Tag Archives: EITI

“Beyond Governments” – Do transparency initiatives work?

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My review of “Beyond Governments: Making Collective Governance Work” by Eddie Rich and Jonas Moberg (2015)

“Beyond Governments” is a rare thing – a book written on collective governance by practitioners who are still in the midst of practicing the art. In some ways, it is an autobiography of the Extractive Industries Transparency Initiative (EITI) by two of its leading protagonists, and given the endorsements at the start of the book, it is very much an authorized one. The fact that the EITI’s final chapters have yet to be written makes the book more compelling and timely – there is a lot to learn for anyone engaged in collective governance initiatives. This is very timely as we approach the launch of the 2015-30 UN Sustainable Development Goals with governments, business and civil society far from agreeing how they should cooperate in their governance.

As a reader, I found myself banging the table in violent agreement on some of the early key points: that collective governance is irresistible and that accountability has to be a three-way process between governments, business and civil society. There is some openness on the real motivations behind why some governments, businesses and civil society join such initiatives – the fear of ‘resource nationalism’ being high amongst these. My favorite is Chapter 4: “Build Trust through Building Momentum: Just Get on with It” should be on T-shirts and handed out to all collective governance entrepreneurs. There are some real gems here that often never see the light of day in more politically correct writing: voting represents weakness not strength, the voluntary/mandatory divide is a major distraction and that power imbalances need to be accepted. Essentially forward momentum is gold dust for collective governance work, endless years of discussing governance whilst not rolling up collective sleeves to work together on the ground (which has blighted some other multi-stakeholder initiatives) results in few benefits for rights-holders and communities.

Another stand out for me is Chapter 8 on Sunset Clauses – there should be no in-built assumption that new models of collective governance should be permanent. Rich and Moberg are very open about the degree of experimentation that is going on and some of the dangers of co-option or decline, as well as the vigor of having time-bound objectives. “Initiatives need to dismantle themselves or reinvent themselves” – a key point that so many other others have overlooked. Planning for redundancy used to be the mantra of the voluntary sector, before NGOs became part of the status quo, and it is a good default for collective governance initiatives. They might become the “new norm” but we, and especially they, must not assume that they will.

The book raises many questions but cannot fully answer all (because each would need a book in their own right). Firstly, I wonder how much collective governance is an art and how much it is a science. The book gives ample bullet points for those hungry to learn. These are good. But some of the dark arts of collective governance, and the authors are clearly practitioners, are harder to describe in text boxes. John Ruggie, another who practices and analyses in real time (although in his case he is a thinker turned practitioner – the reverse direction), often quotes Bismarck when asked how he achieved what he did with the MDGs, UN Global Compact or the UN Guiding Principles on Business and Human Rights: “If you like the sausage don’t ask how it is made”. There must be a lot the authors had to leave out.

I also wonder if the “Beyond Governments” title is the right one. The content of the book does not suggest this: rather it is more “Helping National Governments and Other Actors to Do Their Jobs Better in a Complex Globalizing World” – but this is a less catchy title. Any sense of moving beyond governments will raise the hackles of many said governments, as well as many in civil society (who are oxymoronic on this point – governments are the main abusers of human rights yet UN Conventions further legitimize them); some of whom are also closing down space for civil society and in particular those that might receive international funding – an important component of how EITI works. Similarly, I wonder if EITI is really an alternative to regulation (as suggested in Recommendation 9). The Dodd Frank Act in the USA would not suggest that initiatives such as EITI delay binding laws, but rather they might make such legislation effective when it comes.

A final thought would be my predicable point on human rights. I guess I see the interrelationship between transparency and human rights to be much closer than the book suggests, or than that Clare Short inferred when Ethiopia joined EITI. The downgrade of Azerbaijan (on Page 60) was a brave move by EITI but the section really still fudges the relationship between freedom of expression, the right to privacy and the right to information (i.e. transparency). This alignment remains a central challenge for EITI moving forward, and is not one that has hindered transparency NGOs such as Global Witness and their recent work with the global Chinese mining sector.

I would like to congratulate Eddie and Jonas on the book and for taking the time to write it. It is a unique book in many ways and there is a reason that EITI is amongst the most successful of all multi-stakeholder initiatives. So read it.

The book is available from   www.greenleaf-publishing.com

* John Morrison is the Executive Director of the Institute for Human Rights and Business and author of “The Social License” (Palgrave MacMillan, 2014). The views expressed here are his own.

 

Has “fracking” lost its social licence?

