High-Value Natural Resources and Post-Conflict Peacebuilding

Päivi Lujala, Siri Aas Rustad, P�ivi Lujala

• Publisher: Routledge
• Year: 2012
• Print ISBN: 9781138471719
• eBook ISBN: 9781136536694
• Topic: Law
• Subtopic: Environmental Law
• Index: Law

For most post-conflict countries, the transition to peace is daunting. In countries with high-value natural resources – including oil, gas, diamonds, other minerals, and timber –the stakes are unusually high and peacebuilding is especially challenging. Resource-rich post-conflict countries face both unique problems and opportunities. They enter peacebuilding with an advantage that distinguishes them from other war-torn societies: access to natural resources that can yield substantial revenues for alleviating poverty, compensating victims, creating jobs, and rebuilding the country and the economy. Evidence shows, however, that this opportunity is often wasted. Resource-rich countries do not have a better record in sustaining peace. In fact, resource-related conflicts are more likely to relapse.

Focusing on the relationship between high-value natural resources and peacebuilding in post-conflict settings, this book identifies opportunities and strategies for converting resource revenues to a peaceful future. Its thirty chapters draw on the experiences of forty-one researchers and practitioners – as well as the broader literature – and cover a range of key issues, including resource extraction, revenue sharing and allocation, and institution building. The book provides a concise theoretical and practical framework that policy makers, researchers, practitioners, and students can use to understand and address the complex interplay between the management of high-value resources and peace.

High-Value Natural Resources and Post-Conflict Peacebuilding is part of a global initiative led by the Environmental Law Institute (ELI), the United Nations Environment Programme (UNEP), the University of Tokyo, and McGill University to identify and analyze lessons in natural resource management and post-conflict peacebuilding. The project has generated six edited books of case studies and analyses, with contributions from practitioners, policy makers, and researchers. Other books in the series address land; water; livelihoods; assessing and restoring natural resources; and governance.

PART 1

Extraction and extractive industries

Introduction

In post-conflict countries, proper management of high-value natural resources can yield the necessary revenues to put the economy back on track and allow recovery from conflict. But such resources can also be a source of tension and even violence: for example, former belligerents who are unsatisfied with the terms of the peace agreement may seek opportunities to finance a new uprising; extractive companies may attempt to take advantage of disarray to secure lucrative resource concessions; and corrupt government officials may seek opportunities to enrich themselves and their constituencies. Local populations, meanwhile, are desperate to rebuild their homes and their lives; often depend on natural resources for their livelihoods; and may be suffering not only from the effects of conflict, but also from the negative side effects of resource extraction.

It is imperative, in post-conflict settings, to curtail potential peace spoilers’ access to resources that have previously financed conflict or that could be used to finance renewed conflict. At the same time, to avoid exacerbating old grievances or creating new ones, it is important to minimize the harmful social and environmental consequences of extraction, to ensure that local residents participate in decision making about extraction projects, and to maximize benefits to local communities. Finally, it is essential to ensure that contracts for large-scale resource extraction are fair, and that the state receives a fair share of revenues. Each of the six chapters in part 1 approaches these issues from different angles.

In most post-conflict countries, peace is fragile at first, and some groups may actively seek to destabilize it. Whatever the motivations for such actions, they can be financed by readily extractable resources; curtailing these groups’ access to resources may thus be crucial to promoting peace. In “Bankrupting Peace Spoilers: Can Peacekeepers Curtail Belligerents’ Access to Resource Revenues?” Philippe Le Billon evaluates United Nations initiatives designed to prevent peace spoilers from gaining access to resource revenues. Drawing on examples from eight countries, Le Billon concludes that the UN should mandate peacekeeping missions to engage more directly with resources that could finance conflict, both at extraction points and along transit routes, and that such efforts should be backed up by targeted commodity sanctions and careful monitoring.

