High-Value Resources: The Other Side of the Coin

The high-profile conviction of Charles Taylor for war crimes linked to exploiting Sierra Leone’s diamond mines has reinforced the negative attention which high-value resources (HVRs) often receive.But the same high-value resources that have been linked to civil conflict can also contribute to promoting development in post-conflict countries. This possibility was explored in a discussion during the all-day conference, Identifying Lessons for Natural Resource Management in Post-Conflict Peacebuilding, held at Columbia University on April 25.

Moderated by Charles Kelly of the ProAct Network, the roundtable included Shefa Siegel of the Vale Columbia Center on Sustainable International Investment, Cymie Payne of Rutgers University’s School of Law, Lalanath de Silva of the World Resources Institute, Annica Waleij of the Swedish Defence Research Agency, and Kazumi Kawamoto of Columbia University’s School of International and Public Affairs. The topics discussed included gold mining in Guinea and Tanzania; diamond mining in Sierra Leone; the role of the UN Compensation Commission in relation to environmental damage resulting from the Gulf War; and environmental stewardship as part of peacekeeping operations.

A recurring thread in the discussion was how critically important transparency is in ensuring that high-value resources strengthen rather than undermine development. In the case of diamond mining in Sierra Leone, a number of measures have been taken to ensure that transparency is a part of the mining process, for example, the Diamond Area Community Development Fund, which aims to return 0.75% of revenue from exporting diamonds to the communities in which they were mined. Between 2001 and 2006 the Diamond Area Community Development Fund returned approximately $3.5 million, using it to spur employment and support education by rebuilding schools. More importantly, the money was used to address grievances in the mining communities, specifically, on the part of marginalized youths, by encouraging local communities to participate in the decision-making processes concerning natural resources and development. Allegations of misappropriation of funds, which had resulted in a lack of disbursements in 2006, have been addressed by new procedures enacted in 2008, which entail increased community participation, and monitoring and evaluation.

The Extractive Industries Transparency Initiative is another example of moving towards using high-value resources for good. While voluntary, the initiative puts in place measures to improve transparency in regard to the revenue generated from extractive industries, including oil and diamonds. Its purpose is to ensure that the amount of revenue governments claim they receive from private companies matches what private companies claim they delivered. It is an admirable initiative, however, it does not go beyond auditing, and it lacks any transparency regarding how governments are spending that money, since that information is off-limits due to issues of infringement on national sovereignty. Parliaments could, however, tackle this task by providing oversight regarding how that revenue is spent.

A related issue is the need for due diligence to ensure that the resources extracted comply with ethical standards. But because it is an expensive process, companies may feel economic pressure to seek out other supply sources where requirements are not so stringent. This in turn creates a vacuum which poorly performing companies may fill, further undermining transparency initiatives and creating conditions that make it difficult to beneficially develop local communities.

For a comprehensive treatment of the topic of high-value resources, turn to the first in a six-volume series—High-Value Natural Resources and Post-Conflict Peacebuilding— that inspired the April 25 conference. Compiled by the Environmental Law Institute (ELI), in partnership with the United Nations Environment Programme (UNEP), the University of Tokyo and McGill University, the series aims to identify and analyze lessons in natural resource management and post-conflict peace-building, with contributions from practitioners, policy makers, and researchers. Other books in the series address land, water, livelihoods, assessing and restoring natural resources, and governance.

This article is one in a series emerging from the conference, “Identifying Lessons for Natural Resource Management in Post-Conflict Peacebuilding,” held at Columbia University April 25, 2012, and co-hosted by the Earth Institute and the Center for International Earth Science Information Network (CIESIN), UNEP, ELI, the University of Tokyo, and McGill University; in cooperation with the Advanced Consortium for Conflict, Cooperation and Complexity and the Vale Columbia Center on Sustainable International Investment. For more information about the conference and the book series, please go to http://environmentalpeacebuilding.org/.