“Reversing the Resource Curse”: Promoting Transparent, Effective, and Accountable Governance

From August 26th-30th, ACET, in partnership with the Ford Foundation, hosted a two-day meeting and gold mine visit as part of their global initiative on Promoting Transparent Effective and Accountable Government (TEAG).

Organized to promote dialogue on social, economic, and political issues affecting the growth of the extractives sector in several African countries, participants discussed key issues contributing to the “resource curse” phenomena and their development dynamics. The third day included a site visit to the AngloGold Ashanti gold mines in Obuasi, allowing participants to learn more about Ghana as a case study, with a focus on the AngloGold Ashanti Mining program.

Background on the “Resource Curse”

Tackling the “resource curse” is a global challenge. The term commonly defines how the governance of natural resources has impoverished people living in the areas of resource extraction. Due to the lack of transparency, accountability, and community participation, people living in the extraction areas have in general, not benefitted from the exploitation of the natural resources. In such areas, including the oil rich areas of Indonesia and Nigeria, there has been endemic poverty amid plentiful natural resources that have been exploited for over half a century.

This poverty is exacerbated in part by weak or corrupt institutions, government mismanagement of revenues, and a failure to re-invest in projects that benefit the public–such as infrastructure, education, and healthcare. Often, citizens are not able to hold their governments, or transnational corporations accountable for this abuse of power because they lack information about their country’s revenues and expenditures, and the deals it has made with those extracting the resources from their territories.

Aside from government mismanagement of resources and weak, ineffectual, unstable, or corrupt institutions, the “resource curse” can also be attributed to other causes, such as declining competitiveness of other economic sectors (caused by appreciation of the real exchange rate as resource revenues enter the economy); and/or volatility of revenues from the natural resource sector due to exposure to global commodity market swings. Activities of transnational corporations in transfer pricing, tax avoidance, illicit financial transfers and corruption also play a key role in fracturing governance systems in these states.

Access to financial information alone will not eradicate the resource curse, but it is an essential precondition. Companies’ mining operations typically take place in multiple host countries, and contracts and payments to these other countries are not usually disclosed to the public. However, if companies made information about these payments available, civil society and investors could monitor whether or not these public revenues are re-invested into projects that actually benefit the public.

Below is the program agenda for the two-day dialogue, where you may download background papers and presentations of the various presenters.

Monday, Day 1

Overview of the Importance of Extractive Industries and Issues in each continent

• Africa – Prof. Bayo Olukoshi, UN Institute of Development and Economic Planning (UNIDEP), (Senegal)
• Asia – Ms Maryati Abdulla, Publish what you pay (Indonesia)

• Latin America –  Mr Eduardo Titelman, (Chile)

Round Table Discussion: The Extractive Sector – Industry and Development Challenges in Ghana

• Prof. Joe Amoako-Tuffour, ACET – An Overview

• Ms Sheila Khama, ACET – Managing Challenges in Artisinal Mining. Case study on Newmont’s CSR programme

• Ms Marie Lintzer. Revenue Watch Institute (RWI), Ghana’s place on the Resource Governance Index (RGI)

Transparency in Extractive Industry Governance

Chair: MsMia Steinle – Project On Government Oversight, POGO. (USA)

Discussants:

• Mr Francisco Craciato – FUNDAR (Mexico)
• Mr ShamisoMtisi – Zimbabwe Environmental Law Association, ZELA (Zimbabwe)
• Mr. SuyotoMustajab–The Regent of Bojonegoro, Government of Indonesia. (Indonesia)

Public Finances and Illicit Financial Flows

Chair: Tendai Murisa – Trust Africa (Senegal)

Ford Foundation programme Support : Joseph Gitari (Lagos, Nigeria)

Discussants:

• Ah Maftuchan, PRAKARSA (Indonesia)

• Mr Gerardo Castillo,Societas Social Analysis Consultant (Peru)

• Dr Donald Deya, Pan Africalawyers Union (Tanzania)

Tuesday, Day 2

Extractive Resources for Poverty Reduction

Chair:  Ms Anne Mayher – International Alliance on Natural Resourcesin Africa, IANRA (South Africa)

(TBC)

Ford Foundation Programme Support: Alex Irwan (Jakarta, Indonesia)

Discussants:

• Mr. Suyoto Mustajab, The Regent of Bononegoro, Government of Indonesia. (Indonesia)

• Mr Isaac Isuoka, Social Action (Nigeria)
• Mr Moussa Ba, Oxfam America (Senegal)

Environmental Sustainability and Community Rights to Natural Resources

Chair:  Mr Ledum Mitee – Nigeria Extractive Industry Transparency initiative (NEITI)

Ford Foundation programme Support: Nikki Naylor (Johannesburg, South Africa)

Discussants:

• Ms  Beverley  Besmos , Revenue watch/Bantay Kita (Phillipines)

• MsIkalAngelei,  Friends of Lake Turkana (Kenya)
• Ms Victoria Ohaeri,  Spaces for Change (Nigeria)

Panel Summary Presentation:

Thursday, Day 4

Transparency in Extractive Industry Governance

Moderators: Dr. Muzong Kodi / Mia Steinle

Public Finances and Illicit Financial Flows

Moderators: Prof. Joe Amoako-Tuffour / Tendai Murisa

Poverty Reduction and Economic Development Outcomes

Moderators: Dr. Yao Graham / Ms Anne Mayher

Environmental Sustainability and Community Rights to Natural Resources

Moderators: Dr. Cornis Van Der Lugt / Ledum Mitee