As some 40 percent of conflicts that threaten democracy in developing resource-rich countries are directly attributed to inequitable mineral resource exploitation and revenue distribution, experts at the recent Annual Democracy Forum 2014 in Gaborone, Botswana called for strong enforcement of legal frameworks to ensure fairness and socio-economic development for all in managing those resources.
“The success of these depend on government’s willingness not only to sign a treaty but to pass legislation on it and enforce it. But unfortunately not all countries give effect to what they signed, or else legislation is passed but enforcement is weak,” Huguette Labelle, former chair of the board at Transparency International, told Devex on the sidelines of the conference co-organized by International IDEA and the government of Botswana.
Referring to legal instruments including the Extractive Industries Transparency Initiative, the African Governance Architecture Convention, and the United Nations Convention Against Corruption, Labelle explained that though overall these are important, some frameworks have more traction than others.
Here are a few tips we gathered from participants at the forum towards effective natural resources management, which subsequently brings about wealth and prosperity to citizens and ensures that democracy is protected.
1. Plan for sustainable management of natural resources. Planning is important because of the stress the resources are under, including the stress on water and land. Countries were advised to map their resources so they know exactly where they are, and transition over time to recyclable products and renewable energy in order to preserve precious natural resources.
2. Manage revenues for the benefit of the present and future generations. Careful and equitable revenue distribution will enable local communities to also see a return on the extraction of natural resources from their community. This can help prevent conflicts, as well as reinforcing legislation and integrating natural resources into national poverty reduction plans. Governments were also advised to set up heritage funds to hold some of the revenues from natural resources to mitigate future problems when resources are depleted and countries lack alternatives for economic development.
3. All revenues from natural resources must be disclosed in an easily accessible and timely manner. Labelle said revenue records should be recorded in a way that not only accountants can understand them, and neither should they be parked on somebody’s desk. Governments were advised to prevent illicit financial flows from leaving their borders and work hard to ensure their financial institutions are not complicit. A public register of ventures and the publication of all resources both by industry and by governments were suggested. All countries were also advised to sign on to the OECD Multilateral Exchange of Information on Tax agreement to prevent tax evasion.
4. Land management. Land tenure policies (registries of land stipulating which land is protected for agriculture or for forestry) and having a good administrative capacity for land management by the responsible entity can all prevent land grabbing and ownership of natural resources falling into the wrong hands.
5. Governments and extractives companies should find additional means to develop sustainable sources of income. As many mining jobs are now performed by machines instead of humans, firms were encouraged to embrace technology in order to avert risk but to be mindful also of employment creation. Jobs should be located in the countries where the natural resources are, and procurement should be undertaken locally. A deep collaboration between all stakeholders can build local capacity and this was highlighted as an essential element to private sector relations with communities.
6. Popular participation. Civil society must be involved from beginning to end in the whole natural resources development process, and companies should take into account the needs of the community and try to help solve its problems. Governments must remember that they are the trustees of the people, and people should hold them to account as such — especially on providing accurate information.
For all these recommendations on legal frameworks to be implemented, speakers agreed that strong political will is needed, as well as technical capacity, rule of law, a vibrant civil society, a free and responsible media, and empowered citizens. When all the above are in place, legal frameworks can ensure that natural resources effectively contribute to the development of present and future generations.
#DemocracyMatters is a three-week series exploring the intersection of democracy, development and natural resources management in partnership with International IDEA, the Institute for Democracy and Electoral Assistance.
Join the Devex community and access more in-depth analysis, breaking news and business advice — and a host of other services — on international development, humanitarian aid and global health.