Will mining lead Haiti to a brighter future? Photo: Liz Lucas / Oxfam America, outside Port-au-Prince

Haiti has $20 billion in gold reserves, of course with some disputing these estimates. Whether these reserves end up helping the country out of poverty or worsening its already intense socio-economic problems will be determined by how the Haitian government manages competing concerns about mining development.

I was in Haiti last week to participate in two forums about the future of the mining industry in the country. Although Haiti is at a very early stage (currently there are no operating mines), it was obvious that the industry is already provoking intense passions on all sides.

The Haitian government and the World Bank convened the first conference I attended in Port au Prince. It featured the usual World Bankish combination of bureaucrats, corporations, Bank officials, academics and lawyers. Haiti’s Prime Minister Laurent Lamothe also made an appearance, along with precisely zero representatives of Haitian civil society (as is often the case with Bank-sponsored events of this type). International civil society was limited to an appearance by Oxfam America’s feisty Haiti associate country director Yolette Etienne on a Davos-style comfy chair panel. She stressed the importance of addressing the governance and environmental challenges posed by mining, including protecting the country’s already fragile water resources, which Haiti’s rural farming communities depend on for their livelihoods.

The second forum I attended, aimed at supporting the public debate on the potential risks and benefits of mining to Haiti, was far livelier. It took place in the northern town of Limonade and Oxfam helped sponsor it with the National University of Haiti. There, too, we heard from Haitian government, academics and Newmont Mining (which has exploration areas across nearly the entire northern half of the country), but also from community leaders and Haitian civil society, notably PAPDA, the Haitian Advocacy Platform for Alternative Development, an Oxfam partner. Oxfam also invited partners from Guatemala, the National Coordination of Indigenous Peoples and Campesinos (CONIC) and Madre Selva, to speak about the environmental and social problems mining has caused in that country. Passions ran high at various points and debate flew fast and furious past my head in Haitian Creole. At one point, a consultant working for the Haitian government stormed out of the meeting after being sharply challenged by community representatives who alleged that the industry has already damaged their lands without adequate compensation.

Mining development in Haiti is clearly on the minds of civil society, policy-makers and, of course, mining companies. What is also clear after my week in Haiti is that the government, by the admission of several representatives with whom I spoke, has nothing like the capacity that will be needed to effectively regulate mining. Haiti has pretty much every governance challenge you can have, ranking near the bottom on nearly every governance-related indicator. It’s hard to imagine how dumping mining on top of those challenges, at least at the moment, would do anything more than make these problems even worse.

The good news is that the government appears to be aware of these challenges. It recently cancelled all current mining licenses, pending a review of contracts signed by the previous government and revision of its mining law (which dates from 1976). This may create some breathing space for the government, with help from donors, to address its capacity issues. It may also provide time for Haitian civil society to build its own capacity and further organize.

As I’ve written previously, Haiti could take some steps now that could help it avoid some of the worst impacts of the “resource curse.” It must be said, though, that past efforts to build government capacity at the same time a new extractive industry develops, as was the case in Chad, don’t inspire much confidence. If Haiti’s economic development is the primary goal here, and given the country’s multiple governance and environmental challenges (severe water contamination, deforestation, vulnerability to earthquakes and hurricanes among them), there’s a heretical notion to some that should seriously be considered.

Leaving the gold in the ground is an option.

If you’re in the oil business and trying to hide your payments to host governments, last week was a rough one.

Most notably, on Wednesday the European Parliament overwhelmingly approved new European Union legislation that requires oil, gas and mining companies to disclose their country and project level payments in every country of operation. The final tally was 657 for and 17 against. This broad backing of payment disclosure from across the political spectrum was a stinging defeat for Shell, BP and other companies who lobbied European member states and European Members of Parliament. They failed to weaken the final provisions in the Transparency and Accounting Directives that will bind companies in Europe to the same standards as those who report to the US Securities and Exchange Commission as a result of the “Cardin-Lugar” or Section 1504 provision in the 2010 Dodd-Frank Act.

The European Parliament vote approves the political agreement reached in April after long negotiations between the Parliament, European Commission and member states of the European Council. Importantly, the new European requirements contain no reporting exemptions—a clear sign that member states and parliamentarians were unconvinced that alleged host government prohibitions exist. (Oil companies have alleged that such prohibitions exist, but have not been able to provide a single example to the public or the court.)

Also on Wednesday the Canadian Prime Minister Stephen Harper, a conservative politician, said Canada would move to adopt mandatory disclosures for oil and mining companies raising capital in that country. The announcement, coming days before this week’s G8 meeting where the UK hosts have made extractive industry transparency a priority, was warmly welcomed by Oxfam Canada and other groups. The Harper government announcement was quickly followed by the publication Friday of a framework for mandatory reporting developed through a roundtable process by the Mining Association of Canada, the Prospectors and Developers Association of Canada as well as Publish What You Pay Canada and Revenue Watch Institute. The framework recommends no exemptions for future Canadian requirements in line with Dodd-Frank and EU rules.

