Project Assistant, Access to Information Programme, CHRI
Ironically, resource rich countries in the world are also amongst
the most underdeveloped. In the Commonwealth for example, Nigeria,
Cameroon in Africa have large fossil fuel reserves and PNG, Solomon
Islands and Vanuatu in the Pacific have abundant forest and/or
mineral resources. Access to natural wealth has, however, failed
to translate into higher or more equitable standards of development.
Too often, profits accrued from the development of countries
natural resources have not flowed back to reinforce and strengthen
the economies and communities that generated them.
The world over, loss of traditional rights of access to natural
resources, coupled with the inequitable distribution of profits
from their sale have been at the heart of conflicts and rights
The Report of
the UK Commission for Africa, released in March 2005, offers some
important insight into this problem, placing particular emphasis
on the need for transparency in the allocation, distribution and
management of natural resources such as oil, natural gas and forests.
It is a well-accepted
fact that lack of transparency in the management of natural resources
has contributed to vast numbers of people being denied access
to revenue and development benefits that should
rightly have accrued to them. Increasingly, it has been recognised
that the complicity between governments and MNCs in encouraging
inequitable resource distribution has been at the root of the
problem. MNCs bid to win tenders and contracts from governments
who often are only too willing to bring them in to extract their
natural resources. But the systems that facilitate such deals
are notoriously opaque. In the absence of effective oversight
and monitoring mechanisms the actions of governments and the corporate
world too often go unaccounted - as do vast sums of money. There
are many examples in the Commonwealth which bear this out.
Although the largest oil and gas producer in Africa, in 2004,
Nigeria was ranked a poor 151 out of a total of 177 countries
in UNDPs Human Development Index. Massive corruption in
natural resource management by the government and the oil companies
has robbed Nigerians of the benefits of development. Most memorably,
in 1995 the international community was stunned by the execution
of Nigerian activist Ken Saro Wiwa by the Nigerian Government
after Wiwa spoke out against the oil mining activities of Royal
Dutch Shell Oil in the Niger Delta. A 2005 Human Rights Watch
briefing paper estimated that the infighting in the region has
led to serious human rights abuses.
Guinea: Spread over
almost three quarters of the island nation, the tropical forests
of PNG have long been witness to indiscriminate exploitation.
Due to a strong nexus between logging companies and the political
elite, shady deals remain veiled. For example, in 2002, the Ombudsman
Commission finalised a three-year investigation into the Governments
decision to award a lucrative logging concession to Rimbunan Hijau,
a Malaysian company with a notorious history in the region. The
Commissions findings revealed the poor human development
record of the company in its operating region and its failure
to comply with its contractual obligations. A Green Peace study
identifies that the company and its subsidiaries control more
than 50% of PNGs large scale commercial logging operations
and in 2002 exported logs worth more than US$ 50 million from
Nauru is a chilling testament of the immense havoc caused by the
mismanagement of natural resources by governments and large corporates.
At one time the small population of around 10,000 people enjoyed
one of the highest per capita incomes in the world. However, reckless
devastation of the countrys environment and massive corruption
in government has brought Nauru to the brink of extinction. In
1968, the Nauruan Government won compensation for the decades
of mining that had preceded Naurus independence, getting
settlements from Australia, New Zealand and the UK worth tens
of millions of dollars. This money has almost entirely been frittered
away in investments in dozens of Nauruan offshore holding companies,
which under Nauruan laws are allowed to function in complete anonymity
making the tracking of assets practically impossible. The personal
stake of government officials in many of these companies has made
accountability a non-issue. Individually worth nearly USD$ 500,000
at the time of independence, today Nauruans are facing along with
a loss of their livelihood, their identity and their nation.
In the coming
years, as natural energy reserves dwindle, the scramble for resources
will accelerate. As governments search for new sites from where
to source fossil fuels, the danger to developing economies
from the mismanagement of finite resources coupled with wasted
and/or stolen revenue from corruption is all too real.
Key to ensuring
sustainable management and equitable distribution of natural resources
is transparency. Entrenching a legal right to information is a
key mechanism for tackling corruption by fostering an environment
which is pro-transparency, pro-democracy and ultimately pro-people.