Foreign direct investment in the natural resource sector is common in resource-rich countries, and post-conflict countries are no exception. From a peacebuilding perspective, foreign direct investment is important because it brings private sector resources to bear on the reconstruction of post-conflict economies and societies. While it is often in a company’s best interest to act responsibly—whether to enhance its reputation, secure financing, or avoid costly conflicts with local populations and host governments—firms sometimes need to be compelled to adhere to corporate social responsibility standards. In other cases, companies may have the will but may lack understanding of the particular challenges posed by resource extraction in post-conflict situations. The voluntary standards outlined in Jill Shankleman’s chapter, “Mitigating Risks and Realizing Opportunities: Environmental and Social Standards for Foreign Direct Investment in High-Value Natural Resources,” are designed to help extractive companies engage in responsible natural resource exploitation. Although the standards were not developed specifically for post-conflict settings, they are relevant to peacebuilding because, among other requirements, they call for investors to evaluate, monitor, and respond to risks to the environment, land rights, migration, employment, and security. The chapter describes the standards, illustrates their application in post-conflict countries, and evaluates their strengths and weaknesses with respect to peacebuilding.

The phrase odious contracts is used to refer to contracts that grant extractive companies unduly high profit margins, generous tax exemptions, or other benefits; that are signed under conditions that lack transparency and accountability; that are not approved by local communities; or that fail to stipulate appropriate environmental and social standards. Such contracts can not only lead to significant losses of public revenues, but can also generate grievances and conflict. In “Contract Renegotiation and Asset Recovery in Post-Conflict Settings,” Philippe Le Billon uses two case examples—Liberia and the Democratic Republic of the Congo—to consider the challenges involved in reviewing such contracts. The chapter also examines the theft of revenues during conflict, either by rebels or corrupt government officials. Le Billon argues that although asset recovery (which involves tracking, freezing, and repatriating stolen revenues) has a mixed record, it is an important means of signaling an end to impunity for war profiteering.

The topics of transparency, accountability, participation, and environmental and social responsibility are further developed in “Reopening and Developing Mines in Post-Conflict Situations: The Challenge of Company-Community Relations,” by Volker Boege and Daniel M. Franks. Many post-conflict governments are weak—and, in some regions, virtually absent. Where state institutions lack capacity and effectiveness, local populations may adhere to local traditions and customary laws, under which resource concessions granted by the central government lack legitimacy. In such cases, company-community relations become crucial in obtaining local consent for extraction projects. Focusing on case examples from Papua New Guinea and Guatemala, Boege and Franks illustrate the importance of dialogue, consultation, and public participation in efforts to gain legitimacy in the eyes of the population. The chapter also examines the role of company-community relations in finding solutions that are not only beneficial for extractive firms, local communities, and host governments, but that also contribute to peace.

Company-community relations are explored further in Kazumi Kawamoto’s “Diamonds in War, Diamonds for Peace: Diamond Sector Management and Kimberlite Mining in Sierra Leone.” The first portion of this chapter traces the history of the relationship between diamonds and conflict in Sierra Leone. The second focuses on an industrial diamond-mining site where forced relocations, contention over promised amenities, and failure to take local communities’ concerns into account led to a violent riot. Although this one incident does not seem to have jeopardized long-term peace, Kawamoto’s chapter provides a cautionary tale about the importance of taking grievances seriously and including local residents in decisions about extraction. When such incidents are allowed to proliferate, they may not only create serious tensions, but may also divert attention and revenues from other pressing issues, and thereby prolong or even destabilize peacebuilding.

In the final chapter of part 1, “Assigned Corporate Social Responsibility in a Rentier State: The Case of Angola,” Arne Wiig and Ivar Kolstad discuss the responsibility of international oil companies in a nation where the government has failed to meet the socioeconomic needs of the population. Wiig and Kolstad argue, on the basis of the assigned-responsibility model, that because the government has failed to meet its responsibility, and the international community and civil society have failed (or were unable) to take secondary responsibility, the large multinational oil companies doing business in Angola are morally obligated to step into the breach and advocate improved governance. This obligation is especially strong because the companies have been financing the country’s patronage system, have benefited from the dysfunctional institutions that are in place, and have sufficient power to push for improved governance.