To make matters worse for those companies who want to hide the truth, even Switzerland, a country not known for financial openness, are backing mandatory disclosures. After a motion was passed by the Swiss Parliament last week calling on the government to require disclosures by extractive companies and commodities traders, the Swiss governments said it would approve this approach. (Switzerland is home to, among others, the giant commodity trader and miner Glencore Xstrata as well as oil trading firm Vitol.)

These events in the European Parliament, Canada and Switzerland represent huge breakthroughs in the battle for transparency. Oil companies who are pursuing litigation to try to overturn the Dodd-Frank provision and weaken the SEC rule are now being overtaken in their secrecy fight by real world events.

During oral arguments on June 6^th in the American Petroleum Institute vs. Securities and Exchange Commission case, the District Court judge seemed to express skepticism regarding industry claims that they have a First Amendment right to keep payments secret. Judge John Bates said there are “oodles and oodles” of situations where the government has compelled disclosure requirements in all sorts of regulatory contexts that have not merited heightened protection under the First Amendment. Oxfam and SEC lawyers pushed back strongly on industry arguments.

Rather than dropping the lawsuit (take action to call for this here), which former UN Secretary General Kofi Annan has called a “strategic folly”, companies such as Exxon, Shell, BP and Chevron have said in letters to the Publish What You Pay coalition that they continue to back the US litigation. Too bad for Shell and BP that they’ll now have to disclose in the EU as well.

All-in-all it was a very bad week for oil industry secrecy-mongers, but a great week for citizens in resource-rich nations who have a right to know how much their governments are being paid for resources extracted from their lands.

Emily Greenspan is an extractive industries policy and advocacy advisor with Oxfam America.

Last week the International Council of Metals and Mining (ICMM) released a new mining and indigenous peoples position statement requiring its 22 member companies to integrate Free Prior and Informed Consent (FPIC) into their practices around engagement with indigenous communities. ICMM is an industry association aiming to promote sustainable development in the mining sector. While certain provisions weaken ICMM’s statement, overall ICMM’s commitment to FPIC reflects a gradually turning tide which began to pick up momentum in 2011, when the World Bank’s International Finance Corporation (IFC) announced a similar FPIC requirement. Increasingly, companies are recognizing FPIC as a fundamental aspect of human rights due diligence that can help to create shared value for companies and communities and mitigate the risk of social conflict down the road.

San Andres gold mine in Honduras. Photo: Edgar Orellana / Oxfam America

ICMM’s commitment to FPIC is an important step, demonstrating that the mining industry is beginning to recognize that the terms of the debate have shifted. No longer should companies be discussing whether they need to consult communities, but rather whether and how they can ensure community consent. Indigenous peoples’ organizations (along with Oxfam and others) have worked many years to encourage the industry to embrace FPIC, and ICMM’s commitment will be useful to promote accountability among ICMM members and to encourage more companies to follow ICMM’s lead.

With its new position statement ICMM requires member companies to begin incorporating FPIC into their practices in over 800 project sites around the world, with commitments coming into full effect by May 2015. ICMM describes FPIC as both a process and an outcome and states:

The outcome is that Indigenous Peoples can give or withhold their consent to a project, through a process that strives to be consistent with their traditional decision-making processes while respecting internationally recognized human rights and is based on good faith negotiation.

Importantly, the statement recognizes that negotiations should be carried out in good faith and that in certain circumstances indigenous peoples may choose to withhold their consent to a project. The statement applies FPIC both to new projects and changes to existing projects likely to have significant impacts on indigenous peoples.

However, some of the FPIC language later in the policy could create confusion for companies. For example, the statement references a 2008 guidance document from the UN’s Department of Economic and Social Affairs which states that “neither Indigenous Peoples nor any other population group have the right to veto development projects that affect them,” so FPIC should be considered a “principle to be respected to the greatest degree possible in development planning and implementation.” ICMM does not elaborate on the difference between “withholding consent” and “veto.” Nor do they reference more recent guidance from the UN on FPIC which states, “Consent is a freely given decision that may be a ‘Yes’ or a ‘No,’ including the option to reconsider if the proposed activities change or if new information relevant to the proposed activities emerges.”

ICMM generates further ambiguity by stating: “In balancing the rights and interests of Indigenous Peoples with the wider population, government might determine that a project should proceed and specify the conditions that should apply. In such circumstances, ICMM members will determine whether they ought to remain involved with a project.” Effective FPIC implementation requires that companies be willing to respect the decision of indigenous communities regarding whether a project should be developed regardless of a government’s interest in pushing ahead.