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As we approach the next general election, will the UK ever develop an impartial national debate on hydraulic fracturing?

The first time I came across hydraulic fracturing (or “fracking”) was when interviewing geologists at test sites in the north of South Africa and Botswana seven years ago. I was looking at how such technologies might affect fragile populations where water is already scarce and where nomadic communities, as well as farmers, rely on shallow aquifers for their livelihoods, as does wildlife for its survival. I came away with a range of questions and have followed the debate since. Frequent reference was made then to the “fracking debate” in the USA but little did I know we also had hydraulic fracturing in the UK even then and had done so for decades, albeit mainly off-shore.

Now, several years later, we do have a national debate in the UK but it is far from being impartial or arriving at any consensus. It seems rooted in mistrust, conflicting information and entrenched positions: like the debate on Genetically-Modified Crops twenty years ago. Why did our policy-makers allow this to happen again?

There are very good reasons, even at a time of falling oil and gas prices, why the UK should be more self-sufficient in its energy supply. Issues surrounding pipelines from Russia receive a lot of publicity as do human rights in Saudi Arabia. By comparison, much less attention is given to Qatar (one the UK’s major overseas gas suppliers). There are good geo-political reasons, at a time when the North Sea Oil Fields resources are declining – or at least the UK’s bit of them, to look seriously at other sources of UK energy production. There are also very good environmental reasons why we should be shifting away from coal and oil to gas for our power generation in the medium term, whilst also building a solid base of renewables and possibly nuclear energy.

There are good arguments, but have they been heard by the British people? Public opinion polls suggest a low baseline of awareness as to what hydraulic fracturing actually is. The Government’s own research suggests that whilst three quarters of the population have heard about “fracking shale gas” about half of the population do not have an opinion either way about its efficacy, whilst those in opposition represent less than a quarter. Other polls suggest that opposition continues to grow to about 30% of those questioned, rising to 40% if it relates to a local area or up to 70% if in a National Park.

In my book on the “social licence” of activities, I define the concept as having three core definitional elements: legitimacy, trust and consent. The first is notoriously difficult to define but vested interests must be seen as part of it – is the case for fracking objectively made or do some stand to profit more than others. The ownership structure of the companies that hold the exploration licenses is perhaps a surprise to those outside of the industry and can raise concerns over potential or perceived conflicts of interest. There are hundreds of oil and gas exploration companies registered in London and operating across Africa and parts of Asia. It is possibly only those operating in the UK that have received scrutiny. It is not surprising that these companies employ former government officials or former captains of industry – they bring expertise but they also bring access. Cuadrilla, one of the leading UK fracking companies, is chaired by Lord Browne (a man I happen to admire greatly), the former BP boss but also an advisor to Government and there are number of former government ministers connected to the industry. There is of course nothing wrong with this necessarily but the state-energy nexus will need careful explaining to the public for the industry to maintain its legitimacy. It is one thing for BP or Shell to hire former government bods for their global operations, quite another when the drilling is in Sussex or Lancashire it would seem.

When it comes to “trust”, the polling suggests there is a significant way to go and that it is Greenpeace and the Green Party that are currently winning the national debate. And “consent”, well although exploration licenses have been granted by central government, local authorities seem increasingly willing to deny or delay planning permission in the face of local concerns. The protests in Balcombe during 2013 might only be the start of what is to come. All of this seems out of kilter when the real risks are considered. It seems the British people are more than willing to allow those in the Middle East or Africa to face environmental degradation or human rights abuses (such as those in the Niger Delta that have gone on for decades) but much more squeamish about drilling in their own leafy backyard – even if the impacts of which will be incomparably less. This Nimby-ism has rarely been called out (which politician, NGO or business sees it in their interests to do so?) but is clearly a strong component of the UK debate.

It might not be too late for the next UK Government to lead a national debate on the future of our energy supply and the many advantages of domestic energy production. And yes, as much of this as possible should be renewable in the short to medium-term with renewables dominating in the long-term. If there is no need for gas over the medium–term – and I mean really no foreseeable need – then fine, but I have yet to read any compelling evidence of this. Rather, if part of our national strategy is to move from oil and coal to gas over the shorter term – then the UK’s own gas should be part of the mix, surely, and not just that from Qatar and Norway. There are clearly environmental risks associated with fracking in the UK but the impacts of these will be far less than those in drought-prone parts of Africa where British companies are also leading the charge and the British public asks no questions. If the UK wants gas, then why not shoulder some of the risk at home, where it can be better managed and is subject to the full force of British law? We have for decades exported the environmental and human rights impacts of our energy demands.