Taken together, the chapters in part 1 focus on the ways in which governments, extractive industries, the international community, and civil society can strengthen the management of high-value resource extraction to promote peace. The principal areas of focus are preventing potential peace spoilers from obtaining access to resources, reviewing and addressing contracts signed by previous governments, developing conflict-sensitive extraction projects, and ensuring community participation in decision making about extraction projects.

Bankrupting peace spoilers: Can
peacekeepers curtail belligerents’
access to resource revenues?

Philippe Le Billon

High-value natural resources—such as timber, minerals, and opium—are often sources of tension and violence during post-conflict transition periods. Resource production areas and trade routes are commonly hot spots for armed groups, including security forces that have been demobilized but not disarmed and reintegrated; they also tend to be theaters for clashes between competing groups that run protection rackets for illegal activities. Armed groups rely on resource sectors for survival; they may also engage in resource-related human rights abuses—as, for example, when security forces forcibly displace local residents or migrant workers, or compel them to engage in forced labor in order to open up land for resource projects.

Curtailing belligerents’ access to weapons has been a major focus of international security actors. Although weapons embargoes and disarmament initiatives are important, they are difficult to implement and generally insufficient to secure long-term peace. Curtailing belligerents’ access to resource revenues provides a complementary and possibly more effective approach, particularly when it is combined with reforms that address both the “enabling effect” of resources on armed violence and the broader economic, political, and environmental causes of conflict associated with resource sectors.

One approach to curtailing belligerents’ access to revenues and reducing the human rights abuses associated with resource sectors is to mandate peacekeeping missions whose express responsibility is to prevent peace spoiling and protect civilians. Such a mandate could be backed by commodity sanctions that are contingent on (1) the achievement of peace-process benchmarks and (2) adherence to legal (or at least specified) practices in a given resource sector. A logging sector, for example, can be closed for exports until sound regulatory institutions are in place and until the state has the capacity, legitimacy, and stability to ensure their effectiveness. Although there are major obstacles to deploying peacekeeping forces to curtail access to resources, which will be discussed in the course of the chapter, the approach nonetheless offers a number of benefits.¹

The chapter is divided into five major parts: (1) a brief review of the principal instruments that the United Nations Security Council (UNSC) has used to address “conflict resources”;² (2) a discussion of strategies for controlling access to conflict resources; (3) a summary of the work of eight UN peacekeeping missions in contexts that involved conflict resources, with particular attention to the Democratic Republic of the Congo (DRC); (4) a summary discussion of the issues associated with the deployment of peacekeepers in efforts to curtail access to conflict resources; and (5) a brief conclusion.

UN INITIATIVES

UN initiatives to address the links between high-value natural resources and armed conflicts have included economic sanctions, expert panels, and specific measures undertaken as part of the peacemaking, peacekeeping, or peacebuilding tasks carried out by UN missions.³ Through resolutions passed in the UNSC and General Assembly, the UN has also supported a number of other initiatives, such as the Kimberley Process Certification Scheme, which is designed to stem the trade in conflict diamonds. And through the UN Global Compact, the UN has supported corporate social responsibility—most notably by raising awareness and standards of practice among extractive companies operating in conflict zones.

Commodity sanctions have targeted rebel groups by curtailing their access to resource revenues; examples include the Khmer Rouge, in Cambodia (logs); the National Union for the Total Independence of Angola (União Nacional para a Independência To...

Table of contents

• Cover
• Halftitle
• Title
• Copyright
• Contents
• List of Figures and Tables
• Preface
• Foreword
• Acknowledgments
• High-value natural resources: A blessing or a curse for peace?
• PART 1. Extraction and extractive industries
• PART 2. Commodity and revenue tracking
• PART 3. Revenue distribution
• PART 4. Allocation and institution building
• PART 5. Livelihoods
• Appendix 1. List of abbreviations
• Appendix 2. Author biographies
• Appendix 3. Table of contents for Post-conflict peacebuilding and natural resource management
• Index