Finally, ICMM limits the FPIC requirement to projects that impact indigenous peoples. However, community consent is also emerging more broadly as a principle of best practice for sustainable development in any community. Oxfam recognizes that FPIC is a right in international law specifically for indigenous peoples, but also believes that all communities affected by oil and mining projects must be able to participate in effective decision making and negotiation in processes that affect them.  When they say “no” to a project, companies and governments need to respect this.

As with all of the new policies I’ve written about in previous blogs (IFC, Peru’s Indigenous Peoples Consultation Law, and individual oil and mining company policies), the true test will be in implementation. ICMM’s members must prioritize good faith engagement and respect indigenous peoples’ decisions with regard to oil and mining project development. If policy commitments fail to move beyond mere lip service, rights violations will continue and the risks of violence and social conflict will only increase.

Sandra Ascencio of the Justice Office of Peace and Integrity of the Creation Order of Young Friars in El Salvador. Photo: Jennifer Lentfer / Oxfam America

Sandra Carolina Ascencio has worked for more than ten years to protect the health of her people and her county of El Salvador from mineral mining, which is one of the most environmentally-destructive industries on the planet. Nowhere is this more apparent than in El Salvador where runoff from mining operations has polluted the San Sebastian River with dangerous levels of cyanide and iron.

As a member of the National Roundtable on Metallic Mining in El Salvador (La Mesa), Ascencio was part of a group of community activists from El Salvador who participated in a speaking tour in Canada and the US in March and April, entitled “Water is More Precious than Gold.” They shared stories from the frontlines and the ways in which the mining industry is bullying their way into Latin American communities. As part of the speaking tour, Ascencio appeared on an Oxfam-sponsored panel on land, natural resources, and food justice during Ecumenical Advocacy Days in Washington DC.

Ascencio serves as a pastoral agent with the Office of Justice, Peace and Integrity of the Creation of the Order of Friars Minor, supporting parish communities and environmental and human rights educators throughout El Salvador. Oxfam was fortunate to have Ascencio share her experiences with us in our offices.

***

Jennifer Lentfer: Tell us why you’ve come to Washington, DC.  

Sandra Ascencio: People doing advocacy work in Canada and the US want to know more about how we are organizing communities and what inspires them to resist mining. The message is the same no matter where I go. I want people to know why it is that we want open-pit, metallic mining to be banned in El Salvador.

We need real transformation in government policies of all developed countries. In the case of the US, for example, towards the kind of development the Millennium Challenge Corporation is promoting. As of now, these policies are supporting infrastructure development that benefits the mining companies, instead of looking at a true development that focuses on eradicating poverty and promoting a better quality of life in the Salvadoran population.

Lentfer: What will you remember most from your time in the US and Canada?

What I have found out in our visits to the US and Canada is that people want to know what they can do to help us and how we can work together in a global resistance movement. When I shared my experiences with the faith-based community at Ecumenical Advocacy Days, I saw how people got inspired and how they demonstrated their solidarity with us. It’s important to transmit those emotions into the work. For us, promoting everybody’s well-being remains the center of faith. Only that way, people can keep in mind that the most important things for humans to survive are water, air, and land.

Lentfer: Tell us more about the Justice Office of Peace and Integrity of the Creation of the Order of Friars Minor and the National Roundtable on Metallic Mining. What are these bodies trying to achieve?

Ascencio: The Office of Justice, Peace and Integrity of the Creation was founded in 1987 to continue spreading the voice of the church and build rapport with communities to promote justice, peace and the protection of the environment. The Mesa was formed in 2005. The Office joined the Mesa in 2007, when we realized that contamination from mining was a big issue to address when it came to our food and water and our health.

At the Order of Friars Minor, we try to maintain a spirituality based on St. Francis de Assisi, focused on serving others and relating to nature and the environment. It’s what motivates us to protect creation. The rights of the earth and the rights of human beings are one in the same.

Lentfer: Where is the national-level debate about mining in El Salvador today?

Ascencio: Currently El Salvador does not have a law to regulate water management and so that’s where the National Assembly is focused right now. Within the proposed law there is a provision that mining is not promoted. La Mesa is trying to include mining provisions in all laws.

The proposal to ban mining has been offered, but has not moved forward in the legislature. After years of remaining silent about this, the Industrial Association of El Salvador is now actively asking the government to think twice about importance of mining to the development of our country. The civil society is watching their next steps closely, due to the level of influence the Association has on the national policies, in particular in regards to the management of the use of water and land.

Lentfer: What do you say when someone tells you that mining is a “good option” for development?

Ascencio: From my spiritual perspective, mining is not a viable option. Millions of years have to pass for the equilibrium to be re-established following the impacts of contamination, and our generations will never see repair. There is already enough minerals/metals extracted that could be re-utilized. There is no need to keep extracting more. What matters most is our ways of consumption and demand for such things.