The right to information
is ordinarily premised on the publics right of access to
government held information. In the context of extractive industries
however, the right to information has been effectively implemented
to require governments to proactively publish the details of tenders
and contracts entered into with corporations involved in natural
resource extraction, as well as more general information about
negotiations and revenues earned.
The G-8 Declaration
on Fighting Corruption and Improving Transparency (2003), EU Transparency
Directive (2004) and the Transparency Compacts between G8 and
developing nations at the Sea Island Summit (2004) are some of
the efforts that reflect growing commitments by governments to
openness in the extractive industries sector, with a focus on
making transparent details of public budgets, revenues, government
procurement and payments. Most notably, in 2001 the World Bank
launched the Extractive Industries Review (EIR), a stakeholder
and civil society consultation directed at drafting a set of recommendations
to guide the involvement of the World Bank Group in the extractive
industries sector. In 2003 the EIR published its report with recommendations
for the World Bank to consider. The World Bank Management Group
responding positively to the report has affirmed that in the future
the Bank Group will require transparency as a condition
for new investments in EI [Extractive Industries] in line with
our support of the EITI [Extractive Industries Transparency Initiative].
For new large projects we will require transparency immediately
to ensure that revenues are properly and transparently accounted
for; for new smaller projects, we will expect it within two years.
The Publish What
You Pay Campaign (PWYP) was launched in 2002 by the Open Society
Institute in collaboration with other NGOs. It is a civil society
initiative which encourages and monitors the disclosure of information
on contracts, payments and the like by governments, corporations
and funding agencies like international financial institutions.
The Campaigns main agenda is to get multinational oil, mining
and gas companies to publish details of the payments they make
to states in the developing world.
Industries Transparency Initiative
The EITI is a
positive example of how the push for transparency in natural resource
management has been implemented in practice. Responding to the
growing need for transparency in extractive industries due to
massive corruption and illegal exploitation in the sector, in
2002 the EITI was launched by UK Prime Minister, Tony Blair, at
the World Summit on Sustainable Development in Johannesburg. The
initiative has been spearheaded by the UK Department for International
Development and has the active involvement of the World Bank Group.
restricted to extractive industries such as oil, gas and mining,
there is growing pressure that the principles of EITI should be
extended to other natural resource sectors like forestry and fisheries.
Within the Commonwealth, countries that have signed up to the
EITI include Nigeria, Trinidad and Tobago, Ghana and most recently
Cameroon. In these countries, this nascent initiative is already
Involvement in EITI
gold, diamond, bauxite and manganese mines, in 2003, Ghana announced
its decision to join the EITI. In the same year, the Mineral Commission
began releasing its revenue figures, production data, company
receipts etc to national newspapers. Meanwhile an Interim Management
Committee (ICM), a multi-stakeholder steering committee of government
and civil society representatives, has been formed to oversee
implementation of the EITI. Reporting guidelines and templates
have already been designed for companies and the government.
Nigeria also committed to the EITI in 2003. Nigerias work
in this area includes amongst other things an independent audit
of revenues and payments in Nigerias extractive industry
and the publication of all data and information an audit of the
oil sector. A draft EITI bill was submitted to the National Assembly
in early 2005, to be passed as a law.
and Tobago: With most of its income accruing from oil
and natural gas, in Trinidad and Tobago the EITI was introduced
in January 2005. Implementation is too new to be able to draw
conclusions about the effectiveness of EITI efforts, but it is
a positive step forward for the Caribbean that the country has
taken the lead in signing up to this important initiative.
initiatives like the EITI are however hampered by their voluntary
nature. The EITI enforces mandatory disclose only after a country
has agreed to be bound by its principles. It is imperative that
resource rich countries in the Commonwealth are strongly encouraged
by their public and their peers to sign up to the
EITI, as the best means of ensuring their economic futures.
Only the Beginning
natural resources in trust for the people whom they are elected
to serve. It is their responsibility to ensure that the benefits
of the development of these resources are distributed equitably
across society and not merely to facilitate individual interest.
Just the new push for corporate social responsibility recognises
that it is no longer conscionable to argue that profits should
come before people.
could consider entrenching the benefits of these initiatives by: