management would have around a month to submit a response, following which the bank’s board would decide whether the complaint should be investigated.

Parliamentary moratorium

Certainly sensitivities around the Haitian extractives sector have increased in recent years.

Minerals prospecting in Haiti has expanded significantly over the past half-decade, though no company has yet moved beyond exploration. In 2012, when the government approved its first full mining permit in years, the Parliament balked, issuing a non-binding moratorium on all extraction until a sector-wide assessment could take place.

Meanwhile, Haitians have been looking across the border at some of the mining-related problems experienced in the Dominican Republic, including water pollution. Civil society groups have also been reaching out to other countries in the Global South, trying to understand the experiences of other communities around large-scale extractives operations.

Current views are also being informed by decades of historical experience in Haiti, as well. Since the country’s independence in the early 19th century, several foreign companies have engaged many years of gold mining.

That was a “negative, even catastrophic, experience,” according to a statement from the Justice in Mining Collective released following the leak of the draft mining law in July.

“Mining exploitation has never contributed to the development of Haiti. To the contrary, the history of gold exploitation is one marked by blood and suffering since the beginning,” the statement warned.

“When we consider the importance of and the potential consequences of mineral exploitation, we note this change in the law as a sort of scandal that may facilitate further looting, without even the people aware of the consequences.”

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

Children playing in mining tailings in Morococha, Peru. Credit: Milagros Salazar/IPS

By Carey L. Biron
WASHINGTON, Nov 6 2014 (IPS)

The world’s largest corporations continue to publicise scant information about their global operations, according to new analysis that warns that extractives companies in particular are unprepared for pending disclosure requirements.

The findings come from the global watchdog Transparency International, which looked at 124 of the world’s largest companies. Using publicly available information, the researchers ranked each corporation based on three concerns: anti-corruption measures, transparency around global operations and subsidiaries, and disclosure of country-by-country and project-level finances.“Industry resistance to this kind of regulation has been pretty strong, so it’s not surprising that companies aren’t voluntarily disclosing this information and instead waiting until they’re forced to do so.” -- Alexandra Gillies

While the level of anti-corruption activities is relatively high and growing, the current state of the latter two metrics is far weaker. Indeed, the average score for country-by-country reporting, seen as a transparency lynchpin, is a dismal six percent – and 50 companies have scored zero.

In introducing the study on Wednesday, Transparency International’s chair, Jose Ugaz, noted that the power of multinational companies in today’s global economy rivals even the biggest countries.

“With greater economic power comes greater responsibility,” he said. “Bad corporate behaviour creates the corruption that causes poverty and instability.”

In general, British companies fare best in the new index, Chinese and Asian companies more broadly fare worst, and the U.S. technology sector receives special criticism for its lack of transparency. Transparency International has been reporting on corporate governance since 2008, with the last such study being released in 2012.

The weak results for country-by-country reporting, in particular, will worry anti-poverty advocates and proponents of public sector spending. Such disclosure would, for instance, allow governments to efficiently compare crossborder information with the aim of cutting down on tax evasion as well as outright theft of revenues.

Developing countries may have lost an estimated six trillion dollars in the decade before 2011 due to tax evasion and other shady financial dealings, according to the Washington watchdog group Global Financial Integrity.

“Domestic resource mobilisation is seen as key to unlock economic development,” Koen Roovers, the E.U. advisor for the Financial Transparency Coalition, a global network that funded the new Transparency International report, told IPS.

“Publicly available [country-by-country reporting] information would enable citizens of developing nations to determine whether the taxes paid by the transnational companies that trade in their countries is in line with their activities. The apparent absence of this information gives reason for suspicion.”

Industry resistance

With the aim of ensuring that lucrative natural resources-related revenues are safeguarded in developing countries, the global extractives industry has been a special focus for disclosure requirements.

The United States, European Union and Canada in recent years have all passed project-by-project disclosure requirements, mandating reporting on all payments made by extractives companies to foreign governments.

And while the U.S. legislation is currently held up in court due to a lawsuit brought by the oil industry, the E.U.’s requirements are set to go into effect by the middle of next year. Canada’s new rules could be implemented even sooner.

Yet Transparency International warns that extractives companies are “not ready” to comply with these new rules.

“Even though country-by-country reporting was first introduced in the extractive sector, the 19 oil and gas companies in the study only scored an average of 10 per cent,” the report states. “Six companies in this industry scored zero.”

Not all of these companies did poorly on country-by-country reporting. For instance, the Norwegian oil company Statoil scored highest of all of the 124 companies on this metric, with a score of 66 percent.

Other strong performers included the Indian companies Oil & Natural Gas Corporation and Reliance, as well as the Australian-headquartered BHP Billiton, by certain calculations the world’s largest mining company.

Yet overall the sector still appears to be biding its time until the new requirements in the U.S., E.U. and Canada go into effect. For supporters of stricter disclosure, the findings underscore just how transformative those new legal regimes will be.

“Industry resistance to this kind of regulation has been pretty strong, so it’s not surprising that companies aren’t voluntarily disclosing this information and instead waiting until they’re forced to do so,” Alexandra Gillies, the head of governance at the Natural Resources Governance Institute (NRGI), a think tank, told IPS.

“While there are a few smaller companies that have taken this step, the big players certainly haven’t. Nonetheless, it will be interesting to see how the same data looks in another two years.”

Indeed, the U.S. and E.U. disclosure requirements alone would cover an estimated 65 percent of the global extractives sector in terms of value, according to Publish What You Pay, a global advocacy group. And the new Canadian rules, formally tabled late last month with the aim of implementation by April, would likewise affect the world’s largest national mining industry.

Further, at a summit next week, the Group of 20 (G20) industrialised countries are expected to approve a new country-by-country reporting standard that would cover all multinational companies. The Financial Transparency Coalition’s Roovers says the new findings from Transparency International will “up the ante” for the G20 discussions.

Still, he notes that, as currently envisioned, the G20 reports would likely not be made public due to concerns over commercial “sensitivities”.

On to contracts

For many advocates, non-public disclosure would defeat an important purpose of stricter transparency requirements: empowering citizens and civil society to engage in local-level oversight.

“The real innovation around project-level data is that citizens or journalists or parliamentarians would be able to understand the deals that their government has entered into. Right now all we have are highly aggregated figures,” NRGI’s Gillies says.

“If someone is dealing with, say, a huge mine in their community, that data can help them to understand how much money the government is collecting for that project – and whether the disruption they’re facing is worthwhile.”

Nonetheless, with country-by-country reporting requirements now on the horizon, Gillies and others are already turning their attention to a corollary data set: contract-level disclosure. Indeed, certain countries – including Liberia, Guinea, the Democratic Republic of Congo and others – as well as some companies are already making all information on contracts related to natural resource extraction publicly available.

“If you have good revenue or payment data, it’s still difficult to understand what those figures mean unless you know what agreements have been signed,” Gillies says.

“But contract disclosure is already becoming more widely accepted, with a few countries and companies taking the lead. It hasn’t yet become standard practice and what is being done remains piecemeal, but it’s enough to show that this activity isn’t commercially dangerous.”

Within a few years, advocates hope to see the disclosure of both payments and agreements signed with foreign governments become standard procedure.

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

The Canadian government is failing either to investigate or to hold the country’s massive extractives sector accountable for rights abuses committed in Latin American countries, according to petitioners who testified here Tuesday before an international tribunal.

The Inter-American Commission on Human Rights (IACHR) also heard concerns that the Canadian government is not making the country’s legal system available to victims of these abuses.“Far too often, extractive companies have double-standards in how they behave at home versus abroad.” -- Alex Blair of Oxfam America

“Canada has been committed to a voluntary framework of corporate social responsibility, but this does not provide any remedy for people who have been harmed by Canadian mining operations,” Jen Moore, the coordinator of the Latin America programme at MiningWatch Canada, a watchdog group, told IPS.

“We’re looking for access to the courts but also for the Canadian state to take preventive measures to avoid these problems in the first place – for instance, an independent office that would have the power to investigate allegations of abuse in other countries.”

Moore and others who testified before the commission formally submitted a report detailing the concerns of almost 30 NGOs. Civil society groups have been pushing the Canadian government to ensure greater accountability for this activity for years, Moore says, and that work has been buttressed by similar recommendations from both a parliamentary commission, in 2005, and the United Nations.

“Nothing new has taken place over the past decade … The Canadian government has refused to implement the recommendations,” Moore says.

“The state’s response to date has been to firmly reinforce this voluntary framework that doesn’t work – and that’s what we heard from them again during this hearing. There was no substantial response to the fact that there are all sorts of cases falling through the cracks.”

Canada, which has one of the largest mining sectors in the world, is estimated to have some 1,500 projects in Latin America – more than 40 percent of the mining companies operating in the region. According to the new report, and these overseas operations receive “a high degree” of active support from the Canadian government.

“We’re aware of a great deal of conflict,” Shin Imai, a lawyer with the Justice and Corporate Accountability Project, a Canadian civil society initiative, said Tuesday. “Our preliminary count shows that at least 50 people have been killed and some 300 wounded in connection with mining conflicts involving Canadian companies in recent years, for which there has been little to no accountability.”

These allegations include deaths, injuries, rapes and other abuses attributed to security personnel working for Canadian mining companies. They also include policy-related problems related to long-term environmental damage, illegal community displacement and subverting democratic processes.

Home state accountability

The Washington-based IACHR, a part of the 35-member Organisation of American States (OAS), is one of the world’s oldest multilateral rights bodies, and has looked at concerns around Canadian mining in Latin America before.

Yet this week’s hearing marked the first time the commission has waded into the highly contentious issue of “home state” accountability – that is, whether companies can be prosecuted at home for their actions abroad.

“This hearing was cutting-edge. Although the IACHR has been one of the most important allies of human rights violations’ victims in Latin America, it’s a little bit prudent when it faces new topics or new legal challenges,” Katya Salazar, executive director of the Due Process of Law Foundation, a Washington-based legal advocacy group, told IPS.

“And talking about the responsibility for the home country of corporations working in Latin America is a very new challenge. So we’re very happy to see how the commission’s understanding and concern about these topics have evolved.”
Home state accountability has become progressively more vexed as industries and supply chains have quickly globalised. Today, companies based in rich countries, with relatively stronger legal systems, are increasingly operating in developing countries, often under weaker regulatory regimes.

The extractives sector has been a key example of this, and over the past two decades it has experienced one of the highest levels of conflict with local communities of any industry. For advocates, part of the problem is a current vagueness around the issue of the “extraterritorial” reach of domestic law.

“Far too often, extractive companies have double-standards in how they behave at home versus abroad,” Alex Blair, a press officer with the extractives programme at Oxfam America, a humanitarian and advocacy group, told IPS. “They think they can take advantage of weaknesses in local laws, oversight and institutions to operate however they want in developing countries.”

Blair notes a growing trend of local and indigenous communities going abroad to hold foreign companies accountable. Yet these efforts remain extraordinarily complex and costly, even as legal avenues in many Western countries continue to be constricted.

Transcending the legalistic

At this week’s hearing, the Canadian government maintained that it was on firm legal ground, stating that it has “one of the world’s strongest legal and regulatory frameworks towards its extractives industries”.

In 2009, Canada formulated a voluntary corporate responsibility strategy for the country’s international extractives sector. The country also has two non-judicial mechanisms that can hear grievances arising from overseas extractives projects, though neither of these can investigate allegations, issue rulings or impose punitive measures.

These actions notwithstanding, the Canadian response to the petitioners concerns was to argue that local grievances should be heard in local court and that, in most cases, Canada is not legally obligated to pursue accountability for companies’ activities overseas.

“With respect to these corporations’ activities outside Canada, the fact of their incorporation within Canada is clearly not a sufficient connection to Canada to engage Canada’s obligations under the American Declaration,” Dana Cryderman, Canada’s alternate permanent representative to the OAS, told the commission, referring to the American Declaration of the Rights and Duties of Man, the document that underpins the IACHR’s work.