A community meeting on mining near Ilobasco, El Salvador. Photo: Jeff Deutsch / Oxfam America

Lentfer: What are some of the consequences of industrialized mining that you have seen at the community level in El Salvador?

Ascencio: In the Department of La Unión [in the north-east of El Salvador], there is still proof of contamination of a mine that operated decades ago. The river there is completely contaminated and potable water is now very scarce. After that experience, for everyone that struggles on a daily basis to get drinking water, to think of another mining project coming becomes an issue of life and death.

New mining projects are proposed in Northern areas, where there is a lot of poverty and the soils already need lots of fertilizers. These are the same areas that were very much affected by the civil war.

Lentfer: I’m sure that the environmental educators you work with are discussing much more than the environment when they meet with communities. How do you prepare them? What are some of the biggest challenges they face?

Ascencio: We educate them a lot about health problems from contamination and how to identify sicknesses. We also talk about the rights of people and the rights of the Earth and how to protect them so we have a better quality of life. If we protect the three basic elements—water, air, land—we will also have access to good food. We teach them how to open up these issues and talk about them with communities.

However, mining projects can break the social fabric of communities and divide them. Some people will always prioritize the so-called economic benefits of mining—employment and secondary businesses. What our educators must also share with the communities is the true price of mining—construction of dams that take their water, destruction of natural resources to make roads for big trucks, displacement of communities. For people with the hope of getting a job and having some security, it’s a big challenge weigh short- and long-term costs and benefits of mining. So we have to prepare our educators to talk frankly about the consequences of mining that people cannot often see.

Lentfer: So many people who have been fighting to protect their communities in El Salvador have been threatened, and even killed. Despite these risks, what drives you to continue?

Ascencio: A total commitment. My work is primarily spiritual and by conviction. God gives us each abilities to use according to our faith. When I die, I don’t want to go [up] there and think I didn’t do anything.

I’m preparing my two children to know that my work is for God. They also need to learn the values of service and discernment. I tell them that if something happens to me, then they know that it was worthwhile. But it’s better not to think of those things otherwise you could lose your energy and motivation.

Lentfer: What do policymakers in Washington DC need to know or do to best assist you in your efforts in El Salvador?

Ascencio: You are not the only country and the only generation of this planet. What they have is enough to exist in this world. We want to see a change towards solidarity in US economic and foreign policies.

Lentfer: What gives you hope for the future?

Ascencio: I think that every person is good, in their essence. My work is not because I’m a lawyer or a scientist, but because I believe in solidarity and harmony as the principles of life. We all are on a journey to encounter our common well-being.

Thanks to Sofia Vergara for assisting with translation.

“Africa is suffering from a new AIDs crisis: ‘Air-conditioned Induced Decisions.’  Our leaders live in air-conditioned homes, travel in air-conditioned cars, work in air-conditioned offices.  And it affects the decisions they make.” ~Maiko Zulu, Zambian reggae music star and activist

I had a chance to meet Maiko Zulu last week.  He wears frustration and disappointment with his country on his sleeve (and in his music).  Zambia is a country that should be improving economically.  Driven by mining large copper and cobalt reserves, economic growth has been high for the last decade, not less than 5% per year and more than 7% as recently as 2010.  The Economist in 2011 listed Zambia as one of the world’s 10 fastest-growing economies. Since, 2000, average income per capita has grown by more than 40%, lifting Zambia from “low-income country” to a “lower middle-income country.”

But high economic growth and increased average income have not translated into reduced poverty or better conditions for most Zambians.  If Zambia’s national income was a dollar, the poorest 10% of Zambians receive less than $0.02 and the richest 10% control $0.43, making Zambia one of the most unequal countries on earth. Despite good news on growth and income, Zambia is becoming more unequal and poverty is actually rising.

This analysis comes from a very important report released last week, Equity in Extractives, launched by the Africa Progress Panel.  It looks closely at the 20 African resource-rich countries that depend on extractive industries and finds they are performing quite badly in converting their mineral and energy wealth into benefits for the public. A few factoids:

• Twelve of the 25 countries in the world with the highest child mortality rates are resource-rich African countries.
• Equatorial Guinea, rich with oil, is actually now classified as a high-income country with an average income of more than $27,000 a year, higher than Poland.  But Equatorial Guinea’s child-death rate is 20 times higher than Poland’s.

In general, the resource-rich African countries are badly under-performing on basic human development and poverty reduction, despite how much money they’re making.  This chart tells the story: on the left are the countries’ ranking on wealth (actually income), and on the right is their ranking on human development indicators.  That rightward slope means people aren’t getting the health, education, and opportunity that they deserve.  Most resource-rich countries under-perform in every indicator. (Tanzania and Ghana are notable.)

One of the most interesting bits of the report is a forensic analysis that shows that inequality is growing in resource-rich countries, or at least in those the report analyzed.  The data is hard to come by, but seems to show that not only is the economic growth and revenue from oil and mining boom not being shared, but the elite are capturing (stealing?) ever more of the money over time. This means less poverty reduction than there should be, and in some cases more poverty than there was.

