The president of the ECOWAS Commission James Victor Gbeho had during the Second Ministerial Meeting on the region’s Mineral Development Policy held in October last year in Monrovia, Liberia set up a 10-member ad-hoc committee to monitor the adoption and implementation of the directive by member states.

“We are supportive of the entire ECOWAS process in this regard and call on all other West African countries to comply” said Eva Kouka, Oxfam America’s Extractive Industries Program Officer for the West African Regional Office. “We expect the regional body to adopt the Regional mining Policy later this year, and by 2014 the Regional Mining Code.”

“This a major step forward for protecting the rights of affected communities in Ghana, where mining is so important economically and where communities have suffered such severe impacts” said Keith Slack, Extractive Industries Campaign Program Manager of Oxfam America.

The Directive which was enacted by the 62nd Ordinary Session of the ECOWAS Council of Ministers held in Abuja, Nigeria in May 2009 places obligations on the mining companies to respect the rights of local communities. It provides, among others, in article 16, that “companies shall obtain free, prior and informed consent of local communities before exploration begins and prior to each subsequent phase of mining and post-mining operations; maintain consultations and negotiations on important decisions affecting local communities throughout the mining cycle”. Apart from the protection of the rights of the communities, the directive also aims at environmental protection and transparency and accountability in the mining sector.

“I would like to congratulate the government of Ghana for adopting this directive” said Richard Hato-Kuevor, Oxfam America’s Extractive Industries advocacy officer in Ghana. “Even though this is a bold step on the part of the government, I hope it is not the end. Measures should be put in place to ensure that these laudable principles are enshrined in our mining code for the benefit of all, especially communities affected by mining”.

Mass poverty in West Africa starkly contradicts the abundance natural resources including highly priced minerals. Oxfam America has been working in tandem with some local organizations in the region to ensure transparency and accountability and the protection of human rights in the operations of extractive industries. Recently, civil society organizations in Ghana under the umbrella of The Civil Society Platform on Oil and Gas issued a statement raising concerns about the intention of some interests in the legislature to amend some key clauses in the proposed Petroleum Revenue Management Bill 2010 that provides for a citizens-based transparency and accountability framework for ensuring transparent management of petroleum revenues. “We are disturbed about the absence of transparency provisions in the bill especially as regards bidding process for oil blocs” said Mohammed Amin Adam, the convener of the group.

As the bill is being voted, Oxfam America and its partners in Ghana expect the legislature in the country to complement their efforts in ensuring the existence of the necessary legal framework for good governance in the extractive industries.

The United States is the last of the four countries that originally voted against the UN Declaration to reverse its position. By endorsing the Declaration, the US affirms to the world that indigenous peoples have the right to be free from discrimination and forced assimilation, and the right of self-determination.

“The rights of indigenous people are often overlooked, ignored and violated, particularly when it comes to large-scale oil, gas, and mining projects,” said Raymond C. Offenheiser, president of Oxfam America. “Today’s endorsement by President Obama will strengthen indigenous people’s rights to make decisions about how their land is used and to be free from discrimination.”

While large-scale resource projects may bring opportunity for citizens of the nations where the resources are being developed, many of the poorest and most vulnerable, in many cases indigenous communities, are often excluded from the benefits that might be generated by these activities.

The Declaration enshrines the right of indigenous peoples to Free Prior and Informed Consent (FPIC), the principle that local communities must be adequately informed about development projects in a timely manner and be given the opportunity to freely approve (or reject) a project prior to the commencement of its operations. In particular, the Declaration calls on states to consult with indigenous peoples through their representative institutions to secure their consent prior to approving projects that would affect their lands or territories and other resources. This would allow and encourage indigenous communities to fully participate in the decision making process around such projects.

“Violations of indigenous peoples' basic human rights, such as rights to land, resources and the environment, often lead to disastrous consequences for these communities,” said Offenheiser. “We are pleased to see the US government take this long-overdue step towards addressing this situation and look forward to seeing the US government promote the principles of the Declaration, including FPIC, in its engagement with international financial institutions and other governments.”

By early 2011, estimates are that Ghana will be producing approximately 120,000 barrels of oil per day. The Jubilee field has 500 million barrels of proven reserves and a potential for over 1 billion barrels. The production rate is expected to supply more than $400 million to the government’s 2011 budget and around $1 billion per year into the country in the early years. Promising indications from adjacent exploration oil wells could mean even higher levels of production and reviews in the next few years.