Cryderman continued: “[H]ost countries in Latin America offer domestic legal and regulatory avenues through which the claims being referenced by the requesters can and should be addressed.”

Yet this rationale clearly frustrated some of the IACHR’s commissioners, including the body’s current president, Rose-Marie Antoine.

“Despite the assurances of Canada there’s good policy, we at the commission continue to see a number of very, very serious human rights violations occurring in the region as a result of certain countries, and Canada being one of the main ones … so we’re seeing the deficiencies of those policies,” Antoine said following the Canadian delegation’s presentation.

“On the one hand, Canada says, ‘Yes, we are responsible and wish to promote human rights.’ But on the other hand, it’s a hands-off approach … We have to move beyond the legalistic if we’re really concerned about human rights.”

Antoine noted the commission was currently working on a report on the impact of natural resources extraction on indigenous communities. She announced, for the first time, that the report would include a chapter on what she referred to as the “very ticklish issue of extraterritoriality”.

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

Myanmar now has three years in which to put in place a series of transparency standards and publicly report on government extractives revenues, payments from mining and drilling companies, and related issues. Credit: Bigstock

By Carey L. Biron
WASHINGTON, Oct 15 2014 (IPS)

Lawmakers here are urging President Barack Obama to put transparency in the extractives sector at the centre of an upcoming trip to Myanmar.

While the government of Myanmar has recently engaged in a series of bilateral and multilateral pledges to make its lucrative but highly opaque mining and oil and gas industries more transparent, advocates increasingly warn that officials are failing to keep these promises."The real heart of the issue for civil society in Burma is the details of these contracts. They also want to start talking about the tremendous amount of money the Burmese government makes off of these oil and gas deals, and how most of that doesn’t benefit the people of Burma.” -- Jennifer Quigley

The U.S. government has been a key sponsor in facilitating these pledges, and many now see President Obama’s visit, slated for next month, as an important opportunity to prompt legal change in Myanmar, also known as Burma. Myanmar officials are currently revising related legislation, although little is known about these secretive talks.

Supporters say reforms, particularly around public information on extractives deals and revenues, could help to ensure that Myanmar’s significant natural resources wealth is used for development rather than simply enriching businesses close to the regime.

“Despite commitments to transparency and good governance, decision-making over the management of Burma’s national resources remains largely hidden from public scrutiny … the gap between the Burmese government’s promises and its delivery is widening,” 16 members of the U.S. Congress warned President Obama in a letter sent Tuesday.

“We therefore urge you, during your visit to Burma, to call on the Burmese government to ensure provisions on transparency and accountability are incorporated into revised laws, regulations and policies governing the extractives sector, and negotiated into new contracts and licenses.”

The letter, a copy of which was seen by IPS, includes backing from both Republicans and Democrats. Last year, the United States initiated a partnership between the Myanmar extractives industry and the Group of 8 (G8) rich countries, which could offer Obama additional leverage in demanding new transparency measures.

The lawmakers’ call comes not only a month ahead of President Obama’s planned trip to Myanmar (his second), but also as a global summit on extractives transparency begins in the country’s capital, Naypyidaw. The two-day meeting of the Extractives Industries Transparency Initiative (EITI), which promotes guidelines that are currently followed by 46 countries, comes just three months after Myanmar became one of the EITI’s newest candidate countries.

Under these guidelines, Myanmar now has three years in which to put in place a series of transparency standards and publicly report on government extractives revenues, payments from mining and drilling companies, and related issues.

Just a month after its EITI candidature was accepted, Myanmar signed several dozen contracts with domestic and international oil and gas companies. Yet according to Tuesday’s letter, the terms of those contracts remain secret, as are ongoing revisions to policies overseeing the extractives sector.

“The laws and regulations governing the extractive industries are currently being revised behind closed doors, with no public consultation,” the lawmakers state.

“Drafts of the first of these new pieces of legislation contain no provisions on public disclosure of data and do not reflect any of the promises of greater transparency made by the government through the EITI process.”

Beneficial owners

The contracts signed in August were for 36 oil and gas blocks, both on land and offshore, auctioned off to 46 local and global companies over the past year. While the details of those contracts remain under wraps, until recently almost nothing was known even of these companies’ owners.

Around the country’s EITI application, an international watchdog group called Global Witness began focusing on what’s known as ultimate beneficial ownership – information on who, ultimately, controls and benefits from a company’s activities. In June, the group had such information on the companies involved in just three of the blocks.

Yet after requesting information directly from the companies, Global Witness last week reported that many more companies had come forward with these details. The companies were also asked whether any of their beneficial owners were politically powerful individuals in Myanmar.

“In total, 28 companies have now participated in Global Witness’ ownership review, and we have been provided with full beneficial ownership details of all partners in 17 oil and gas blocks,” the group says in a new report, published Friday. “This shows that businesses can and will provide such information if they have an incentive, such as protection of their reputation, to do so.”

Global Witness says the information remains unverified and that a “hard core” of 18 companies continue to refuse to provide any information. Still, the group says this corporate response has already set a surprising international example.

“Not only is this significant locally, but it puts Myanmar in the unlikely position of setting a global precedent on transparency, as it’s the first time anywhere in the world that companies have systematically declared their ultimate ownership,” Juman Kubba, an analyst at Global Witness, told IPS.

“Our findings show that companies can reveal their owners if they’re pushed to do so. It’s now up to the Myanmar government with the support of the U.S. and other backers to make that push so that all oil, gas and mining company ownership in the country is public.”

Outside the framework

Still, some worry that the recent corporate disclosure wasn’t actually carried out through the EITI framework, thus suggesting that the government’s transparency pledges remain weak. They also dispute whether beneficial ownership is of foremost importance in the Myanmar context.

“This disclosure is incredibly important on the global scale, but when it comes to Burma the real concern has never been about ownership but rather about conflict related to resources,” Jennifer Quigley, the president of the U.S. Campaign for Burma, an advocacy group, told IPS.

“This wasn’t done through the EITI in this instance, and the real heart of the issue for civil society in Burma is the details of these contracts. They also want to start talking about the tremendous amount of money the Burmese government makes off of these oil and gas deals, and how most of that doesn’t benefit the people of Burma.”

Quigley says that Myanmar’s government has long been comfortable making pledges it has no intention of keeping, and she see little prospect of that changing in the near term. Still, she says the United States has linked itself so closely to extractives transparency in Myanmar that President Obama will need to broach the subject during his trip next month.

“This is really an area in which the U.S. has married itself to the Burmese government,” she says. “So they need to be paying more attention to the fact that the Burmese government isn’t living up to its EITI promises.”

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

Commercial logging and firewood extraction for domestic use have accelerated Myanmar's deforestation rates in the last three decades. Credit: Amantha Perera/IPS

By Carey L. Biron
WASHINGTON, Aug 14 2014 (IPS)

Civil society groups are split over a decision by the U.S. government to waive sanctions on Myanmar’s timber sector for one year.

The decision, which went into effect late last month, is being hailed by some as an opportunity for community-led and sustainability initiatives to take root in Myanmar, where lucrative forestry revenues have long been firmly controlled by the military and national elites. The European Union, too, is currently working to normalise its relations with the Myanmarese timber sector.“The concern is that the system that is gaining traction with the international timber industry is to bypass any national systemic forestry reform process.” -- Kevin Woods of Forest Trends

Yet others are warning that Washington has taken the decision too soon, before domestic conditions in Myanmar are able to support such a change.

“Lifting sanctions on the timber industry now appears to be a premature move by the U.S., and risks lessening Burma’s impetus towards reform,” Ali Hines, a land campaigner with Global Witness, a watchdog group, told IPS.

“Burma is not yet in a position to state convincingly where and how timber is sourced, meaning that U.S. importers and traders have little way of knowing whether Burmese timber is illegal, or linked to social or environmental harm.”

In June, Washington granted a limited one-year license to the 200 members of the U.S.-based International Wood Products Association (IWPA) to engage in transactions with the Myanma Timber Enterprise, the state logging agency. U.S. officials say the aim of the decision is to allow U.S. companies and customers to help strengthen reforms in the Myanmarese timber trade, hopefully promoting transparency and building nascent sustainability practices.

“Interaction with responsible business can help build basic capacity so that Burma can begin to tackle the long-term systemic issues present in its extractive sectors,” Kerry S. Humphrey, a media advisor with the U.S. State Department, told IPS.

“The State Department has been in consultations with IWPA to ensure that any trade conducted under this license is in line with U.S. Government policies, including promoting sustainable forest management and legal supply chains.”

Humphrey notes that IWPA will now be required to file quarterly reports with the State Department on its “progress in helping to ensure legal timber supply chains”.

Yet critics worry this will simply create two parallel timber sectors, one licit and another that is little changed. The industry, as with Myanmar’s broader extractives sector, has long been notorious for deep corruption and human rights abuses.

“The concern is that the system that is gaining traction with the international timber industry is to bypass any national systemic forestry reform process,” Kevin Woods, a Myanmar researcher with Forest Trends, a watchdog group, told IPS.

Instead, Woods says, the end result could be to “create a wall around a few government-managed timber reserves to feed global tropical timber demand, leaving the rest of the country’s forests located in ethnic conflict zones to be continually pillaged and sold across its borders.”

Free-for-all?

Nearly a half-decade after Myanmar began a stuttering process of pro-democratic reform, many today are increasingly concerned that this process is slowing or even reversing course. Late last month, 72 members of the U.S. Congress warned U.S. Secretary of State John Kerry that conditions in the country have “taken a sharp turn for the worse” over the past year and a half.

Kerry was in Myanmar over the past weekend, where he reportedly raised U.S. concerns over such regression with multiple top government officials.

Yet he also rejected concerns that Washington is “moving too quickly” in rolling back punitive bilateral sanctions on Myanmar. He had gone through “a long list of challenges” with Myanmarese officials, Kerry told journalists Sunday, “in a very, very direct way”.

With the removal of sanctions, however, many worry that Washington is losing important leverage. In the timber sector in particular, some question the extent to which U.S. and other foreign companies will have the wherewithal, or interest, to effect change on the ground in Myanmar – particularly given the tepid commitments made by the country’s government.

“This is not the time for U.S.-based timber importers to be investing in Burma,” Faith Doherty, a senior campaigner at the Environmental Investigation Agency, a watchdog group, told IPS.

“Secretary Kerry … raised serious questions as to the backsliding of reforms and continuing human rights abuses within the country – how do companies within the IWPA think they are able to avoid contributing to these issues that are prevalent throughout the timber sector?”

Indeed, some observers suggest that Myanmar’s opening-up has been accompanied by a sense of free-for-all.

“Illegal logging and natural resource grabbing, including land, in ethnic states and regions … have become worse since the reforms started and the influx of foreign investment into the country,” Paul Sein Twa, with the Burma Environmental Working Group, an advocacy organisation, told IPS.

“Remember, we are still in a fragile peace-building period and there is no rule of law in the conflict areas. So our recommendation is to go slowly on reforming law and policies – to open up more space, engage with civil society organisations and the ethnic armed groups.”

Certification momentum

Any ultimate success in reforming Myanmar’s forestry sector will depend on future actions by both the country’s government and the foreign companies that end up purchasing the country’s timber. Yet some are applauding the lifting of U.S. sanctions as an important opportunity to finally begin the work of reform.

“The problem with sanctions is that they restrict buyers in our country from engaging in the sector – the international marketplace, which today includes strong preferences for sustainable products, is inaccessible,” Josh Tosteson, a senior vice-president with the Rainforest Alliance, a group that engages in the certification of tropical forest products, told IPS.

“Particularly if the lifting of sanctions comes along with some commitments from significant buyers to work cooperatively to support and incentivise the march toward sustainability certification, that can inject some real energy to drive this process forward.”

This week, the Myanmar Forest Department accepted a proposal from the Rainforest Alliance for a pilot production community forest in the country’s south.

“Having market mechanisms there that provide a minimum preference and a new market norm that won’t allow anything other than responsible or sustainably produced products to enter the market – that will be the key element,” Tosteson says.

