State of the Planet

News from the Columbia Climate School

Remembering Resource Interdependence

By Shefa Siegel

Shefa Siegel is lead environmental policy researcher at the Vale Columbia Center on Sustainable International Investment, a joint center of the Earth Institute and Columbia Law School.

When the United Nations created the Technical Assistance Administration—the agency that preceded the UN Development Program—in 1950, it chose as its director an erudite historian and civil servant named Hugh Keenleyside. Unknown in the new internationalist scene, Keenleyside held two important credentials: he was Canadian, and he knew something about mining.

At the time, Keenleyside was Canada’s deputy minister of mines and a proponent of “resource interdependence,” a theory built atop the devastating residue of total war.

Mineral Extraction machinery. Source: Jimmy Harris 2009

Resource interdependence meant careful, internationally coordinated mineral extraction, a system viewed by Keenleyside as essential to preventing mineral supplies from being wasted again in “the barren struggles of war.”

Though he served the UN for a decade, Keenleyside is a forgotten founder of international development. Lost with him, it seems, was the notion that our minerals and our peace are interdependent.

The more resource-dependent the world became in the postwar period, the less we examined the international relations of natural resources. Even reports and books accompanying landmark environmental agreements—the Stockholm Declaration, Brundtland Commission, and Rio Declaration—devote just a few passages to questions of resource extraction.

Only in the last decade has vocal public discussion about global resource policy emerged. A new ethic is taking root around the principle of transparency, particularly tracking revenue transactions between the private and public sectors in extractive industry projects.

This transparency movement has sparked advocacy and legislative activity in the United States, United Kingdom, and Canada which host markets for much of the world’s trading of mining shares.

Ideally, legislating revenue transparency injects fairness into resource equations where fuzzy math and corruption are common. The hope is that disclosure and access to information will help re-balance the way power and profit are distributed among the principal holders of resource rights.

But to the extent that revenue transparency points in the direction of increased fairness, it remains the map rather than  the territory. The deeper dilemma is that we no longer have a language to describe the territory.

We are witnessing an astonishing escalation of commodity prices and expansionary mining activity. This growth is testing the limits of ecological sustainability by increasing demand for energy, water, and land just as climate, aquifers, and soils are reaching intolerable stress levels.

And in the mineralized areas where extraction is expanding, we are seeing heightened tension, resource competition, and conflicts escalating into violence. Especially—but not only—in Latin America, opposition to mining is rapidly becoming a populist issue.

But the cause of poverty, ecological deterioration, and conflict in these places is not revenue obscurity: It is the failure to allocate resources equitably, and to make room for multiple economic uses of land and resources.

Major multinational miners are operating with 120 year-old business practices based on land consolidation, externalizing environmental costs, and minimizing the need for labor. Many of the mines now expanding possess marginal grades of ore; they are viable only because of high commodity prices, and because the size of concessions enables the processing of millions of tons of ore.

No matter how transparent these arrangements, for smallholder farmers and miners these conditions are damaging. Neither group has access to farms and claims large enough for their operations to be economical. And losing land and mineral rights to consolidated concessions makes it harder to gain credit for purchasing inputs or equipment needed to make smallholder economies work.

Over a century ago, when Standard Oil discovered there was a fortune to be made in the copper deposits of the Anaconda in Montana, Henry Rogers and the Rockefellers consolidated all the claims around Butte to create Amalgamated Copper, the largest producing and fabricating copper company in the world.

Interior View of Anaconda Copper Mine in Butte, MT. Source: University of Idaho Library’s Digital Collections

Impressive as it was—mining 12.5 percent of the world’s copper, smelting 18 percent, refining 22 percent, and fabricating 20 percent—Amalgamated Copper was a monopoly. After more than a decade of legal battles to defeat all competitors and accumulate more wealth and capital than anybody thought possible for a metals company, Teddy Roosevelt busted Amalgamated Copper.

Today’s transparency movement is building a foundation for fairness, but it is not sufficient for managing the inefficiencies and unsustainability created by modern consolidated mining operations.

We have reverted to a late 19th century relationship to extractive industries, one that required a progressive movement to confront monopolistic control of resources. And we need to create a morally serious conversation about the scale of major mining concessions and what it means for other economic actors needing access to land and resources.

This deeper progressivism is not yet on the table. It will have to be if we want to resolve the core inequalities driving mineralized parts of the world into resource competition, ecological collapse, and violence.

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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/.

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