The Ghanaian government must establish a legal framework that ensures transparent publication of oil payments received, open and competitive contract bidding and contract disclosure, and active monitoring and participation by civil society. While there have been some positive signs – Ghanaian President John Atta Mills promised disclosure of oil contracts in March 2009 and a petroleum revenue management bill tabled in the Ghanaian Parliament in July contained important transparency and safeguard provisions – with first oil right around the corner, the necessary laws and systems have not been put in place. Despite government commitments, oil contracts remain unavailable to the public.

“The Ghanaian Parliament is currently debating an oil revenue bill, and important provisions – such as a prohibition against using oil revenue as collateral for loans – have already been stripped out of the bill. A Petroleum Exploration and Production Bill, which had numerous weaknesses, has been shelved. Celebrations of first oil are clouded by the fact that the government has yet to establish an independent regulator since the Jubilee discovery was announced in 2007,” said Richard Hato-Kuevor, Oxfam America’s Extractive Industries Advocacy Officer in Accra, Ghana. “These oil laws involve national questions that require national consensus. There is simply too much at stake for Ghana to adopt inadequate laws to manage this massive industry.” 

The removal of a ban on using future oil revenues as collateral for loans is particularly worrying. Many oil producers around the world – such as Nigeria, Angola and Congo-Brazzaville – have gone deep into debt due to unsustainable oil-backed borrowing. Such loans, with steep interest rates and short repayment terms, are often taken out in secret with little or no parliamentary or public scrutiny. Recent press reports have noted that the state oil company, the Ghana National Petroleum Corporation, is working with Deutsche Bank and other private banks to secure a $500 million loan. The terms and purpose of the loan are not clear.

Ghana is one of the most peaceful and relatively prosperous countries in West Africa but remains poor with the majority  of Ghanaians living on less than $2 a day. While poverty needs are pressing, stabilization and savings funds must be established and funded to avoid the price shocks and wasteful spending in the early years of an oil boom, which have bedeviled other countries.

Historically, the exploitation of natural resources in Africa has far too often led to increased poverty and conflict, a phenomenon often referred to as “resource curse.” In 2009, Africa produced 13 percent of the world’s oil with great investment and exploration throughout the continent, but this has yet to translate into tangible benefits for Africa’s poor. In fact, resource-rich countries in Africa have actually experienced lower growth rates than countries with scarce resources.

“Oil wealth threatens the growing democratic accountability that has been built in Ghana’s recent history,” said Mohammed Amin Adam, convener of Ghana’s Civil Society Platform on Oil and Gas. “This industry presents very real risks to Ghana’s fragile economy, including incurring too much debt through oil-backed loans. We as Ghanaians need to see December 15th as a day to wake up to these challenges and hold our government accountable for the management of this enormous opportunity for the country.”

In March 2011, Oxfam will publish a “Readiness Report Card” analyzing Ghana’s efforts to prepare its oil boom.

Click here to download Ghana’s Big Test: Oil’s Challenge to Democratic Development (2009)

 This is an important step in the on-going effort by the ECOWAS member nations to adopt a uniform policy that will standardize the social, environmental, and financial requirements for mines in West Africa. Oxfam America has encouraged this effort because it will require mining companies to obtain the consent of local communities before mines can be established or expanded, and give communities a meaningful role in decisions. After member countries revise their laws, mines will have to comply with more stringent requirements for the environment, and financial transparency.

The committee will also make recommendations on measures to be taken for the effective implementation of the directive and also ensure that it is published in the National Gazette of member-states, a way for the government to show an official commitment to the directive. Senegal has taken the lead by remaining the only member-state to have published it in the National Gazette.

In the same vein, ministers responsible for mineral resources development in the region have recommended the establishment of a permanent forum to deal with matters affecting the mineral sector. This is a major decision at a recent one-day meeting of ministers know as ECOWAS Minerals and Oil Forum (ECOMOF).

Role for civil society

Commenting on these developments, Oxfam America’s Coordinator for Extractive Industries Program at its West Africa Regional Office in Dakar, Senegal, Ibrahima Aidara commends ECOWAS for the laudable initiative but decried the lack of adequate representation of civil society organizations.

“ECOWAS should widen the scope of consultation to all stakeholders including civil society organizations and representatives of mineral-bearing communities to make public policy formulation more participatory, inclusive, and democratic,” he says. “This will guarantee the protection of the rights of the communities and individuals directly affected by the activities of the extractive industries in the region.”