“Particularly in intra-Asian trade you’ll need to have buying companies get on board with these norms. That will be a significant challenge, but if they’re not stepping up to create these new market norms no other efforts will matter – illicit products will simply flow through the routes of least resistance.”

Edited by: Kitty Stapp

The writer can be reached at cbiron@ips.org

Artisanal diamond miners at work in the alluvial diamond mines around the eastern town of Koidu, Sierra Leone. Credit: Tommy Trenchard/IPS

By Jim Lobe
WASHINGTON, Aug 5 2014 (IPS)

As the three-day U.S.-Africa Leaders Summit got underway here Monday, anti-corruption activists urged President Barack Obama to prod a key U.S. agency to issue long-awaited regulations requiring oil, gas, and mining companies to publish all payments they make in countries where they operate.

“The companies need to be held accountable, and we would ask President Obama to also support us in this message,” said Ali Idrissa, the national co-ordinator of Publiez Ce Que Vous Payez (Publish What You Pay, or PWYP), in Niger, a country rich in uranium and iron deposits.Anti-corruption activists are losing patience with what they see as pressure by the extractive industries to prevent the emergence of tough new disclosure requirements.

“We need to look at the entire production chain of these extractive industries; we need to continue putting pressure on this industry …so we can fight poverty and corruption and ensure we have a better development,” he added.

Idrissa, one of scores of African activists who have descended on Washington for this week’s unprecedented gathering, was speaking at a forum sponsored by the Open Society Foundations (OSF), Global Witness, Human Rights Watch, and Oxfam America, among other groups, on civil society efforts to promote government and corporate transparency and accountability on the continent.

The activists, whose numbers are dwarfed by the size of official government delegations, most of which are led by heads of state, as well as U.S. and African corporate chiefs eager to explore business prospects, nonetheless claimed at least part of the spotlight Monday.

At what was billed as a “Civil Society Forum Global Town Hall” meeting at the National Academy of Sciences, both Vice President Joe Biden and Secretary of State John Kerry echoed Idrissa’s concerns in general remarks.

“Widespread corruption is an affront to the dignity of your people and direct threat to each of your nations,” Biden declared. “It stifles economic growth and scares away investment and siphons off resources that should be used to lift people out of poverty.”

Kerry also stressed the importance of “transparency and accountability” not only in attracting more investment but also in “creat(ing) a more competitive marketplace, one where ideas and products are judged by the market and their merits, and not by a backroom deal or a bribe.”

While their words gained applause, it was clear from the OSF forum that anti-corruption activists are losing patience with what they see as pressure by the extractive industries to prevent the emergence of tough new disclosure requirements from the Securities and Exchange Commission (SEC), the federal agency that regulates U.S. stock and related markets.

At issue is section 1504 of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, an anti-corruption provision that requires all extractive companies listed on U.S. stock exchanges to publish each year all payments they make to the U.S. and foreign governments in the countries where they operate.

According to the legislation, which is designed to counter the so-called “resource curse” that afflict many developing countries, particularly in sub-Saharan Africa, taxes, royalties, fees, production entitlements and bonuses should all be reported down to the project level.

Eight of the world’s 10 largest mining companies and 29 of the 32 largest active international oil companies would be covered by the Act, which requires the SEC to develop specific regulations to implement its intent.

After nearly two years of consultations with businesses, activists, and other interested parties, the SEC issued draft regulations, but they were immediately challenged in a lawsuit filed by the American Petroleum Institute (API), a lobby group that represents the powerful oil and gas industry here.

The SEC has since reported that it does not plan to resume the rule-making process until March, 2015, a source of considerable frustration for the anti-corruption activists.

In the meantime, the European Union (EU), whose member countries have historically shown much less willingness than Washington to enact legislation to deter bribery and corruption by its companies operating abroad, has adopted and begun to enforce its own tough disclosure measures that go beyond the energy and mining industries to include timber companies as well.

“Until 2000, corruption and bribery by European [companies] was not only legal; it was tax-deductible,” Mo Ibrahim, a Sudanese-British telecommunications entrepreneur and prominent philanthropist for good governance in Africa, told the OSF Forum. “The United States, which has been a leading light on corruption, is now dragging its feet. Do you have a backbone, or what?”

He echoed the concerns of an open letter sent to Obama and signed by the heads of the national chapters of PWYP, an OSF-backed international anti-corruption group, in Guinea, Niger, Tanzania, the Democratic Republic of the Congo (DRC), Chad, Ghana, and Nigeria, on the eve of this week’s Summit.

“It has been more than four years since you signed the Dodd-Frank Act, section 1504 of which obliges all U.S. listed extractive companies to publish the payments they make,” the letter, which was also signed by the African representatives on the PWYP global steering committee. “The law will yield crucial data that can help us hold our governments to account, but it has yet to come into effect.

“We ask you to urge the SEC for a swift publication of the rules governing section 1504 to ensure that they are in line with recent EU legislation and the emerging global standard for extractive transparency,” it said, adding that more also needs to be done to strengthen multilateral rules on taxation and creating a public registry of corporate beneficial ownership information as other critical parts of the anti-corruption struggle in Africa.

Harmonising the SEC regulations with those of the EU is particularly critical, according to Simon Taylor, co-founder and director of London-based Global Witness. “If the SEC gets it wrong, we will then have a double standard,” he noted, suggesting that some European companies could move to the U.S. if the latter’s requirements are less stringent.

API and other critics of the section 1504 have argued that strict rules will put U.S. companies at a disadvantage in bidding for mining or drilling rights, especially vis-à-vis China whose trade investment in Africa, particularly in the continent’s extractive resources, have exploded over the past decade and now far exceeds the U.S.

Beijing has failed so far to join the 12-year-old Extractive Industries Transparency Initiative (EITI), an Oslo-based international organisation that promotes transparency and currently includes 44 governments, as well as extractive companies, civil-society groups, international development banks, and institutional investors.

But Ibrahim said it was “not acceptable for Europeans or Americans to say, ‘We want to be moral and ethical, but we can’t until this guy’” joins. “China is learning; it can understand and can change. They’re trying to find their feet [in Africa].”

George Soros, the billionaire philanthropist who created OSF, as well as a number of other foundations, said it was important to get China on board because “otherwise they are the spoilers. It is so important that I think we have to be willing to reconsider the whole structure of the [EITI which] they consider [to be] a post-colonial invention.

“They have to be involved in the creation of the system that they will abide by. That’s where civil society in Africa can be influential,” he added.

Jim Lobe’s blog on U.S. foreign policy can be read at Lobelog.com. He can be contacted at ipsnoram@ips.org

Edited by: Kitty Stapp

The open wounds of the Amazon. Credit:Rolly Valdivia/IPS

By Michelle Tullo
WASHINGTON, Apr 9 2014 (IPS)

Indigenous leaders are warning of increased violence in the fight to save their dwindling forests and ecosystems from extractive companies.

Indigenous representatives and environmental activists from Africa, Asia, Australia and the Americas met over the weekend here to commemorate those leading community fights against extractive industries. The conference, called Chico Vive, honoured Chico Mendes, a Brazilian rubber-tapper killed in 1988 for fighting to save the Amazon.“Right now in our territory we can’t drink the water because it’s so contaminated from the hydrocarbons from the oil and gas industry." -- Chief Liz Logan of the Fort Nelson First Nation in BC, Canada

The gathering also recognised leaders who are continuing that legacy today.

“His struggle, to which he gave his life, did not end with his death – on the contrary,” John Knox, the United Nations independent expert on human rights and the environment, said at the conference. “But it continues to claim the lives of others who fight for human rights and environmental protection.”

A 2012 report by Global Witness, a watchdog and activist group, estimates that over 711 people – activists, journalists and community members – had been killed defending their land-based rights over the previous decade.

Those gathered at this weekend’s conference discussed not only those have been killed, injured or jailed. They also shared some success stories.

“In 2002, there was an Argentinean oil company trying to drill in our area. Some of our people opposed this, and they were thrown in jail,” Franco Viteri, president of the Confederation of Indigenous Nationalities of the Ecuadorian Amazon, told IPS.

“However, we fought their imprisonment and the Inter-American Court of Human Rights ruled in our favour. Thus, our town was able to reclaim the land and keep the oil company out.”

Motivated by oil exploration-related devastation in the north, Ecuadorian communities in the south are continuing to fight to defend their territory. Viteri says some communities have now been successful in doing so for a quarter-century.

But he cautions that this fight is not over, particularly as the Ecuadorian government flip-flops on its own policy stance.

“The discourse of [President Rafael] Correa is very environmentalist, but in a practical way it is totally false,” he says. “The government is taking the oil because they receive money from China, which needs oil.”

China has significantly increased its focus on Latin America in recent years. According to a briefing paper by Amazon Watch, a nonprofit that works to protect the rainforest and rights of its indigenous inhabitants, “in 2013 China bought nearly 90% of Ecuador’s oil and provided an estimated 61% of its external financing.”

The little dance

Many others at the conference had likewise already seen negative impacts due to extractives exploration and development in their community.

“We have oil and gas, mines, we have forestry, we have agriculture, and we have hydroelectric dams,” Chief Liz Logan of the Fort Nelson First Nation in British Columbia, Canada, told IPS.

“Right now in our territory we can’t drink the water because it’s so contaminated from the hydrocarbons from the oil and gas industry … The rates of cancer in our community are skyrocketing and we wonder why. But no one wants to look at this, because it might mean that what [extractives companies] are doing is affecting us and the animals.”

Logan described the work of protecting the community as a “little dance”: first they bring the government to court when they do not implement previous agreements, then they have to ensure that the government actually implements what the court orders.

Others discussed possible solutions to stop the destruction of ecosystems, and what is at stake for the communities living in them. The link between local land conflicts and global climate change consistently reappeared throughout many of the discussions.

“My community is made up of small-scale farmers and pastoralists who depend on cattle to live. For them, a cow is everything and to have the land to graze is everything,” said Godfrey Massay, an activist leader from the Land Rights Institute in Tanzania.

“These people are constantly threatened by large-scale investors who try to take away their land. But they are far more threatened by climate change, which is also affecting their livelihood.”

Andrew Miller of Amazon Watch described the case of the contentious Belo Monte dam in Brazil, which is currently under construction. Local communities oppose the dam because those upstream would be flooded and those downstream would suddenly find their river’s waters severely reduced.

“People are fighting battles on local levels, but they are also emblematic of global trends and they are also related to a lot of the climate things going on,” Miller told IPS. “[Hydroelectric] dams, for example, are sold as clean energy, but they generate a lot of methane, which is a powerful greenhouse gas.”

According to Miller, one value of large gatherings such as this weekend’s conference is allowing participants to see the similarities between experiences and struggles around the world, despite often different cultural, political and environmental contexts.

“In each case there are things that are very specific to them,” Miller said. “But I think we are also going to see some trends in terms of governments and other actors cracking down and trying to limit the political space, the ability for these folks to be effective in their work and to have a broader impact on policy.”

Yet activists like Viteri, from Ecuador, remain determined to protect their land.

“We care for the forest as a living thing because it gives us everything – life, shade, food, water, agriculture,” Viteri said. “It also makes us rich, even if it is a different kind of richness. This is why we fight.”

A major international initiative aimed at promoting transparency in the extractives industry is coming under harsh criticism for accepting an application from Ethiopia, despite significant ongoing legal restrictions on the country’s civil society.

The Extractive Industries Transparency Initiative (EITI), a standards programme based in Oslo, had declined a previous application for candidature from Ethiopia, in 2010. The previous year, the Ethiopian government had passed a law widely seen as repressive, and the EITI board stipulated that the country’s application would be deferred until that law was struck down."The simple fact is that the EITI process won’t be able to advance any improvements unless civil society is at the table and has a voice." -- Lisa Misol

Yet despite the fact that the law remains in place, on Wednesday the EITI board voted to accept Ethiopia’s application to become a candidate for full membership in the organisation. Some say the group has now violated its own rules.