More than that, revenues that rightfully belong to the people of these countries are diverted through poor governance, thereby robbing the majority of citizens from the chance to improve their lives via social services and government investment intended to diversify economies. By not widening opportunities away from dependence on extractives and creating more jobs, inequality is not addressed.

Gawain Kripke and Maiko Zulu in Cape Town last week.

The paper is important, and not only if you’re interested in extractive industries.  The analysis provides useful insights and ways to look at the issues that will interest anyone who cares about development and poverty.  The paper is studiously optimistic about the role extractive resources can play in benefiting development and poverty reduction.

Meanwhile, the truth of the inequality of growth is becoming more evident to the public in these countries.  As Maiko Zulu observes above, there is a disconnect between the public interest and those of the plutocrats and oligarchs who are running the countries.

“We can’t speak of economic growth when people are dying of poverty.”

Will disconnect eventually lead to discontent?  That’s a risky proposition that could lead anywhere…

To read the Equity in Extractives report, click here.

The chair of the Africa Progress Panel, former UN Secretary General Kofi Annan, has pushed back on an oil industry attack against the landmark US Dodd-Frank Act oil and mining payment disclosure provision. In an op-ed in today’s New York Times, Annan said the lawsuit launched by the American Petroleum Institute against the US Securities and Exchange Commission was a “strategic folly” and those companies supporting the suit, such as Chevron, Exxon, BP and Shell were “swimming against the tide of reform”.

Former UN Secretary General Kofi Annan, Chair of the Africa Progress Panel. UN Photo/Evan Schneider

The Africa Progress Panel’s 2013 report “Equity in Extractives” was released today in Cape Town and focuses on steps to take to ensure that Africa’s oil, gas and mining boom actually benefits the majority of African’s rather than a select few. The panel includes the former head of the IMF, Michel Camdessus; former US Treasury Secretary Robert Rubin; former Nigerian President Olusegun Obasanjo; former first lady of Mozambique Graca Machel; and Peter Eigen, founder of Transparency International and former chair of the Extractive Industries Transparency Initiative, among others.

These heavy hitters stand behind a report that says there “is no credible evidence to indicate that the Dodd-Frank requirements will impose significant additional costs, let alone threaten the competitive position of some of the world’s largest companies.” The report says that the “Cardin-Lugar” or Section 1504 provision of Dodd-Frank and forthcoming European Union disclosure requirements provisions represents an important opportunity for African civil society groups to work with multinational companies to “achieve higher standards of disclosure” but notes that some companies appear “to be squandering that opportunity” with the US lawsuit.

In advance of June’s G8 summit, the report says “all countries must adopt and enforce” project-by-project disclosure standards such as in the US and EU—“as major players in Africa’s extractives sector, Australia, Canada and China should be the next countries to actively support this emerging global consensus.”

Oxfam’s new Executive Director, Winnie Byanyima, is from Uganda, a country undergoing its own oil boom, and is in Cape Town for the World Economic Forum Africa. She said “African governments must use oil, gas and mining to raise revenue, but this boom must not steamroll the rights of communities living on top of Africa’s mineral wealth. It is important that local communities are informed and consulted about extractive industry projects that affect them.”

With the political boost from today’s African Progress Report we are one step closing to realizing the so far unrealized potential of Africa’s resource endowment.

A few weeks ago, a few House Republicans introduced H.R. 1613, the innocuous sounding “Outer Continental Shelf Transboundary Hydrocarbons Agreement Act”. A little over four pages long, H.R. 1613 is primarily designed to provide Congressional approval to a US-Mexico Transboundary Hydrocarbons Agreement (TBA) signed by both governments over a year ago.

Oxfam has no problem with the approval of the US-Mexico TBA which simply lays out the rules for how hydrocarbons reserves in the Gulf of Mexico that straddle our maritime borders would be developed.

We do have a big problem with an irrelevant provision inserted into the bill designed to weaken the payment disclosure requirements in Section 1504 of the Dodd-Frank Act, also known as the Cardin-Lugar provision. That law provides for the annual disclosure of payments made by oil, gas and mining companies to host governments around the world – final rules were issued by the SEC in August last year. H.R. 1613 would exempt any covered company from reporting payments from in accordance with any transboundary hydrocarbons agreement anywhere in the world.

The American Petroleum Institute (API) – backed by companies such as Exxon, Shell, Chevron and BP – is suing the SEC in federal court and is now hoping that its Congressional allies can help weaken this landmark law. Oxfam is intervening to defend the rule. Meanwhile, the European Union has reached agreement to put in place similar reporting requirements.