The next government, likely to be a coalition of some kind, would do well to make Britain’s future energy policy as non-partisan and transparent as possible. Perhaps a multi-stakeholder approach could be developed where government, industry and civil society sit down together to identify and manage the risks of which ever energy sources are exploited here at home. The UK has led on such approaches internationally in relation to revenue transparency in the extractive sectors (the Extractive Industries Transparency Initiative currently chaired by Claire Short and which now has 48 member countries) and also in relation to the use of public and private security forces (the Voluntary Principles on Security and Human Rights which the UK currently chairs). Why not a multi-stakeholder approach relating to energy exploration here at home? This might, just might, ensure that that communities can give informed consent to whatever comes next energy wise.

Gold, Frankincense and Myrrh: Are your gifts conflict free?

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If you are engaged in seasonal gift giving during December, or at any other time of the year for that matter, have you thought about the origin of what lies inside the box? All gift givers might like to tune into this week’s events at the United Nations.

If you are lucky enough to ever receive a diamond (the way Naomi Campbell is reported to have done one night in South Africa in 1997), then there is a chance you will know, or can find out, the mine from which it was dug. “Diamonds are forever”, but perhaps “blood diamonds” are not – given the publicity generated by the film of that name, the International Criminal Court (especially when supermodels testify) and the Kimberley Process between states –which has tried to establish some certification from the mine for larger diamonds at least, albeit a flawed one according to the NGO Global Witness who left the Process in 2011.

However, conflict metals and minerals are a much broader issue than glamorous rocks alone. For most of us, a mobile phone is a much more likely gift: there as many phones as people on the planet now.  Three wise men bearing gifts these days are unlikely to bring Frankincense and Myrrh, but there will be Gold – in their phones that is – together with Aluminium and small amounts of Antimony, Barium, Beryllium, Cobalt, Copper, Chromium, Gallium, Indium, Lead, Manganese, Nickel, Palladium, Platinum, Ruthenium, Rare Earths and Silver. In the case of the Democratic Republic of Congo (DRC), known for its horrendous internal conflicts, it is Tin, Tantalum, Tungsten as well as Gold that are most associated with fuelling the conflict and which are the focus of Section 1502 of the Dodd Frank Act in the USA and now extended internationally through the OECD Due Diligence Guidance. You might like to hope that your electronic gift contains no conflict minerals but how do you know? You might like to ask your high street brands what precisely they are doing about it before making the purchase and hopefully there will be a coherent response. Some niche brands (such as “FairPhone”) make specific guarantees whilst helping to maintain trade with conflict-free miners in the DRC, many steps down the supply chain. For those only interested in the hard stuff, Fairtrade Gold is also available, where miners will receive a minimum price of 95 per cent of the London Bullion Market Association (LBMA) price for their gold.

For those of you who think it is just western governments think about this, think again. Global Witness does not often commend a government but it did on 24 October 2014 when the Chinese Chamber of Commerce of Metals, Minerals and Chemicals Imports and Exports, which is supervised by the Ministry of Commerce, launched its due diligence guidelines for Chinese mining companies operating abroad. These guidelines cover a range of environmental, labour and human rights considerations. This is part of a wider trend towards a stronger focus on companies disclosing payments to host governments in order to fight corruption, as highlighted by the Extractive Industries Transparency Initiative, as well as the reporting criteria of an increasing number of stock exchanges. In Switzerland, one of the leading global hubs in commodity trading, the Government has committed itself to bringing the industry and civil society around a table to agree standards and an implementing mechanism. It is a shame, at least to me, that the recent European Commission proposals stopped short of requiring companies to report on such issues, and that the American Petroleum Institute still fights mandatory disclosure of revenues as set out in Dodd Frank 1504.

On 2 December I have the privilege to moderate a discussion in the United Nations in Geneva (as part of the UN Annual Forum on Business and Human Rights) where representatives of both the US Government and China will elaborate further on their plans, as well as perspectives from key mining countries such as Chile and Myanmar.

There is much moving in the wrong direction in the world at the moment, but for those looking for stars to wish upon, here is one – that governments from all corners of the planet might increasingly cooperate to ensure global supply chains are free of conflict minerals and human rights violations. There are no awards to be given out, the domestic nature of mining in all these and other countries is still far too hazardous and communities all too often adversely impacted upon and inadequately consulted. But if we can all help to make state-state cooperation on such issues more normal, then there is a greater chance that business too will not compete on their social and environmental responsibilities. Conflict-free metals and minerals – what better gift could there be?