“We’re very disappointed by this. If these people don’t follow the criteria, what’s the point of having criteria?” Obang Metho, executive director of the Solidarity Movement for a New Ethiopia, a Washington-based advocacy group, told IPS.

“Today it is impossible for civil society to function in Ethiopia, because of this bill. We can wait for years for changes, but as long as the current government is there I can’t foresee any tangible change. This decision [by EITI] is not going to be productive.”

The law in question is known as the Charities and Societies Proclamation (CSP). Ethiopia’s first comprehensive legislation to regulate the registration of civil society groups, the law places onerous restrictions on groups that receive more than 10 percent of their funding from foreign sources.

It also forbids organisations from engaging in a range of activities central to ensuring public oversight over the government and its officials. The United Nations has warned that the law has “devastating” ramifications for the ability of Ethiopians to effectively form and operate civil society organisations.

Such concerns are particularly relevant for EITI, which, since its founding in 2003, has offered a unique platform for cooperation between the extractives industry, government and civil society. Importantly, each of these elements is to receive equal voice within the EITI system, with the immediate aim of sector-specific transparency meant to translate into broader strengthening of good governance.

Thus, if the civil society component isn’t able to function effectively, the entire process would cease to function. That, anyway, was EITI’s own concern in 2010, when it rejected Ethiopia’s application – the first time the board had ever taken such an action.

The EITI “board concluded that Ethiopia’s [CSP] would prevent civil society groups from being sufficiently independent and meaningfully participate in the process,” Anthony Richter, a member of the EITI board, stated in 2010. “The board decided, in effect, not to admit Ethiopia ‘until the [CSP] is no longer in place’.”

The EITI board made another high-visibility decision on Wednesday, voting to accept the candidature application of the United States (as well as that of Papua New Guinea). Yet if EITI has gone back on its own rules, critics say, the standard’s important overall potential will have been weakened.

“Before this decision, EITI was a prominent global initiative, considered to be one of the leading efforts to increase transparency and give citizens a chance to have a voice in important matters in their countries,” Lisa Misol, a senior business and human rights researcher at Human Rights Watch (HRW), a watchdog group, told IPS.

“Now I think all governments need to ask themselves what’s the value of being part of an initiative that allows in a country that doesn’t allow its citizens to make any use of this transparency. Unfortunately, EITI has sacrificed its credibility and irreparably harmed its own reputation.”

Neutered criteria

EITI currently lists 26 countries as compliant with its standards, and another 18 countries, including Ethiopia and the United States, as candidates. In total, 35 countries have produced formal EITI reports over the past decade.

Yet the decision to move forward with and approve Ethiopia’s application during this week’s EITI meeting reportedly led to deep divisions in the group’s board. While the EITI secretariat did not respond to a query from IPS, it has been quick to note that acceptance of Ethiopia’s application to become a candidate country means that the Ethiopian government now has three years to come into full compliance with EITI’s standards.

“Some opposed this decision, but it should be remembered that becoming a candidate does not mean that any country has met the EITI Standard,” Clare Short, the EITI chair, said in a statement after the board’s meeting.

“In the case of Ethiopia, the decision shows that the Board was convinced by the government’s commitment to the EITI’s principles. Membership of the EITI will mean that all stakeholders, including civil society, will have a better platform to hold the government and the companies to account and ensure the better management of the burgeoning sector.”

For its part, the Ethiopian government states that it has already set up a national steering committee made up of government, industry and civil society representatives, and has begun a series of trainings on the EITI standards. Its most recent application, from October, also deals directly with concerns over the CSP.

“In our view, the proclamation is not meant to restrict the operation of the civil society,” an introductory letter, presumably written by Minister of Mines Sinknesh Ejigu, states, “rather to create conducive environment for their activities as well as ensure transparency and accountability, establish a legal framework for their operation.”

Yet critics are pushing back strongly against the suggestion that EITI will now have more leverage to effect positive change in Ethiopia.

“The simple fact is that the EITI process won’t be able to advance any improvements unless civil society is at the table and has a voice,” HRW’s Misol says.

“It’s shocking to me that the board of an initiative that values civic participation has just endorsed Ethiopia as a candidate when there is no ability to have a functioning civil society in that country. The moment of leverage was before joining Ethiopia to join the club – not once it’s in. In effect, EITI has now neutered its own civil society criteria.”

Ethiopia will now be required to submit its first formal report to EITI by March 2016.

Washington will be barred from offering any bilateral assistance that could facilitate certain rights abuses, extractive industries or industrial logging in primary tropical forests. Credit: Bigstock

By Carey L. Biron
WASHINGTON, Jan 28 2014 (IPS)

Development activists and rights watchdogs are applauding a surprise strengthening of environmental and human rights policies governing U.S. development funding and overseas financial assistance.

Under the new provisions, the United States will be required to vote against multilateral funding for large-scale hydroelectric projects in developing countries, as well as push for redress of rights violations resulting from development initiatives by international financial institutions.“We’ve watched donor agencies such as USAID turning a blind eye to blatant human rights allegations in these areas." -- Anuradha Mittal

In addition, Washington will be barred from offering any bilateral assistance that could facilitate certain rights abuses, extractive industries or industrial logging in primary tropical forests.

The new mandates constitute just a tiny part of a massive bill, signed into law on Jan. 17, that funds the federal government through the end of this financial year. But supporters say the provisions could have both direct implications for specific situations and pending projects as well as longer-lasting impacts on development funding and approaches.

“The U.S. Congress has taken an important step toward bridging the gap between U.S. government policy on development finance and its human rights policy in requiring the U.S. government to press international financial institutions to provide compensation or otherwise remedy human right violations linked to their projects,” Jessica Evans, a Washington-based researcher on international financial institutions at Human Rights Watch, told IPS.

The new provisions, reportedly sponsored by Senator Patrick Leahy, will impact both on bilateral U.S. funding through agencies such as USAID, as well as on the significant contributions that the United States provides to multilateral development institutions, particularly the World Bank.

U.S. representatives will now be required to vote against multilateral funding for the construction of major hydroelectric projects, likely defined as anything over 15 metres high. Large dams have been criticised by development experts for decades, given their often inevitable impact on local communities and environmental systems.

However, the World Bank recently unveiled a new institutional strategy that may include a prominent focus on big dams. Thus, the Leahy provisions could prove to be an impediment to the Washington-based development funder’s vision.

“I applaud the U.S. Congress for directing the U.S. Treasury to oppose the financing of large dam projects through the World Bank and other financial institutions,” Deborah Moore, a former commissioner on the World Commission on Dams and current chair of the board of International Rivers, a global watchdog group, said in a statement.

“I think the message now is clear: there are better options for meeting communities’ needs for electricity that are cheaper and sustainable.”

International Rivers says the new law will require the United States to oppose current and pending hydro projects on the Indus and Congo rivers, as well as in Guyana, Laos and Togo.

The appropriations bill also requires that the U.S. push multilateral funders, particularly the World Bank, to incorporate new external oversight and evaluation mechanisms for each project they undertake, to ensure that stipulated safeguards are being followed.

According to a statement released to the media and published over the weekend, the World Bank is currently analysing the scope of the new provisions. Yet future U.S. funding for the bank could now be contingent on this new requirement.

“The overall sentiment in provisions calling for stricter oversight and urging [World Bank President Jim Kim] to look outside the World Bank walls to better address the issues plaguing the institution is at the core of civil society advocacy,” Josh Lichtenstein, director of campaigns for the Bank Information Center (BIC), a watchdog group here, told IPS.

“We welcome the use of the legislative process to send strong messages to the [international financial institutions], particularly in pushing them to adopt policies and procedures that are better in line with highest international standards and in implementing stricter oversight to ensure those standards are upheld.”

Official acknowledgement

Other provisions within the new appropriations bill mandate actions regarding specific ongoing or pending projects that have garnered criticisms over rights abuses, particularly in Cambodia, Guatemala and Ethiopia.

In 2010 in Cambodia, families in northern Phnom Penh were illegally evicted from their lands for a major development project that included filling a large lake, Boeung Kak, with sand. Cambodia is a World Bank client, and the evictions directly contravened bank standards.

In Guatemala, the construction of a large hydroelectric dam on the ChixoyRiver during the early 1980s displaced 3,500 indigenous peoples, leading to tensions that resulted in the massacre or rights abuses of some 400 people. That project was partially funded by the World Bank.

Under the new legislation, the U.S. representative at the World Bank (and, in the case of the Chixoy dam, the Inter-American Development Bank) will now be required to offer regular updates on progress on reparations and redress surrounding both of these situations.

“We began to work for reparations in 1995 and today we heard the great news,” Carlos Chen Osorio, director for the Coordination of Affected Communities by the Chixoy Hydroelectric Plant, an advocacy group, said in a statement. “We feel that we are not alone and are very grateful to all those that have committed to work on this.”

In Ethiopia, meanwhile, the United States itself has come under criticism for helping to bankroll a major government development project that has included forcibly moving pastoralists from traditional lands in the Lower Omo and Gambella regions, to be settled in villages. The new law now disallows U.S. monies from either directly or indirectly funding forced displacement in these areas.

“We’ve watched donor agencies such as USAID turning a blind eye to blatant human rights allegations in these areas,” Anuradha Mittal, executive director of the Oakland Institute, a watchdog group that has carried out multiple investigations on forced displacements in Ethiopia, told IPS. (USAID did not respond to request for comment by deadline.)

“It’s a real relief now to see the U.S. Congress offering true acknowledgement that these reports of forced evictions are not mere allegations,” she continues. “Now that they’ve taken a stand, however, we need to ensure that this is not just language but rather is fully implemented.”

Indeed, civil society interest will now focus on how U.S. and international agencies implement these new provisions. While U.S. law offers a new opportunity to mitigate adverse impacts of development funding, it is unclear the extent to which that tool will be used.

“While we celebrate this achievement, we are cautious in our expectations,” BIC’s Lichtenstein says, “as unscripted and unfunded mandates, at their best, often indicate the start of serious discussion and better coordination, rather than systematic change.

A tunnel in Chile's El Teniente mine, the world's largest underground mine. Credit: Marianela Jarroud/IPS

By Carey L. Biron
WASHINGTON, Nov 1 2013 (IPS)

Civil society groups from throughout Latin America are urging “home countries” to take greater responsibility for the actions of their companies abroad, particularly those in the extractives industry.

“We would like to be able to influence policies that are being developed around the supply of minerals for various purposes – a lot of these policies are being framed as having to do with national defence, so there’s practically a guarantee that these reserves must continue to be supplied,” Pedro Landa, with the Honduran Centre for Collective Development, told IPS in Spanish."It is not just the host states that have a responsibility in this regard, but also the home states, where these companies come from.” -- Katya Salazar

“But that’s making these companies more aggressive in our countries … Oftentimes these companies are more powerful than the governments, and can simply buy off officials.”

Several groups are currently in Washington to speak on the topic with U.S. lawmakers and to testify before the Inter-American Commission on Human Rights (IACHR), the primary rights forum of the 35-member Organisation of American States (OAS), which has its headquarters here.

The groups are warning that legal frameworks throughout Latin American countries have been overhauled in recent years such that, today, pro-business policies have made it extremely difficult for local communities to oppose mining proposals in their vicinities.

“Honduras is considered one of the most violent countries in the world, with a homicide rate of 86 per 100,000 residents, but this level of crime is very closely linked to the conditions in our country that also have to do with the extractive model,” Landa told a briefing on Capitol Hill on Thursday.

“In countries like Honduras, where there is a lot of social upheaval, it’s easy to pass laws that facilitate the extractive industries, especially mining. But these laws have been harmonised to be in concordance with the free trade agreements that our countries have signed … while many of the proposals have been put forth or influenced by the transnational corporations themselves.”

The United States in particular passed a slew of free trade agreements with Latin American countries during the 1990s, during the process of which the U.S. government mandated labour and trade concessions that, in the eyes of many, gave inordinate power to multinational mining companies. Landa says that the result today is a lack of adequate mechanisms by which local communities can oppose these industries – in any Latin American country.