I spoke this week with Neil Brown who was, until very recently, a top Senate Republican aide working on energy issues for Senator Lugar, who was the ranking member of the Senate Foreign Relations Committee. His response: “this exemption is unnecessary and inclusion would only forestall quick approval of this important agreement.”

He should know. As both the co-author of a Senate Foreign Relations Committee minority staff report for Senator Lugar on “Oil, Mexico and the Transboundary Agreement” as well as someone intimately familiar with the “Cardin-Lugar” provision in  Dodd-Frank, Mr. Brown would know if the reporting requirements in Dodd-Frank Section 1504 present any issue in approving the US-Mexico TBA. The short answer – they don’t. The minority staff report envisions reporting under Section 1504 and says that under Section 1504 covered companies “would already have to disclose payments” to the SEC if “they invest in Mexico”.

The US-Mexico TBA requires that certain information be kept confidential unless disclosure is required by law. The TBA text demonstrates that the US and Mexico have already made the correct policy judgment that the specific confidentiality provisions of the TBA should be subordinated to each country’s commitment to openness and subject to each country’s disclosure requirements. Nothing in the TBA would require the exemption provided by H.R. 1613.

Tellingly, the Senate Energy Committee has introduced a bi-partisan bill, S. 812, sponsored by Senators Ron Wyden (D-OR) and Lisa Murkowski (R-AK) to approve the US-Mexico TBA, and it contains no Section 1504 exemption provision. If Congress is truly interested in approving this agreement and providing the “rules of the road” for joint development of oil and gas reserves straddling the US-Mexico maritime boundary, then it should adopt the clean Senate bill without the reporting exemption.

Former Senator Jeff Bingaman, past Senate Energy Committee chairman, told Reuters that the exemption proposed by the House “complicates things significantly” for passage of the bill. Referring to the Section 1504 exemption language, he said, “They’ve added in some things that are going to make it difficult to pass in that form.”

The Mexican Congress ratified the TBA a year ago, and the Obama administration – and the oil industry – would like to see it approved. The Obama administration, though, has made clear that implementation of Section 1504 is a priority.

In a letter to Oxfam, Sec. of State Kerry said, “The Department of State and Administration strongly support transparency in the extractives sectors, as outlined in Section 1504 of Dodd-Frank, and the new rule issued by the SEC. The new SEC standard directly advances our foreign policy interest in increasing transparency and reducing corruption, particularly in the oil, gas and mineral sectors.”

My guess is that the oil industry lobby wants this TBA approved far more than it wants this unnecessary Section 1504 exemption. Surya Gunasekara, a tax and trade counsel with the American Petroleum Institute told me that there is “no doubt” that API cares more about Gulf of Mexico access than the proposed Section 1504 exemption.

Emily Greenspan is an extractive industries policy and advocacy advisor with Oxfam America.

Recent statements from the Peruvian government do not bode well for implementation of Peru’s new Indigenous Peoples Consultation Law (Consultation Law). The landmark law, passed in 2011 and now being implemented, requires the Peruvian government to consult indigenous peoples affected directly by development policies and projects such as oil drilling, mining, roads and forestry. Consultations must aim to achieve agreement or consent. If implemented effectively, the law could help reduce the number of violent conflicts that frequently emerge in the country’s oil and mining industries.

However, last week Peru’s Vice Minister of Culture Ivan Lanegra—responsible for overseeing implementation of Peru’s Consultation Law—resigned in protest following Executive branch declarations that highland (or campesina) communities do not qualify as indigenous peoples. At the same time, the Peruvian government announced that it will proceed with 14 mining projects located in the Peruvian highlands without prior consultation with neighboring communities.

The Peruvian government should recognize publicly that many highland communities meet national and international criteria for identifying indigenous peoples, and should immediately begin prior consultation processes in accordance with the law. At the same time, the less progressive companies currently fighting the law in Peru should recognize that if they do not comply with law they will be at a competitive disadvantage in the end.

Worrisome signals from the government

Photo: Jessica Erickson / Oxfam America

In a speech on April 28, President Humala stated that, “Basically there are no native communities…in the sierra [highlands], the majority are agrarian communities resulting from agrarian reform. For the most part native communities are found in the jungle, those called ‘no contactados’ [uncontacted communities living in voluntary isolation]”. This worrisome statement fails to recognize that communities living in voluntary isolation represent only a small percentage of indigenous communities inhabiting forested areas in Peru, and directly contradicts the Consultation Law which states that highland or Andean communities may be considered indigenous peoples as long as they meet certain objective criteria specified in the law. Peru also has a law protecting indigenous knowledge of biological resources which states that highland communities may be considered indigenous peoples.

Peru’s Cabinet (Consejo de Ministros) claims that by moving ahead with 14 mining projects without prior consultation with communities they are attempting to “unfetter” these projects from bureaucratic requirements. However, the government’s approach is shortsighted. If it chooses to proceed with projects impacting indigenous peoples without consultation it would violate not only its own laws, but also international human rights law.

