Politics of Poverty

Africa’s Natural Resources: 3 Things Governments Need to Get Right

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Many of the 1,429 households resettled to make way for Vale and Rio Tinto’s international coal mining operations in Tete province, Mozambique received land with poor access to water and limited productivity. The farmland provided to Senolia S. (pictured), upon her resettlement to Cateme, was reclaimed by its original cultivators. She did not receive any replacement land or additional assistance and finally scraped enough money together to rent a plot of rocky, untilled land. Photo: Samer Muscati / Human Rights Watch

Plus 3 key trends Oxfam is watching

Africa has about a third of the world’s mineral resources, but most of its citizens remain desperately poor and don’t receive the benefits of their natural resource wealth. These resources could generate substantial social, economic and political benefits for Africa, but only if they are pursued in a transparent and accountable way that respects peoples’ fundamental human rights.

Oxfam has been working on extractive industries in West Africa for more than 10 years, and we’re expanding our work into a total of 15 countries in Africa this year. In February we met in South Africa and heard about the challenges our partners are facing across the continent.

There is incredible variety: Oxfam partners are working in countries that are just discovering and beginning to develop resources, like Mozambique, Uganda, and Kenya, as well as countries with a long and often troubled history of natural resource extraction like Ghana, Nigeria, and South Africa.

We want to highlight three key priorities of their work in Africa, and three key trends we’ve seen emerge over the past several years.

1. Protect the rights of communities and citizens

When drilling or mining starts, communities often face negative economic, social and environmental impacts. In many cases, the failure to respect and protect communities’ rights is a major cause of conflict.  For years a key part of our work has involved protecting the rights of affected communities to participate in decision-making over whether and how natural resources will be developed and managed. Rarely is the consent of communities obtained before mining or oil operations start – but ensuring the right of free, prior and informed consent is essential to prevent negative consequences, conflicts and disruptions.

Resettlement also poses a risk to human rights. In Mozambique, for example, Australian mining company Rio Tinto operates coal mines in central Mozambique that displaced hundreds of families from their homes. At our meeting last month, staff shared stories from visits to these communities that showed the serious shortcomings in government resettlement policy and company implementation.  Largely self-sufficient farming communities were uprooted and resettled to arid lands far from rivers and markets and with inadequate compensation – resulting in food insecurity, water shortage, and other problems that disproportionally impacted women.

2. Give communities their fair share

Most African countries are not getting a fair share of the value of their mineral and hydrocarbon resources, and this is exacerbated by histories of poor governance and corruption. A few people continue to capture the profits from resources that should serve the majority of citizens’ needs.

We’re focusing on transparency—shining a light on contracts, revenues and payments companies make to governments—and tracking how this money is spent as a means to improve accountability. This includes fighting for transparency regulations here in the US, as well as in the UK, Canada, France, and in Africa. Transparency can help ensure that revenues benefit communities instead of being captured by a handful through corruption and tax avoidance. Extractive companies sometimes use tax dodging and tax avoidance strategies and benefit from unnecessary tax incentives. The so-called “Mbeki panel report” on illicit financial flows in Africa (launched the week before we met in South Africa) makes this abundantly clear.

Oxfam partners and staff in South Africa. Source: Maria Ramos /Oxfam America

Once transparency is in place, it becomes easier to track these revenues and hold local and national governments accountable for how they spend this money.  In Kenya, the government has committed to making Production Sharing Contracts public and operators like Tullow Oil have stated their commitment to full disclosure of petroleum agreements. Our staff in Ghana also shared how in 2013, they had campaigned with local partners and allies to convince the government to invest more of its oil revenues in agriculture – their campaign experience, and the “Oil 4 Food” model, were valuable lessons for our staff across Africa on how oil revenue distributions can be improved to benefit small-scale farmers and reduce poverty.

3. Address the negative impacts on communities and the most vulnerable

Natural resource development can have negative social, environmental, and economic consequences that can devastate communities, especially the most vulnerable. Environmental and social impacts of extraction can have long legacies—with some environmental health impacts, if ignored, being experienced two or more generations into the future.

Across Africa we’re focused on reducing these impacts through improved, independent, Environmental and Social Impact Assessments before operations begin.  This will encourage companies to clearly identify their likely effects on the most vulnerable and take measures to minimize them. Disclosing anticipated project impacts is information that communities need to be able to exercise their rights to free, prior, and informed consent.

Oil, gas, and mining activities also disproportionately affect women, children and the most vulnerable – silencing their voices and taking away their livelihoods. Women often bear the brunt of these impacts and are rarely included in decision making—yet they are at risk of lost livelihoods, violence and sexual harassment, trafficking and prostitution and health risks of water and soil contamination.

In Ghana, we are supporting two organizations that are training village women to become paralegals, who then teach others their rights under mining laws and Ghana’s constitution, negotiation skills, how to analyze an environmental impact assessment, and water quality monitoring.

3 Key Trends:

The key to Oxfam’s work is to empower communities and citizens to know and defend their rights – that’s why most of our work in-country focuses on local partners and organizations who know the context and are best positioned to fight poverty and inequality. Based on these relationships, here are three key trends we’ve been watching over the past few years and the workshop underlined their importance as they impact our partners’ work:

1. New foreign actors: Non‐Western companies – specifically Chinese and Indian – are investing heavily in Africa. Our African teams are unified in saying that we have to engage these companies effectively to reduce poverty

2. New players in the oil and gas boom: There are major natural gas reserves off the coasts of Tanzania and Mozambique, and both countries are competing for the first liquefied natural gas processing and exporting facility in southern Africa. Ghana has begun oil production, and Kenya is in the early stages of an oil and gas boom. The possibility of oil and gas deposits under Lake Malawi has heightened tensions between Malawi and its neighbor Tanzania.

Independent organizations and experts need to be involved with new producers and discoveries so that forecasts and expectations are realistic – discoveries may offer much-needed revenues for governments, but “boom” forecasts can be widely overstated. When governments can realistically expect to receive the first payments, and how much, year-by-year, they are actually likely to receive, depends upon complex sets of fiscal terms that are rarely disclosed.  Communities have the right to be engaged in the pre-approval reality testing processes in order to protect their rights.

3. Closing of civil society space: “The closer we get to real power, the higher the risks for our staff and partners,” says Adriano Nuvunga from the Centre for Public Integrity in Mozambique. It is becoming more difficult in many countries for civil society groups to work on these issues. Too often communities and human rights defenders who speak up when rights are at risk are erroneously framed as “anti-development,” a political tactic used to silence them. Or worse, governments seek to place legal restrictions on the activities of civil society groups or find other ways to muzzle activists. Once this space is closed it is extremely hard to re-open it – so it’s urgent that we prioritize the rights of free speech and protect civil society in restricted countries.

This is an interesting time for Africa – many people are talking about how to end the so-called “resource curse” as part of an “Africa Rising” narrative popular with some observers. New discoveries and demand for fuel and minerals could help reduce poverty and inequality – but only if they do not undermine peoples’ rights to know and decide. And that’s a big “if.”

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