In part because of trade agreements but also in part because of high global prices for minerals, Latin America has become a hotbed of extractives speculation in recent years. Simultaneously, local communities have seen their legal rights to oppose these projects curtailed.

“Since the 1990s in the region there’s been an expansion of investment in the natural resource sector, as part of the globalisation process and part of the privatisation of state-owned industries, and also linked to the growing global power of China and other developing countries,” Keith Slack, extractive industries global programme manager for Oxfam America, a humanitarian group and host of Thursday’s briefing, told IPS.

“Quite directly related to this increased interest has come this increased level of conflict, protest and social disruption.”

Much of this disruption is taking place in indigenous lands, compounding a broader issue in many countries where indigenous communities continue to struggle for agency and rights afforded other citizens. At the moment, most multinational companies do not appear to be adequately prepared for this complexity.

According to a new report released Wednesday by First Peoples, an advocacy group, just 5 of 52 U.S. companies surveyed had policies in place for “productively engaging” with indigenous communities. Indeed, some communities are feeling pressure from multiple companies interested in extraction projects.

“We’re noticing a broad trend in which companies operating in close proximity acquire ‘spillover’ risk from one another,” Nick Pelosi, a grants assistant with First Peoples, told IPS, pointing to such a situation around Neuquen, in Argentina. “In such scenarios, the positive policies and practices of individual companies are overwhelmed by the cumulative negative impacts of all companies in the region.”

New paradigm

Activists are now particularly focusing on trying to strengthen opportunities for local communities in Latin America and elsewhere to pursue judicial remedies for human rights violations in mining companies’ home countries. On Friday, this “home state” responsibility will be discussed for the first time before the IACHR, and proponents suggest that it could offer a new paradigm within international law.

“The Inter-American system and the United Nations have been focused on the responsibility of host states, where these violations happen,” Katya Salazar, executive director of the Due Process of Law Foundation, a Washington watchdog group, told the hearing on Thursday. “But we want to propose something new: it is not just the host states that have a responsibility in this regard, but also the home states, where these companies come from.”

Today, some 60 percent of the foreign mining companies in Latin America are Canadian, and as such last year Salazar and others requested an IACHR hearing specifically on home state responsibility for Canada. Although that hearing was turned down, Salazar notes that Friday’s more general hearing on the topic should be able to lead to a new discussion.

“Ten years ago we didn’t discuss women’s rights with the commission, while five years ago we didn’t discuss indigenous rights – but now these are common topics,” she told IPS.

“Similarly, today the discussion on the responsibility of home states is not yet a discussion at the commission. But the idea is that this hearing will open a window of new legal discussions within the Inter-American system.”

The ability of local communities to use the U.S. legal system to seek redressal for rights violations received a significant setback earlier this year. In April, the U.S. Supreme Court refused to allow a group of Nigerian plaintiffs to sue the Royal Dutch Shell Petroleum Company in U.S. court, finding that Shell’s connection to the United States was too tenuous.

Yet critics of the decision say that this is precisely the purpose for which the law in question – known as the Alien Tort Statute – was created.

“When Alien Tort claims are no longer effective in helping people to get responses to violations of their rights, what other tools exist?” Dora Lucy Arias, with the Jose Alvear Restrepo Lawyers Committee, a Colombian NGO, said Thursday, discussing some of the activists’ lobby efforts on Capitol Hill.

“So I’m wondering if, from Congress, we may be able to think about some new and really effective mechanisms to make sure that the victims of these human rights violations have some recourse.”

A Swiss village has decided to reject tax money from the firm Glencore and to instead donate it to charities. Other towns may follow, sending a strong signal to the government to follow the U.S. and the EU and introduce transparency rules for the extractive industry.

It’s rush hour in the city of Zug in Central Switzerland as Mrs Sandra Räppli struggles to raise her voice over the traffic noise. About 35 people listen as she lectures about commodity extraction and trading companies based in the city and the neighbouring town of Baar.

Räppli talks about complex company structures and tax optimisation, finally asking the audience: “Could you follow my explanations? Did you understand?” Then she smiles: “You couldn’t? No problem, because that is what those companies intend.”“Even as a member of parliament I can't be sure that things are handled correctly if the government on any occasion hides behind the tax secret.”

Once a month, actress Maria Greco slips into the role of Sandra Räppli and guides groups of inhabitants and visitors through the streets of Zug. The canton counts 116,000 inhabitants and more than 30,000 companies, 105 of which belong to the commodity cluster formed by GlencoreXstrata, Northstream, Rusal and Gazprom, to name just a few.

Privileged taxation for holding, domicile and mixed companies brought these firms here. Holding companies are exempt from cantonal income tax, and pay almost no capital tax. Incomes of management companies generated abroad are hardly taxed, too.

Critics say Zug’s tax environment is an invitation to ‘transfer pricing’, a method to allocate a corporation’s net profit before taxation; in other words a means for tax evasion. Despite sales of 214.44 billion dollars in 2012, Glencore paid no tax on earnings at all in the canton of Zug last year.

The commodity cluster as a whole is estimated to have paid only 40 million dollars in cantonal and communal taxes.

Under official secrecy rules, exact taxes paid by Glencore and other companies are not available. Statistics on the number of companies or their employees is also lacking, even at the national level.

“That  lack of transparency is a major problem,” says Andreas Hürlimann, a parliamentarian with the Green-Alternative party in Zug. “Even as a member of parliament I can’t be sure that things are handled correctly if the government on any occasion hides behind the tax secret.”

Hürlimann finds Zug’s tax regulation deeply unfair. “It makes us rich, while people in extraction countries suffer, as the companies evade taxation there.” He says that Zug bears at least some moral responsibility.

At the end of her tour, Sandra Räppli stops in front of Zug’s town hall. “Our politicians are hand in glove with Glencore’s managers,” she tells her audience. “Only if people get active can something be done about these companies.”

Räppli has just ended her second season of city tours. She’s happy that the attendance has remained high – by Swiss standards. Media reports and a campaign run by the Swiss non-governmental organisation Berne Declaration have clearly increased popular interest in the commodity sector.

In the nearby canton of Zurich, these efforts have yielded fruits. Several villages are up in arms against Glencore. The corporation’s flotation on the stock market in 2011 had filled the pockets of CEO Ivan Glasenberg, leading to a huge one-time tax inflow for the canton. That money was redistributed to the communes.

But in several communes, residents were appalled by profiting indirectly from what they call “Glencore’s dubious business conduct abroad.” They collected signatures and demanded that at least 10 percent of the “Glencore money” be donated to charities who support affected communities in extraction regions.

In Hedingen, a village of 3,500, voters approved the donation of 120,000 dollars to charities. Samuel Schweizer, a member of the local citizens’ committee, explained that success to IPS: “Our proximity to Zug was crucial, people could relate to Glencore. Also, we’ve managed to build a broad committee.”

Schweizer explained that donating only 10 percent of the “Glencore money” instead of the whole amount further helped to find a majority.

At least five more communes will soon decide upon similar initiatives. In Affoltern for example, 180,000 dollars are at stake. In Hausen, it’s 80,000 dollars.

There, Franz Schüle of the local initiative committee is optimistic. “We live in a rural area. When I explain that in Colombia the surface of the land belongs to the farmers, while everything below can be owned by extraction companies, people can relate to the problem easily.”

“Direct democracy has hit Glencore,” says Oliver Classen, spokesperson of the Berne Declaration. He’s aware that these communal initiatives are only a drop in the ocean and a one-time effort. “However, Hedingen has a huge political signalling effect,” Classen tells IPS.

This summer, the European parliament introduced the Transparency and Accounting Directives that force mining, oil and gas companies to publish their payments to governments; country by country and project by project. The Swiss government has remained hesitant so far and will present its own measures next spring.

Oliver Classen demands transparency on payments and human rights obligations for commodities companies producing or trading abroad.

GlencoreXstrata neither commented on the tax initiatives nor responded to accusations ranging from tax avoidance to violating basic human rights in extraction countries. Its spokesperson Charles Watenpuhl sent IPS a statement.

“We believe that Glencore’s global presence and economic strength have a predominantly positive impact on the communities in which we operate. We seek out, undertake and contribute to activities and programmes designed to improve quality of life for the people in these communities.

“Glencore’s tax strategy and payments play a vital role in our intention to achieve long-term sustainable development. We are committed to full compliance with all statutory obligations, full disclosure to tax authorities and reporting transparently in the tax payments that we make to the governments of the countries in which we operate.”

Haitians concerned about the impacts of unchecked mining meet at a sweltering tin-roofed church near Grand Bois on Jul. 5, 2013. Source: HGW/Lafontaine Orvild

By Correspondents
PORT-AU-PRINCE, Aug 1 2013 (Haiti Grassroots Watch)

As the government works on preparing “an attractive law that will entice investors”, Haitian popular organisations are mobilising and forming networks to resist mining in their country.

Already one-third of the north of Haiti is under research, exploration, or exploitation license to foreign companies."We in Baie de Henne are against any eventual mining because we will not profit one bit. It will have harmful impacts that destroy our fertile lands and our fruit trees and dry up our aquifers.” -- Vernicia Phillus, a member of the Tèt Kole women’s group

Some 2,400 square kilometres have been parceled out to Haitian firms fronting for U.S. and Canadian concerns. Some estimate that Haiti’s mineral wealth – mostly gold, copper, and silver – could be worth as much as 20 billion dollars. The awarding of permits behind closed doors, with no independent or community oversight, has angered many in Haiti, who fear that the government is opening the country up to systematic pillage.

But the head of the government mining agency told Haiti Grassroots Watch (HGW) his concern is to assure that Haiti is made more “attractive” to potential investors.

“We need an attractive mining law,” said Ludner Remarais, head of the Mining and Energy Agency. “A mining law that will entice investors.”

The current law is obsolete, according to Remarais.

Haiti’s “gold rush” has been going on for the past five years or so, since the price of gold and other minerals rose. Until last year, the government and the companies cut their deals behind closed doors. After an investigation revealed that 15 percent of the county was under contract, on Feb. 20, 2013 the Haitian Senate adopted a resolution demanding all activities cease in order to allow for a national debate and for analysis of all contracts.

“We are scrupulously respecting the decision,” Remarais said, but he added that the resolution does not annul the rights already acquired.

Local resistance in the gold-rich regions

Peasant, human rights, food sovereignty and environmental organisations are worried about the disastrous effects the mining industry could have on water quality, farmland, and on the affected regions in general and have formed the national Collective Against Mining to assist local associations with information and consciousness-raising sessions.

On Jul. 5, over 200 farmers from the area around the Grand Bois deposit – about 11 kilometres south of Limbé, in the North department – got together to discuss the mining operation and their futures. They spoke of their worries for three hours in sweltering tin-roofed church.

“When someone talks about mining, our history makes us think of slavery, of the takeover of our farmlands,” said Willy Pierre, a social sciences teacher from a nearby school. “We could lose our fertile fields. We will be forced off our land. Where will we live?”

The Grand Bois deposit is rich in gold and copper, according to tests carried out by the Canadian mining company Eurasian Minerals. Eurasian owns the license given by the BME to its Haitian subsidiary, Société Minière Citadelle S.A.

During the meeting, many people said they were nervous.

“This mining business should be a lesson for all of us,” warned Jean Vilmé, a farmer from the Bogé region of Grand Bois. “Not only will those of us who live around the mineral deposit perish, the entire country will be swallowed up!”

Two weeks earlier about 50 members of local and national organisations met in Jean Rabel, an impoverished town in the Northwest department with poor roads and no water system or health facilities. Participants watched and debated a video on mining in Haiti and discussed their next steps.

Earlier that month, some 60 representatives of the associations in the collective organised a day-long meeting at Montrouis, northeast of the capital. Of particular concern are the protection of ground water, food sovereignty, agricultural land, biodiversity, health, and land ownership.