Human rights and business case for community consent

United Nations Special Rapporteur on the rights of indigenous peoples James Anaya stated in a public speech in Lima on April 25:

In my work as special rapporteur on the rights of indigenous peoples for the United Nations, the majority of the problems that reach my attention reflect a lack of adequate consultation with indigenous peoples, in particular on decisions related to development or natural resource extraction projects on their territories…Various treaties, in addition to [International Labor Organization] Convention 169, support the consultation standard…Consultation and its link to the principle of free, prior and informed consent are central elements for a new model of relationships and development.

In fact, if Peru proceeds with mining projects without consulting indigenous communities, the government will risk being taken to the Inter-American Court of Human Rights, which has interpreted Free Prior and Informed Consent (FPIC) to apply to development projects with significant impacts and has, in several instances, ruled that states failed to meet their FPIC obligations.

In addition, while the government may hope to woo mining companies by bypassing consultation processes, ultimately this approach will be to the detriment of mining companies’ bottom lines as well given the high economic cost of social conflict in the extractive industries. A 2011 study by researchers from Harvard Kennedy School and the University of Queensland found that a world-class mining project (capital expenditure between US$3-5 billion) stands to lose approximately US$20 million per week in lost productivity as a result of delayed production from social conflict. In Peru, mining giant Newmont reported that it lost approximately $2 million per day in the first few days alone after local protests paralyzed its Conga mining project.

In recent years, several oil and mining companies have adopted public policies in favor of securing community approval prior to moving projects forward. We recently released a report showing that 13 of 28 oil and mining companies reviewed have made public commitments to FPIC (five with explicit commitments and an additional eight with indirect or qualified commitments). Companies are beginning to get the message – those that fail to consult communities early and adequately risk facing delays and huge costs down the road.

Implications for the Latin America region

Currently, several other countries in Latin America are considering developing consultation laws similar to Peru’s Consultation Law. Peru has emerged as a leader in the region on community consultation issues, but stands to lose that position if the law is not implemented adequately. A rollback of the law could have serious repercussions for many indigenous communities affected by oil and mining projects throughout Latin America.

Two key moments stand out for me last week. On Monday I saw former Senator Lugar (R-IN) receive Transparency International USA’s “Integrity Award” for his work to combat corruption, whether through his oversight hearings of World Bank projects or his leadership on the Dodd-Frank Act, specifically the Cardin-Lugar oil, gas and mining payment disclosure provision. . During a dinner co-sponsored by Exxon, Senator Lugar recounted his lobby visits from oil company representatives during the consideration of this legislation that now requires oil, gas and mining companies to disclose their payments to host governments. After hearing them out, Lugar and his staff simply weren’t persuaded by industry arguments about competitive harm or compliance costs. Looking forward, Lugar referenced the litigation that the American Petroleum Institute has launched against the provision bearing his name and said that no matter the outcome, “The trend is in our direction.”

The case will now go back down to the district court, where Oxfam believes the weaknesses of oil industry arguments will be demonstrated.

Indeed it is. On Friday morning I learned that the US Court of Appeals was not persuaded by the jurisdictional arguments of the oil industry’s lawyers, (Eugene Scalia and company from Gibson Dunn). The Appeals Court dismissed the case agreeing with Oxfam’s lawyers that the case should be heard in the district court first as Congress had instructed. Oxfam, as an intervener, was the only party to argue that this case does not belong in the Appeals Court and the court adopted Oxfam’s reasoning throughout the entire opinion.

This is a victory for transparency campaigners in the Publish What You Pay coalition. With the dismissal, the case will now go back down to the district court where there will be more opportunity for a comprehensive review of the administrative record. Such a review, we believe, will demonstrate the hollowness of industry arguments.

While the legal process continues, global momentum for increased transparency in the oil, gas and mining industry gains steam. In April, the European Union agreed on tough new rules that mirror Cardin-Lugar, with no exemptions for companies for alleged host government prohibitions. Once again, politicians and regulators were not persuaded by industry arguments and fear mongering. In Canada, Publish What You Pay is working with the Mining Association of Canada to develop mandatory disclosure proposals for the government. Later in May, Newmont Mining, the US and UK governments, and investors will highlight the importance of mandatory disclosure rules on the sidelines of the Extractive Industries Transparency Initiative global conference in Sydney, Australia. Finally, the UK government is championing transparency as part of its hosting of the G8 in June.

As the transparency tide reaches many corners of the globe, the war on transparency being waged by companies such as Shell, BP, Exxon and Chevron will seem increasingly doomed and misguided.

“You cannot link the extraction of minerals and community development—not at all,” says Augustine Niber.

