Environment Programme Environmental grievances along the Extractive Industries Value Chain Dag Seierstad, UNEP
Mismanagement of oil exploitation sparks civil uprising in Ogoniland, Nigeria Uprisings in Ogoniland began in 1990s over unfair revenue sharing and environmental degradation. 13% goes to state but none reaching communities Shell suspends operations in 1993 loosing social license to operate. Leaving all infrastructure in place and forgoing billions in revenues. Oil theft and bunkering becomes widespread. 100,000 barrels per day are stolen. Environmental contamination is chronic and severe. Infrastructure deteriorates.
Mediation process to resolve the Ogoniland conflict UNEP provides technical support and facilitation
Natural resources are important to conflict Natural resource exploitation fueled or financed (UNEP, 2009): 40-60% of civil wars over past 60 years At least 18 violent conflicts since 1990 Attention to natural resources in peace agreements has increased dramatically (over last 25 year): 1989-2004: More than 50% of agreements have NR provisions (51 of 94) 2005-2014: All key agreements have NR provisions
Extractives are important across conflict cycle Frequency by countries (n=56) 100% 90% Role of Natural Resources in Conflict (From 1990, Conflicts over 1,000 battle deaths) 80% 70% 60% 50% 40% 30% 20% Land Extractive Renewable Water 10% 0% Contributing factor Conflict financing Role Targeted during conflict In peace agreement
Natural resources are never the only driver of conflict. They always interact with other tensions and stress factors. Natural resources contribute to conflict Competition over scarce resources Inequitable access, ownership or benefits Drivers of conflict over natural resources Unclear or overlapping rights and laws Major environmental degradation Lack of transparency and access to decisions Poor dispute resolution capacity Transboundary impacts Interact with other socio-economic, political, security tensions and stresses Violent conflict Weak Institutions and governance Strong Conflict de-escalation and resolution
Three main risks from resource exploitation Resource curse and corruption Violence and conflict Environmental degradation / disasters Mitigating these risks are inter-related components of good resource governance (is there a one-shot chance to get it right?)
Resource revenues are a key source of income for many post-conflict countries Oil revenues represent more than 98% of South Sudan s government budget. On average, 50-80% of a post-conflict country s exports come from natural resources.
DR Congo: Mineral reserves alone are estimated to be worth US 24 trillion. More than half of the country is covered by resource concessions. Hydroelectric potential could power more than half of Africa.
Levels of Peace and Conflict The different roles of natural resources across the conflict cycle RISKS Armed conflict Weapon of war Damaged by conflict Crisis Fueling and financing conflict Incentive for peace spoiling Unstable Peace Causing tensions and grievances Economic incentive for peacemaking and confidence building Illegal exploitation and trade Stable Peace (basic order) PREVENTION AND EARLY WARNING Entry point for dialogue Employment and livelihoods Durable Peace (just order) Good resource governance TIME OPPORTUNITIES Revenues and basic services
Conflict drivers are specific to each natural resource but difficult to disentangle Extractive Resources (Oil/gas, minerals, commercial timber, gems) Conflict Drivers Ownership Wealth sharing Negative impacts Unmet expectations Decision making Resource curse Land (Farming, grazing, settlements) Conflict Drivers Insecure land tenure Lost access & damage Marginalization Loss of customary practices Overlapping claims Renewable Resources (Water, wood, fisheries, wildlife) Conflict Drivers Common property Increasing scarcity Natural variation Lost access & damage Poor governance
Early warning indicators in resource rich weak states High prices and volatility, more competition to secure supplies, less trust and cooperation Transnational organized crime and interactions between illicit and licit networks and rebel groups Non-transparent natural resource management and revenue sharing Supply chains without transparency and accountability Absence of industry leaders, lack of compliance with regulations National level institutions, laws and policies cannot keep pace with level of exploration and investment. Lack of state control over territory Lost social license to operate Bad deals with multinationals
Broadening and deepening Peacebuilding the EI and value chain to reduce grievances Natural Resources Linkages Strategic framework Exploration and Discovery Awards of contract and licenses Construction and operations Regulation and monitoring of operation Collection of taxes and royalties Revenue distribution and management Implementation of sustainable development policies and site closure PRSPs Green Economy Natural resource legislation Governance capacity Management plans Deciding to explore and develop EI sector Public debate Legitimate process and decisions Competitive bidding Transparent terms Env./Social IA Benefits sharing Grievance mechanisms Monitoring of benefits sharing Sanctions Savings, debt repayments, infrastructure, basic services Exchange rates Track and audit expenditures Access to information Community Prior informed awareness consent Up/downstream Transparency Strategic IA economic linkages Taxation Legal framework Local employment policies and EI vision content Track and Public inclusion EIA/SIA monitoring audit Decide to extract Geo-mapping extractive industries in fragile states and emerging economies Cold Deep Fragile Economic diversification Asset transformation Site rehabilitation Sustainable practices
Natural resources potential areas of priority with SDG 16 as entry point 1. Conflict early warning: Develop and use early warning systems for natural resource driven or financed conflicts and support conflict prevention initiatives with natural resources as entry points. 2. Peace agreements: Work to follow-up natural resources in peace agreements,directly or indirectly as the basis for future reforms. All peace agreements globally in last 10 years include NRM provisions 3. Peacekeeping and environmental crime: Assess threat financing from environmental crime and ensure peacekeeping forces are mandated and equipped to monitor and interdict illicit resource exploitation. 4. Conflict-sensitize the EI value chain: Use SDG 16 to support an extractives sector with a legitimate strategic framework, inclusive processes, transparent and accountable systems with grievance mechanisms and benefits sharing
Natural resources potential areas of priority with SDG 16 as entry point 7. Development should not be anchored on high-value natural resources alone: Countries should not focus exclusively on extractives resources for development. Diversified approaches using all natural resources provide less vulnerability to commodity price booms and busts. Green economy approaches can be more economically stable and distribute benefits in a more equitable manner. 5. Capacity building for resource management: Countries with newly discovered oil, gas and minerals should be encouraged to build strong legal and institutional framework for natural resource governance before large concessions are issued. Once funds start flowing, it is difficult to make reforms. 6. Resource transparency: Make commitments and signup to international instruments that promote resource transparency, public participation, and accountability. EITI is a good example, MAP-X is a part of the future toolkit. Transparency contributes to trust building. MAP-X
Knowledge platform and community of practice: www.environmentalpeacebuilding.org Levels of Peace and Conflict Armed conflict Crisis Unstable Peace Stable Peace (basic order) Durable Peace (just order) PREVENTION AND EARLY WARNING www.unep.org/ecp