Clébért Duval, a member of the peasant association Tèt Kole Ti Peyizan Ayisyen (“Small Haitian Peasants Working Together”) from Port-de-Paix, noted that a state that is working in favour of its people could use mineral resources to “change the conditions of the popular masses, peasants, vulnerable people, and could give this country a new face”.

However, he said, “If the state is a predator that is working for the multinationals, for the capitalist system which, since it is in crisis, is taking over the riches of poor countries to fight the crisis, then that state will always encourage mining. All the money that should go to the people will go to the foreign firms, except for a few crumbs for the local guys who are serving as go-betweens. The mining companies will get all the riches, just as they have in the past.”

Many rejected the officials’ arguments that mining is important for the country’s development and economy.

“In 2012, some companies did prospecting,” said Vernicia Phillus, a member of the Tèt Kole women’s coordination in Baie de Henne. “They took away soil and rock samples. Each person who worked for them got between 200 and 250 gourdes (4.65 to 5.81 dollars) a day.

“We in Baie de Henne are against any eventual mining because we will not profit one bit. It will have harmful impacts that destroy our fertile lands and our fruit trees and dry up our aquifers.”

Government and World Bank also organising

In early June, the Haitian mining agency and the World Bank organised a “Mining Forum” aimed at developing “the mining sector in a way that makes it a motor for the country’s economic takeoff.” Most of the speakers were from foreign institutions and from mining companies.

Parliamentarians, local elected officials, independent geologists and researchers, representatives of the people from the regions concerned, and grassroots organisations did not address the room.

One of the meeting’s principle objectives was allegedly to sketch out the general contours of a new mining law for the country, even though World Bank officials said they had kicked off that process earlier this year, according to media reports.

During the Jun. 3-4 forum, Prime Minister Laurent Lamothe said that his government was working with “competent experts who have [Haiti’s] national interests at heart”, according to the Associated Press.

But World Bank involvement with the law appears to be a conflict of interest. In 2010, the International Finance Commission (IFC), a branch of the bank, invested about five million in Eurasian Mineral’s Haiti operations, receiving Eurasian shares in exchange.

The World Bank is often criticised by organisations like Mining Watch Canada, Earthworks, and others for being lax where the protection of poor countries is concerned, and for its role in the “continuation of colonialism” in Africa, Asia, and Latin America through its important loans to mining companies.

In March, the U.S. government representative to the World Bank abstained in a vote to approve a bank loan for 12 billion dollars to a mining operation in the Gobi Desert, citing concerns over potential negative environmental impacts. The bank loans were approved anyway, according to Inter Press Service.

Asked about an eventual new law that would be “attractive” and capable of “enticing investors”, the director of DOP, a member of the Collective Against Mining, said he was concerned.

“Mining legislation that is ‘attractive’ will open the country up for ‘business,’” wrote attorney Patrice Florvilus on Jul. 14, 2013, making reference to the government’s slogan “Haiti – Open for business.”

“Business, without considering the deleterious effects on community life and on the environment, which is already deteriorating at a worrying pace,” he added.

In a Jul. 22 note, the Collective wrote the following: “We want a truly national law and international conventions that protect life, water, land, and the environment, and that outlaw mining which brings with it pollution, destruction, contamination, and more hunger.”

Please also see other Haiti Grassroots Watch stories on the issue: Dossier #18 and Dossier #27

Haiti Grassroots Watch is a partnership of AlterPresse, the Society of the Animation of Social Communication (SAKS), the Network of Women Community Radio Broadcasters (REFRAKA), community radio stations from the Association of Haitian Community Media and students from the Journalism Laboratory at the State University of Haiti.

Children in Luanda. Angola is expected to graduate from the ranks of the LDCs by 2015. Credit: Louise Redvers/IPS

By Thalif Deen
UNITED NATIONS, Jul 31 2013 (IPS)

The number of “least developed countries” (LDCs), which rose from the original 24 back in 1971 to the current 49, is beginning to shrink – haltingly.

So far, three countries – Botswana, Cape Verde and the Maldives – have “graduated” from LDCs to the status of developing countries."The key issue of a widening inequality gap and redistribution of resources remains a development challenge." -- Dr. Arjun Karki of LDC Watch

And as economies improve, at least six more countries – Tuvalu, Vanuatu, Kiribati, Angola, Samoa and Equatorial Guinea – are on the verge of leaving the ranks of LDCs by 2015.

But some of them have been reluctant to graduate – and sought postponements – since LDC status provides several benefits, including preferential tariffs on exports and increased development aid.

Still, the growing list of potential “graduates” comes in the midst of a new U.N. report that says inflows of foreign direct investment (FDI) to LDCs grew by 20 percent last year, registering a record 26 billion dollars.

The strong gains were led by Cambodia, as well as five African countries: the Democratic Republic of Congo (DRC), Liberia, Mauritania, Mozambique and Uganda, all of them LDCs.

The recently-released World Investment Report 2013, authored by the Geneva-based U.N. Conference on Trade and Development (UNCTAD), says growth was led by strong gains in Cambodia (where inflows were up 73 percent), DRC (96 percent), Liberia (167 percent), Mauritania (105 percent), Mozambique (96 percent), and Uganda (93 percent).

Still, 20 LDCs reported declines in FDI, and the trend was particularly pronounced in Angola, Burundi, Mali and the Solomon Islands.

Described as the poorest of the world’s poor, LDCs are mostly characterised by extreme poverty and economic structural weaknesses.

According to the United Nations, these have been often compounded by geophysical handicaps, limited capacity for growth and development and vulnerability to external shocks.

The most recent addition to the list of 49 LDCs is the new nation state of South Sudan, which joined the United Nations as its 193rd member in July 2011.

Asked if the FDI increase in LDCs is the beginning of a new trend or just a flash in the pan, Dr. Arjun Karki, international coordinator for LDC Watch, a global civil society alliance solely focused on developmental issues and concerns of the LDCs, told IPS, “The scenario is not crystal clear.”

Given the fall in FDI inflows to developed countries, the LDCs are now on the FDI radar, he added.

“If you observe the trend, it’s the resource-rich LDCs, such as the DRC, Liberia, Mauritania, Mozambique, and Uganda, that are receiving FDI inflows,” he pointed out.

But investments are reported to be highest in the extractive sector, he noted.

“From the development perspective, this trend is not very encouraging as this reinforces the commodity-led growth in LDCs which is not sustainable,” Dr Karki said.

The U.N. Committee for Development Policy (CDP) usually determines “eligibility” for LDC status – based on several factors, including population, national income and other economic indicators – but the ultimate decision rests with the countries themselves.
Zimbabwe, for example, has refused to join the LDC group despite being judged eligible by CDP.

Secretary-General Ban Ki-moon says the increase in FDI comes at “an important moment” when the international community is making a final push to achieve the Millennium Development Goals (MDGs) by the target date of 2015.

One of the primary objectives of MDGs is to reduce and eliminate extreme poverty and hunger, two of the major problems facing most LDCs.

At the same time, he said, the United Nations is working to forge a vision for the post-2015 development agenda.

Credible and objective information on FDI can contribute to success in these twin endeavours, Ban added.

Dr. Karki told IPS the new Istanbul Programme of Action for LDCs for the Decade 2011-2020 is a slight shift from the commodity-oriented growth towards building productive capacity of LDCs in order to achieve structural economic transformation of LDCs.

Therefore, FDI inflows to LDCs would be welcome if they are targeted at the manufacturing sector, infrastructure and basic services sector such as health, water and sanitation, electricity and communications.

The key problem with FDI inflows targeting the extractive sector is that the benefits fail to trickle down, with only the multinational and transnational corporations and the recipient country’s elites minting money at the expense of the poor, marginalised and vulnerable communities, he pointed out.

“The key issue of widening inequality gap and redistribution of resources remains a development challenge,” he said. “This fact was blatant during my recent visit to Liberia and Sierra Leone – two extremely resource-rich LDCs but unfortunately, with the poorest populations.

“Given such a sad irony, our civil society partners were of the opinion that all the riches should remain in the soil/ground as they fail to ensure the right to sustainable development of the peoples anyway.”

The negative growth – particularly in Angola, Burundi and Mali – could be attributed to the political instability in these LDCs, which is not a good breeding ground for FDI.

“Having said this, it is also interesting to note that FDI inflows are high in both authoritarian regimes as well as in vulnerable governments as is the case in Africa and Asia,” Dr. Karki noted.

He said the other reason for FDI decline could be the evolving role of development-oriented governments in LDCs that are attempting to safeguard national interests and rights of peoples over profit and plunder.

“If this is truly the case, then LDC governments are in the right direction towards genuinely uplifting their populations out of the structural causes of poverty, deprivation and injustices,” he said.

The issue of sovereignty is critical in terms of respecting and complying with country systems. Otherwise, it has been proven that FDI is more of a bane than a boon for sustainable development, Dr Karki concluded.

A U.S. federal judge has upheld a key regulatory provision aimed at ensuring that the profits from products mined in central Africa are not used to benefit armed groups, particularly in the Democratic Republic of Congo (DRC).

Artisanal diamond miners at work in the alluvial diamond mines around the eastern town of Koidu, Sierra Leone. So-called ‘blood diamonds’ helped fund civil wars in Sierra Leone and Liberia, but now provide much-needed jobs as well as revenue for the government. Credit: Tommy Trenchard/IPS

Rights groups are lauding the decision, stating that the so-called “conflict minerals” provision has already led to positive impacts on the ground, both in Congo and in U.S. boardrooms.

“This is a major victory, and shows how important this rule is for holding companies to account and ensuring that they take responsibility for the impacts of their purchases,” Corinna Gilfillan, head of the U.S. office of Global Witness, a watchdog group that filed a court brief in the case, told IPS.

“This provision has generated unprecedented levels of attention towards the eastern Congo, significantly increasing scrutiny around supply chains. After all, what company wants to be associated with funding human rights violations in Africa?”

The rule, known as Section 1502 or the “conflict minerals” provision, was originally signed into law in 2010 as part of a massive piece of financial industry legislation known as the Dodd-Frank Act. Two years later, in August last year, U.S. regulators finalised details on how companies listed in the United States would be required to implement the provision.

Under Section 1502, starting in early 2013 companies using any of four minerals – gold, tin, tungsten or tantalum, widely used in modern electronics – sourced from the DRC or neighbouring countries would need to provide proof that they had carried out due diligence to ensure that these products were not benefiting armed groups.

Yet the rule immediately faced a lawsuit by powerful trade associations representing U.S. businesses and manufacturers. They claimed that the conflict minerals provision would impose inordinate costs that U.S. regulators had not fully analysed, among several other complaints.

Another Dodd-Frank provision, requiring large extractives companies to disclose any payments made to foreign governments, was struck down by the U.S. courts earlier this month.

On Tuesday, however, Judge Robert Wilkins rejected each of these contentions, finding the Security & Exchange Commission (SEC)’s economic analysis to have been “eminently appropriate”.

“Taking all of these elements of the disclosure scheme together, the Court finds a ‘reasonable fit’ between the relevant provisions of Section 1502 and the Final Rule and Congress’s objectives in promoting peace and security in and around the DRC,” Judge Wilkins wrote in a detailed 63-page opinion.

The U.S. Chamber of Commerce, one of the main litigants in the case, told IPS in a statement that it is still “reviewing the court’s decision and our options going forward. We continue to believe this rule, while well intentioned, is unsupported by the Agency’s own record.”

‘Major opportunity’

For now, Tuesday’s fairly resounding decision clears the way for full implementation of Section 1502, with no other lawsuits on the issue currently pending.

Yet despite the legal uncertainty, this rule has already led to significant action from the Congolese government as well as several major U.S. companies – including those technically party to the lawsuit.

“There has actually been a rather strong disconnect between these big industry groups and their extreme positions and what we’ve been seeing individual companies doing to comply,” Global Witness’s Gilfillan notes. “Many have not been counting on lawsuits to get them out of this, but rather have been proactively working to comply.”