Augustine Niber, Executive Director of the Centre for Public Interest Law in Accra, Ghana. Photo: Jennifer Lentfer / Oxfam America

Earlier this month, Oxfam America’s Extractive Industries campaign had the privilege of hosting Niber in Washington, DC to participate in a series of events, including an Oxfam-sponsored panel on land, natural resources, and food justice during Ecumenical Advocacy Days and the launch of an Oxfam report measuring the effectiveness of National Human Rights Institutions that features a case study in Ghana.  Here in the Oxfam offices in DC, amidst all his other activities, I had the opportunity to sit down with Augustine Niber and learn more about him, his work, and the issues communities affected by mining face in Ghana.

Founded in 1999, CEPIL is a non-profit public interest and human rights NGO and one of CEPIL’s key initiatives, the Mining Communities Human Rights and Legal Support Program, has provided free legal services, including court room representation, to communities negatively impacted by mining companies in Ghana. CEPIL also provides legal literacy training and human rights education to these communities to enable them to demand their rights.

“For state institutions in Ghana, the driving force has always been to promote mining activity,” says Niber, “but that type of development paradigm has not succeeded.”

So what does bring about development for communities affected by mining?

Below are three lessons I took away from hearing more about Augustine’s experience as a lawyer and an advocate, pertinent even beyond the mining sector:

1. Good governance and transparency are key.

Ghana is often referred to as the beacon of democracy in Africa. Niber shared that this has fostered a shift in the space for debate on extractive issues, and the role of civil society in this debate.

“The democratic environment we have enjoyed for twenty years now is a factor. Before, if you spoke about mining, you were seen as anti-development. Government has come to realize that civil society organizations working on extractive industries issues are not anti-development or mining, but development partners.”

Civil society participation and pressure have played an important role in pushing forward legislation promoting transparency of extractive resources revenues, particularly regarding oil extraction, which is relatively new to Ghana.

“As civil society organizations, we are working to ensure that the nature of violations for community rights in solid mineral extraction do not happen in oil extraction. Oil revenues should not be misused the way mining revenues have been used.”

Indeed, Ghanaian civil society was deeply involved in moving the passage of the Petroleum Revenue Bill in 2011, requiring petroleum revenue receipts and expenditures to be made public. The bill also called for the creation of a Public Interest and Accountability Committee to independently monitor and regulate the sector.

But Niber cautions that transparency is only the first step to accountability.

“Transparency is an important policy initiative, but it is not just about the policies in Ghana. It is about implementation of the policies.”

2. Community consultation and consent are key.

“Communities are not benefiting [from the industry]. [They] are not part of the decision making process. There have been human rights violations where community members have lost farmland.”

Artisinal miners working in the tailings impoundment of AngloGold Ashanti’s Obuasi Mine in Obuasi, Ghana. Many artisinal miners in Ghana are farmers that have been displaced by large scale mining. Photo: Keith Slack / Oxfam America

The extraction of natural resources can only contribute to development if a community’s fundamental rights are respected, Niber explained. The lack of consultation and consent often leads to the displacement of communities without just compensation. Niber also explained that some community members take part in “galamsey”, or artisanal mining, which can be a very dangerous undertaking.

“These community members are often harassed by state and private security employed by mining companies. Communities become disgruntled and protest. Some people have gotten shot.”

In addition, mining companies often fall short in their promise of jobs for the communities in which they operate. This can also create tension and unrest between the communities and the extractive companies. This is why Niber says companies and governments should be required to obtain the Free, Prior and Informed Consent (FPIC) of communities affected by oil and mining activity.

3. Taking the long view is key.

Achieving true, long-term social justice cannot be done overnight, something Niber knows all too well. Providing legal assistance and court representation for individuals and communities negatively affected by mining is a lengthy process, and a case can easily last a few years before a decision is reached.

“There are delays. Companies and their lawyers know how to frustrate the cases through the legal process and court system. It is possible to cause litigation fatigue with vulnerable communities.”

Though attaining results can take a long time, the payoff can be great and well worth the effort and wait. Such is the case with Niber’s most memorable case at CEPIL. “It was against the [Ghanaian] Environmental Protection Agency (EPA) and a defunct company that operated and left. The Minerals Commission, [responsible for the regulation and management of the mineral resources of Ghana], and the government were held jointly responsible for the destruction that took place.”

The effects of this case went well beyond mining. “CEPIL instituted the case in our name and the court ruled in our favor. The case has become a precedent that other civil society organizations are now using, and it has expanded the frontier of jurisprudence of Ghanaian courts.”

(Bonus lesson!) 4. Bringing global pressure is key.

Niber said that global pressure is important to his work, and encouraged us that here in the US, we can play a part. We can push our policy makers in DC to encourage African governments to agree to a common mining code in ECOWAS, push to protect the 1504 transparency provision, and pressure API to drop the lawsuit against it.

Oxfam has been supporting CEPIL since 2006. To learn more about their work, see: www.cepil.org.gh