At Chatham House, But on the Record
Chatham House, aka the Royal Institute of International Affairs in London, is famously known for the “Chatham House Rule” wherein what was said at an event can be shared but not attributed to any speaker.
Last week’s Chatham House conference, “Extractive Industries in Africa: New Approaches to Overcome Enduring Challenges”, though, was on the record, and there were some notable statements from officials from South Africa, Ghana and Kenya about ways to reform the management of the mining and oil sectors in their countries.
More transparency for South Africa?
Ngoako Ramatlhodi, South Africa’s Minister of Mineral Resources, was asked by me, and then again by Tom Burgis (Financial Times correspondent and author of the compelling new book on Africa’s extractives sector, “The Looting Machine”) whether he would support a requirement that oil, gas and mining companies listed on the Johannesburg Stock Exchange disclose the payments they make to governments in the countries where the operate. I suggested that such a move would show leadership on the issue in the G20, of which South Africa is the only African member-country.
“The answer is yes, even if we are accused of punching above our weight,” Minister Ramatlhodi said. “The system we are trying to build must be built on transparency… Part of how we managed to end strikes was we said to companies ‘Open your books so we can see how deep the pocket runs’. The message I’m sending to industry is ‘Let’s be transparent’. You lose nothing by being transparent and disclosure is a key. So the answer is yes.”
He said any confidentiality concerns from business could be managed. “You don’t sacrifice business interests but you have to get information needed to make informed decisions.” Striking a theme that would be heard from others, he urged companies to align their social responsibility programs with local development plans. Companies shouldn’t “come with parallel social development programs but should integrate into government development plans.”
While a few in the audience speculated that companies might be less than enthusiastic about a Johannesburg Stock Exchange (JSE) listing requirement, a top official at Anglo-American, Dorian Emmett, Global Head of Safety and Sustainable Development, said the company is “in principle, absolutely supportive” at last year’s Mining Indaba in Cape Town.
And some companies listed on the JSE have already backed a mandatory payment disclosure law in Canada. If South Africa were to make such a move – as recommended by Oxfam South Africa, the Economic Justice Network and other groups in South Africa – it would join the European Union, US, Norway and Canada which have already adopted payment disclosure laws for extractives companies listed on their stock exchanges.
Moving toward Free, Prior and Informed Consent in Ghana?
Nii Osah Mills, Ghana’s Minister of Lands and Natural Resources, also endorsed increased transparency in Ghana. The country already has a strong Petroleum Revenue Management Act which requires quarterly disclosures of oil company payments by the government. When I asked if he supported such a law for the mineral sectors he said, “Why not?”
Ghana’s main mining law is currently under review and this provides a perfect opportunity to increase transparency and to adopt a Free, Prior and Informed Consent requirement for communities affected by mining. “Consent is quite critical,” said the minister. “We receive letters alleging that communities have not consented despite” a process giving communities 21 days to object to new mining licenses. While the notices are only posted on District Assembly notice boards, Minister Mills agreed that more could be done to make sure communities were aware and consulted around new mining projects. “There is an assumption that community members are aware…. Improved or enhanced transparency could be looked at… We recognize that we could do more to ensure that communities accept mining and that there is no doubt that they do.”
Warning signs in Kenya
Finally, the conference heard a valuable perspective from a sub-national government official, Josephat Nanok, the governor of Turkana County where a major new oil find is being developed by Tullow Oil and partners. Governor Nanok, with Tullow’s Vice President for Safety, Sustainability and External Affairs in the audience, listed a litany of complaints regarding the situation on the ground. He reaffirmed concerns about parallel development efforts saying that companies are “continuously breaking local content agreements” and that companies are “propagating a parallel development program away from regional governments. There is a lack of coordination with county government development plans… Big money is meant to coerce unhappy communities into submission.” Tullow’s Sandy Stash said that the “upside of low oil prices is that it gives us space to take a deep breath and engage with communities around our social investments.”
While declining to endorse FPIC, Governor Nanok said communities have the “right to be consulted… public participation in consultations is at the heart of development. Meaningful engagement with communities will help avoid suspicions.” Local protests have halted work on the project in Turkana on several occasions. Last October, the Kenya Civil Society Platform on Oil and Gas launched an “agenda setting report” at Chatham House, calling on the government, among other things, to disclose petroleum agreements.
Governor Nanok echoed this call and said that “non-disclosure of petroleum agreements creates an imbalance between national and local governments.” Both President Kenyatta and Tullow’s Chairman Simon Thompson have stated their support for the disclosure of the petroleum agreements but they still have not been disclosed.
As for my remarks, I noted that it had been 12 years since I had been in Chatham House at the start of the last big African oil boom, launching the report “Bottom of the Barrel: Africa’s Oil Boom and the Poor”. I noted “paradigm shifting progress” on payment disclosure but said that the pace of reform has been far too slow over the past decade.
“How can we bend the billions of dollars flowing in to government coffers toward poverty reduction? There are precious few places where we can say we’ve really ‘walked the last mile’. Precious few places where we’ve connected the reality on the ground to the world of political and corporate elites, places where citizens have real power to influence how extractive industry projects are designed – and whether they go forward – and how the revenues generated are managed and used.
As should be obvious, I think we’ve reached the limits of technocratic interventions. We need to ask ourselves how much of a market there really is for sensible advice… At this point, if governments, companies and donors are doing the wrong thing, they are more often than not willfully doing the wrong thing.”