The utilities giant General Electric (GE), for instance, stated in May that it “shares … a commitment to take responsibility to alleviate suffering caused by the conflict in the DRC”, and noted that while it is a member of the U.S. Chamber of Commerce, “the views and positions expressed by the Chamber are its own, and not GE’s.”

Other major electronics companies to break with the Chamber on this issue in recent months have included Microsoft and Motorola. International industry initiatives – such as the Conflict Free Smelter Programme – have likewise been started or strengthened in the aftermath of Section 1502’s passage.

“So now we’re calling on all of these companies to do everything they can to ensure that the minerals they’re using aren’t fuelling human rights violations,” Gilfillan continues. “We have a very difficult situation in eastern Congo, so we can’t afford any more delays.”

In addition, the Congolese government has sought to build on the groundwork laid by Section 1502. In late 2011, the country’s mining minister reportedly stated that the legislation offered a “major opportunity” to delink minerals and violence in Congo, which has been at the centre of natural resources-driven conflict for more than a century.

Last year, the Congolese government introduced legislation requiring companies using these minerals to undertake supply chain due diligence to ensure that the products weren’t funding rights violations. Since then, the government has suspended at least two Chinese export companies for failing to adhere to this process.

Global principles

Dodd-Frank is also catalysing broader global action on conflict minerals, with the European Union in particular currently considering adopting policies similar to Section 1502. A public consultation process on this proposal just closed, and some are expecting draft legislation by the end of this year.

But while the United States may be leading global policy in this particular area, some groups are frustrated that Washington has yet to implement nascent international guidance on the human rights-related responsibilities borne by multinational corporations.

On Wednesday, a dozen rights, development and environment groups, under the umbrella of the International Corporate Accountability Roundtable (ICAR), sent a letter to President Barack Obama, calling on him to prioritise implementation of the United Nations Guiding Principles for Business and Human Rights, passed in 2011.

During a fact-finding mission to the United States, the letter notes, a U.N. working group found “significant gaps” in the U.S. efforts to implement the Guiding Principles, as well as “little appreciation of human rights being material to the conduct of business”.

Tuesday’s court decision on Section 1502 “recognises that business has a responsibility to respect human rights, and that the government, including agencies like the SEC, can and should ensure that business operations do not negatively impact human rights,” Amol Mehra, director of the Washington-based ICAR, told IPS.

“In this regard, we are calling for the development of a government-wide approach to business and human rights, and for President Obama to use appointments to critical positions in agencies and departments to effectuate the U.S. government’s duty to protect human rights. We look forward to further engagement to ensure that precedents like the conflict minerals provision are defended, promoted and extended.”

Oil rigs and pumps. Credit: Bigstock

By Carey L. Biron
WASHINGTON, Jul 2 2013 (IPS)

A federal judge here on Tuesday struck down a key new regulatory provision that would require large U.S.-listed extractives companies to disclose payments made to foreign governments, a rule that rights groups had long pushed as a way to cut down on corruption in developing countries.

The judgement is being seen as technical, however, and could allow government regulators to tweak and re-issue the rule.

The ruling is seen as a major victory for the American Petroleum Institute (API), a lobby group that sued the U.S. government following the rule’s adoption, last August, on several grounds, including that it would force businesses to divulge proprietary secrets, impose significant costs and infringe on their Constitutionally mandated right to free speech.

“The court has vacated the SEC’s requirement that U.S. companies report competitive information that can be used against them by global competitors,” Harry Ng, API vice president and general counsel, said in a statement.

“U.S. companies are leading the way to increase transparency, but the rule would have jeopardised transparency efforts already underway by making American firms less competitive against state-owned oil companies.”

Ng points out that several major companies under the API umbrella are engaged in the Extractives Industry Transparency Initiative (EITI), a set of standards currently being implemented in around three-dozen countries. Yet the U.S. Congress had felt that the EITI standards were not strong enough (they have since been tightened), and thus mandated the SEC to come up with the extractives payment rule.

The rule is known as Section 1504, part of financial industry overhaul legislation known as the Dodd-Frank Act, signed into law in 2010. As finally adopted in August, Section 1504 requires that all oil, gas and mining companies listed on U.S. stock exchanges engage in annual, public reporting of any payments over 100,000 dollars made to foreign governments.

The rule would apply to around 1,100 companies, and disclosures would have been required starting next year.

Passage of Section 1504 was seen as an important victory by pro-transparency activists and development groups, who suggest that such transparency can crack down on rampant corruption and help to lift the “resource curse” in some resource-rich, governance-poor developing countries, particularly in Africa.

“Needless to say we are incredibly disappointed with this decision, particularly given that the United States has been a leader on this issue through the passage of Section 1504,” Jana Morgan, a Washington campaigner with Global Witness, an advocacy group, told IPS.

“We are now seeing similar initiatives in the European Union and Canada, with transparency in resource payments becoming the new paradigm and the new standard for best business practices.”

Senator Ben Cardin, who co-authored Section 1504, similarly expressed concerns over the potential broader effects of Tuesday’s court decision.

“The U.S. has been at the forefront of the transparency fight, and this decision will delay implementation of vital transparency rules,” Cardin said in a statement.

“Congress was clear in the letter and the spirit of the law that this information should be in the public domain. It’s unfortunate that the court believes that company disclosures to the SEC should remain hidden.”

‘Substantial errors’

The court’s decision revolves around the SEC’s interpretations of the law originally handed down by Congress. In this context, the judge ruled that the SEC had overreached the Congressional mandate in two important ways.

First, the commission’s rule required that company reports on this issue be made public, rather than publishing only, say, summaries of the reports. API-aligned companies had stated in court that changing this element would have cleared up most of their concerns over Section 1504.

Second, the rule did not offer any exemption for companies operating in countries where national laws disallow any such disclosure – Angola, Cameroon, China and Qatar are the four at issue in this case, though this is disputed by transparency advocates.

“The record of comments to the SEC shows clearly that no one has yet correctly identified a single country where Section 1504 disclosures would come into conflict with local laws,” Heather Lowe, director of government affairs with Global Financial Integrity (GFI), a Washington watchdog group, said in a statement on Tuesday. GFI has estimated that illicit financial flows cost developing countries a trillion dollars a year.

Yet companies say Section 1504’s lack of an exemption for national rules would force them to pull out of certain countries, resulting in massive economic costs.

U.S. District Court Judge John D. Bates noted these two points constituted “substantial errors … the commission misread the statute to mandate public disclosure of the reports, and its decision to deny any exemption was, given the limited explanation provided, arbitrary and capricious.”

Because Bates had already struck down the rule based on these two points, he did not offer a decision on the remaining arguments, including the issue of constitutionality. The decision now sends the issue back to the SEC to refashion a new rule, unless the commission moves to appeal the judgement to a higher court.

Contacted by IPS, John Nestor, an SEC spokesperson, said only that the agency is reviewing the decision.

Towards re-enactment?

While rights groups here and internationally are expressing disappointment over the decision, they are noting that the judgement leaves intact significant components at the heart of Section 1504.

“We strongly disagree with the court findings, but that said, the court hasn’t precluded the possibility that the rules will be re-enacted in the same form but with a stronger justification,” Gavin Hayman, the London-based director of campaigns for Global Witness, told IPS.

“Further, we note that nothing in the decision blocks the SEC from requiring public reporting or allows for exemptions from reporting. The oil industry has never been able to clearly show the existence of host country prohibitions against payment disclosure.”

Similar points were made Tuesday by the Washington office of Oxfam America, a humanitarian group that filed a court brief in support of the SEC in this case.

“Nothing in the decision says that the SEC may not require public reporting or deny exemptions – it just says that the SEC needs to use its discretion and provide a fuller analysis,” Ian Gary, Oxfam’s senior policy manager, said in a statement to IPS.

“We disagree with the court’s analysis of the SEC’s justification for not providing reporting exemptions. Despite the court’s conclusions, the SEC balanced the potential costs and benefits of granting exemptions.”

Gary also noted the court’s refusal to rule on the API’s free speech-related argument, but suggested that the judge “did recognise that the Supreme Court has upheld public disclosure requirements as an appropriate approach to regulation.”

An open pit copper mine. Credit: Bigstock

By Carey L. Biron
WASHINGTON, May 16 2013 (IPS)

Trillions of dollars a year are being produced through extractive industries, but just a tiny percentage of this money is impacting on the lives of poor communities in developing countries, according to a first-of-its-kind study released Wednesday.

The revenues being produced by exploiting natural resources in developing countries already massively outweigh development-focused foreign aid flows. But according to new research from the Revenue Watch Institute, a global watchdog group, there is a startling correlation between economic dependency on natural resources and low human development indicators."Clearly, 2.6 trillion dollars has major transformative potential." -- Daniel Kaufmann of the Revenue Watch Institute

“The 58 countries [studied] produce 85 percent of the world’s petroleum, 90 percent of diamonds and 80 percent of copper. Profits from their extractive sector totaled more than $2.6 trillion in 2010,” according to Revenue Watch’s new Resource Governance Index, unveiled here Wednesday.

“Revenues from natural resources dwarf international aid: In 2011, oil revenues for Nigeria alone were 60 percent higher than total international aid to all of sub-Saharan Africa. The future of these countries depends on how well they manage their oil, gas and minerals.”

Of those 58 countries, more than 80 percent have reportedly failed to put in place satisfactory standards for openness in these sectors – and half haven’t even taken basic steps in this regard.

Revenue Watch analysts say the findings constitute a “striking governance deficit”. While such problems have been widely known on an anecdotal basis, this is the first time these issues have been systematically disaggregated and compared.

“The index is a real wake-up call about how far we still have to go in managing public resources effectively and for the betterment of poor populations around the world,” Warren Krafchik, director of the International Budget Partnership, a Washington-based project that works to strengthen civil society involvement in public budgeting, told IPS.

“Particularly now after the global financial crisis, this data shines a big spotlight on how, while resources can still be transferred from the Global North to the South, the fact is that the South is sitting on really substantial resources of its own. The challenge is how to use those effectively.”

The new data highlight a real opportunity to do something “fundamental” about global poverty, Krafchik notes.

“It’s really not the amount of public resources that’s available that’s the primary obstacle to overcoming extreme poverty,” he says. “The issue is how those resources are managed and distributed.”

Similarly, several analysts are suggesting the data could influence discussion on the new international development agenda following the expiration of the Millennium Development Goals (MDGs) in 2015.

“We’re talking about real money here – foreign aid can be used as leverage, but the domestic resources issue is absolutely key,” Daniel Kaufmann, president of the Revenue Watch Institute, told a Washington audience Wednesday.

“Clearly, 2.6 trillion dollars has major transformative potential in terms of translating these natural resources riches into human capital. Further, oil-rich states are three times less likely to democratise than are the non-oil-rich, so this matters from a political standpoint, too. This is the development challenge of the decade.”

No resource curse

In terms of extractives governance, particular problems appear to be concentrated in northern and southern Africa and the Middle East. Latin America, on the other hand, is seen as generally doing better, with Brazil, Mexico, Chile, Colombia and Trinidad & Tobago all ranked in the top 10.

The index is topped by developed countries, with Norway, the United States (though only regarding its extractives work in the Gulf of Mexico) and the United Kingdom the only countries rated satisfactory on all indicators. Australia and Canada (though only its sector in Alberta) are also in the top 10.

However, the governance findings are more complex, and more interesting, than a simple breakdown of poor versus rich countries. Kaufman says the data rejects “the tired notion of the deterministic ‘resource curse’”.

“The silver lining here is that there’s variation – a number of countries have satisfactory performance, and those are in diverse contexts, including in emerging economies,” he notes.

“Among those that perform poorly are some very rich countries, particularly in the Gulf. Just being rich isn’t necessarily an indication that a country is performing well, and being a developing country isn’t a rationale for doing poorly.”

While many are suggesting that the new index will provide an important tool for identifying country-level problems, debate remains over how to rectify these issues. While political will in affected countries will clearly be a paramount factor, potential roles for the international community are less clear.

According to numbers offered at a panel discussion here on Wednesday, foreign assistance won’t necessarily offer significant leverage towards greater compliance.

“Of the 46 countries with below satisfactory levels on this index, just six have external assistance levels greater than five percent of gross domestic product, and only three are higher than 15 percent,” George Ingram, a senior fellow at the Brooking Institution, a think tank here, said, suggesting this route of influence is a “dead end”.

“However, that money can be used to enhance the performance of government capability … For instance, on taxation, there is a new movement of acknowledging that we need to help developing countries develop their capacity to develop their own revenues.”

Over the past decade, international discussion on natural resources governance has coalesced around a set of standards known as the Extractive Industries Transparency Initiative (EITI). According to the EITI website, 21 countries are currently considered compliant with the initiative, while another 16 are pending candidates.

Yet EITI is still codifying its standards, and several EITI-compliant countries fared poorly on the new Governance Index. Advocates are particularly calling for the inclusion of contracts in the EITI transparency requirements, and several such major reforms will be discussed next week at an EITI board meeting in Australia.

Revenue Watch and others say the most potent role in ensuring government accountability in this regard will fall to national-level civil society.

“Control over resources traditionally meant power, and the incentives for politicians to give that up are really low,” Carlos Pascual, a U.S. State Department official, said Wednesday.

“You have to create different incentive structures, and changing that equation will have to strengthen the role of civil society and the political processes by which pressures can be brought on politicians to link their ability to stay in government with how they manage the resource base. We’re at the very beginning right now on thinking about what the best models may be … but at least we’re starting to have that discussion.”

Lobby groups representing the oil industry filed a lawsuit in Washington court on Wednesday that seeks to halt the implementation of a new set of rules requiring U.S.-registered extractives companies to disclose all payments made to foreign governments.

The move drew strong reaction from the bipartisan duo that sponsored the rule, with senators Ben Cardin and Richard Lugar blasting the lawsuit as “expected” and “frivolous”.

“The U.S. economy and our values substantially benefit when our companies are working in oil, gas and mineral-rich states,” Senator Lugar said Thursday. “But the benefits will not be realised if investments serve to entrench authoritarianism, corruption and instability. With oil prices high and volatile, our economy needs more transparent markets, not less.”

The new rule, known as Section 1504, is part of a suite of new economic regulations, passed in 2010, known as the Dodd-Frank Act. Section 1504 was approved in late August by the U.S. government’s primary finance regulator, the Securities and Exchange Commission (SEC), following nearly a year of delay and behind-the-scenes wrangling.

Its passage, by a 2-1 vote, has been seen as an important victory by pro-transparency activists, who suggest that the new rules can help to lift the “resource curse” in some resource-rich, governance-poor developing countries.

“Oil companies and industries lobbied heavily against this provision, and were likely disappointed when the SEC came out with strong final rules,” Jana Morgan, with Global Witness, a watchdog, told IPS. “People have to ask themselves what these oil companies are trying to hide. The oil industry needs to stop supporting secrecy and move towards transparency.”

Section 1504 would require around 1,100 oil, gas and mining companies to disclose payments of more than 100,000 dollars made to foreign governments during the course of developing commercial projects. Supporters say the new rule will cut down on corruption and do more to ensure that U.S. capital does not support fraudulent and authoritarian regimes.

“We are greatly disappointed that the oil industry is trying to use the courts to bully the SEC and push for secrecy in their payments to governments,” Ian Gary, a senior policy manager with Oxfam America, a relief group, said Thursday.

“We call on companies, such as BP, Exxon, Chevron and Shell, who are hiding behind industry associations to do their dirty work while espousing transparency rhetoric, to disassociate themselves from the lawsuit.”

In e-mails to IPS, Chevron stated that it supports the recent litigation, while BP declined to comment.

Undue burden

The American Petroleum Institute (API), which filed the lawsuit (available here and here) together with the U.S. Chamber of Commerce, the country’s largest industry lobby group, and other business groups, is arguing that the SEC failed to carry out a thorough analysis of the costs and benefits of enforcing Section 1504, which it says would place an undue burden on U.S. companies.

Although a new report by the nonpartisan Government Accountability Office found the SEC’s analysis to have been sound, the SEC has conceded that the new rule could cost companies at least a billion dollars at first and up to 400 million dollars thereafter to comply. But the lawsuit says the SEC underestimates these costs, suggesting that the ultimate price for U.S. companies would be far higher due to lost competitiveness.

“American oil and natural gas companies must compete against foreign, state-owned oil companies for access to resources around the world,” Karen Herbert, with the U.S. Chamber of Commerce, said Thursday. “The SEC’s ‘extraction rule’ will require them to turn over their playbooks for how they bid and compete.”

Indeed, disclosing such payments is specifically forbidden in certain countries, and the lawsuit complains that the SEC has included no exemptions for such cases.

According to the API’s president and CEO, Jack Gerard, API member companies “strongly support payment transparency” and have done so “for a decade”. On Wednesday, he touted ongoing efforts to work with the U.S. government in implementing a programme, currently in 36 countries, called the Extractive Industries Transparency Initiative (EITI), which Gerard says “would more effectively increase transparency without harming competitiveness”.

Yet according to Global Witness’s Morgan, the idea that compliance with Section 1504 would be tantamount to giving away company secrets is a “red herring”, as most of these companies are already required to make similar payments disclosure through EITI. “So, it’s blatant hypocrisy for these companies to say they don’t want to reveal payments.”

The difference between these systems is that EITI relies on member countries to provide information, despite the fact that many resource-rich countries – for instance, Angola – are not party to the agreement.

Section 1504, on the other hand, would put the onus on the companies themselves to provide this information, thus offering a much broader reach. (Citing the “hot potato” nature of the lawsuit and indicating that the EITI board is currently split on the issue, an EITI spokesperson declined to comment.)

Confidential disclosure?

Still, API has suggested that the entire rule might not need to be tossed out.

“With reasonable changes, the SEC could have achieved the goal of increased transparency while also remaining faithful to its core mission to protect American investors,” API’s Gerard says. “The rule should allow our companies to report their payments confidentially to the SEC and allow the agency to aggregate that information and publicly report payments by country.”

But Morgan says the idea of confidential disclosure is an “oxymoron”.

She notes that one of the most important reasons for passing Section 1504 was specifically to allow investors to understand the risks of their investments, to know how extractives companies are operating in unstable regions – a sentiment publicly backed by several high-profile investors, including George Soros and Bill Gates.

The rule’s aim is also to allow locals in developing countries the opportunity to hold their government to account for how they’re using money from multinational companies – much of which, watchdog groups say, is siphoned off in resource-rich developing countries before it can be used for development or social expenditure.

But such goals would be undercut by confidential disclosure of payments, which would not offer additional information for use by either investors or local communities.

“Some companies, including Talisman Energy, Statoil, AngloGold Ashanti and Newmont Mining, already disclose payments in every country of operation and in some cases they volunteer this information at a project level,” says Oxfam’s Gary. “If transparency truly hurt their bottom line, they simply wouldn’t be doing it.”

Likewise, Senator Cardin noted Thursday: “Increased transparency will not put companies that comply at a competitive disadvantage but it will reduce the risks for U.S. investors and it will allow citizens in resource-rich countries to hold their leaders accountable.”

Children exposed to mining industry pollution in Peru. The debate on mining is raging throughout Latin America. Credit:Milagros Salazar/IPS

By Carey L. Biron
WASHINGTON, Sep 27 2012 (IPS)

New research from Oxfam, an international aid agency, finds that some of the largest multinational oil and mining companies are increasingly incorporating principles of community consent into their day-to-day operations.

Oxfam’s researchers looked at 28 of the world’s largest extractives companies and combed through their publicly available commitments to addressing the issue of community rights. They used the information to come up with a ranking – the Community Consent Index – that, coupled with a similar report from 2009, can now be used as baseline data.

The report does not rate the implementation of these policies, however, and its selection does not include any companies that have not specifically and publicly set out policies or positions on community engagement. Rather, Oxfam says that the index is supposed to incite and inform dialogue going forward.

“Community consent has been a very slippery concept over the years, and having a (preliminary) framework … is a really important start,” Raymond C. Offenheiser, president of Oxfam America, said in unveiling the new paper here in Washington on Wednesday.

“In order for oil and mining companies to survive in the coming decades, they need to transform themselves from primarily resource extractors to development partners. Companies that fail to implement the policies will be at a competitive disadvantage.”

Over the past three decades, the turnaround in the industry’s view on community engagement – at least insofar as the top players are concerned – has indeed been striking.

It was only in the early 1980s that the World Bank began discussing environmental impact, assessment of which is now required on virtually all foreign- or donor-funded projects in the world. Recent years have also seen international covenants on the rights of indigenous peoples over their traditional lands.

“Where are we today?” Offenheiser asks. “Admittedly, controversies still exist. But now we talk about ‘host communities’ rather than ‘drilling sites’, about a ‘shared-value approach’ that assumes that there is a connection between communities and companies. These would not have been on the agenda 30 years ago.”

In that time, local communities and civil society activists have become increasingly vocal and empowered in asserting their rights. In turn, this has both led to and been backed up by a raft of new international conventions as well as policies within international financial institutions, most notably the International Finance Corporation, the private-sector arm of the World Bank.

In recent weeks, both the United States and the European Union have also moved forward on legislation that will vastly increase transparency regulations in the extractive industries, specifically with an eye to how those industries affect communities on the ground.

“That said, it’s important to recognise that advancing this discussion is more critical than ever – I think we’re living in a moment of urgency,” Offenheiser cautions. “Due to the current explosion in the demand for natural resources … companies are extending their reach into remote and sensitive areas. This issue has to be raised by civil society organisations, business and government in ways that it hasn’t been in the past.”

How dopey?

“Why are companies doing this, and why are investors interested in us doing this?” Chris Anderson, with the mining giant Rio Tinto, one of the companies included in the new report, asked at a panel discussion on Wednesday.

“The simple answer is we’re not going to have any business otherwise. If you don’t adequately consult with a community and they don’t want an aspect of your project, you just don’t have a project and therefore you may not have a business.”

Among upper-level management in the sector, Anderson says that the realisation that communities “can become full, proper partners in the development of these projects” has set in only within the past decade. Now, however, he says “We’ll think back in five or 10 years, on the company side, and think, ‘How dopey could we be?’”

While lauding the new report, he also warns that Oxfam’s selection of companies has “skewed” its findings.

“You’re not looking at the worst actors, and there are plenty still around,” Anderson says. “We need to raise the bar … we’ve come a long way, but we have a long way to go to operationalise the notion of consent.”

Indeed, while Oxfam’s findings highlight optimistic trends overall, even such “skewed” results show that the discussion is still in its early phase.

Of the 28 companies, Oxfam’s researchers found that two-thirds have incorporated provisions of community consent, social license or broad community support into their development activities. Thirteen have either directly or indirectly (by agreeing to comply with various international agreements) said they would operate under the directives of free and prior informed consent (commonly referred to as FPIC).

All but two of the 28 companies reference the Universal Declaration on Human Rights in their public websites and annual reports, and all but five publicly commit to the rights of indigenous people. While about half of the companies commit to minimising involuntary resettlement, fewer have actual policies on resettlement and just two have made those policies publicly available.

“It’s clear that companies are now paying attention to the impact on communities – it’s standard practice now for the vast majority to have a human rights policy,” one of the report’s authors, Marianne Voss, said at the discussion on Wednesday.

Still, she reports, some companies are using “qualifiers that weaken the weight of their commitments”. Others say they will apply the principles of free and informed consent only where local law requires it or where governments have implemented it.

Nonetheless, she and others suggest, the direction of the discussion seems to be moving in one direction.

“Raised marks indicate that international investment can play a vital role in poverty reduction and development and, if done correctly, can be a good partnership between communities and business,” she says.

“While few extractive companies currently go as far as explicitly committing to FPIC, they’re going to be under increasing pressure to adopt them in the future. The growth of the minerals sector in developing countries and the fact that they’re going into more sensitive areas is going to broaden the demand moving forward.”