West Africa is replete with a rich diversity of mineral resources, but weak governance structures, corruption, injustice, and political instability have conspired to leave the vast majority among the poorest in the world. The president of the commission, James Victor Gbeho, says the ECOWS directive will have significant effects: “It is necessary to introduce norms and standards that would ensure, at once, the protection of the environment, social impact, harmonious labor relations, sustainable community development plans, and equitable land rights regime and transparent management of natural resources.”

Oxfam America through its Extractive Industries Program and working with its partners has been at the forefront of pushing for reforms in the extractive industries sector in the region to ensure the protection of human rights and the reduction of poverty.

The company previously had lost a court case to Manu when she was accused of trespassing onto what she explained was her own farm land. After hearing of her complaints over the loss of her palm tree, the company immediately opted to negotiate paid compensation rather than defend itself in a messy court case.

In a community where many facing situations such as Manu’s would have resigned to fate, it is seen as a triumph for human rights awareness and activism for Manu to insist on adequate compensation. She negotiated for and actually got paid the sum of 500 Ghanaian Cedi (about $350) for her loss. This is the highest sum ever paid as compensation for the loss of any crop in Ghana.

“The company knows that I know my rights and so they are very careful when dealing with me,” said Manu.

Ghana’s chamber of mines, an association of mining companies, generally sets levels of compensation in such cases. Normally, this body recommends payment of five Ghanaian Cedi (about $3) for a palm tree.

Instead, Manu demonstrated that palm trees are very important to the livelihoods of the people of Dumase because of their multiple uses—namely they produce palm oil, palm kernels, sponges, brooms, palm wine, and palm fronds.

“We have a cause to fight for and a goal to achieve,” says Manu. “Sometimes people are not happy with what you are trying to achieve, but you shouldn’t let opposition stop you.”

Ghana, like most of West African countries, is home to abundant mineral resources. But this has not reflected on the lives of the vast majority of people who remain poor. Oxfam America has been working through its partners like the Wassa Association of Communities Affected by Mining (WACAM) in Dumase and other communities to enlighten and empower local people to assert their rights when interacting with mining companies.

“Manu has, in fact, fought against the injustice of miners and their Compensation Committee,” says Daniel Owusu-Koranteng, the Executive Director of WACAM. “She upheld her right in line with the provisions of the Mining Act.”

Manu is one the beneficiaries of WACAM’s training programs and regularly puts her newfound knowledge to good use.

“It’s important to empower women in mineral-bearing communities so that they can gain skills, confidence and the ability to make decisions about their lives,” says Eva Kouka-Quenum, Oxfam America’s West Africa Extractive Industries Program Officer.

For four days, participants exchanged their experiences using "Getting It Right," a dynamic tool developed by Canada-based Rights & Democracy. Designed especially for communities and their support organizations, the tool enables teams to conduct HRIAs of private investment projects, such as infrastructure projects, agro-industry, dams, extractive industries, and other initiatives.

This report summarizes key lessons learned and recommendations from participants, based on their pilot experiences in Bolivia, Columbia, Ecuador, Peru, the Philippines, and the United States.

Lawyers for the National Roundtable on Metalic Mining in El Salvador reacted to the initial hearing, saying that the proceedings ignored the essential role of local communities in determining whether mining projects can or should go forward, and the environmental risks associated with such projects.

Pacific Rim applied for the operating license in 2005 to open a mining project in the department of Cabañas, in the north of the country. It is suing for losses incurred on investments made during exploration work. Pacific Rim filed the suit based on the Central America Free Trade Agreement (CAFTA), specifically chapter 10 on investments and chapter 12 on dispute resolution.

The economic and investment focus of the dispute was heavily criticized by Luis López, a lawyer for the National Roundtable on Metalic Mining in El Salvador. "Environmental issues and the rights of the local communities are not being discussed," he says. "This operating license is being treated as just another permit, without taking into account the fact that this country is very small and densely populated, and those issues [the environment and people’s rights] will only be addressed as secondary issues."

That is why the Roundtable, with the support of Oxfam America and the Center for International Environmental Law (CIEL) will be sending an 'amicus curiae'-- a friend of the court brief-- to the ICSID. This is a way for organizations and people directly affected to get involved in a case of this kind, between a transnational company and a government. "With the 'amicus curiae' we're going to introduce new elements that will have to be taken into account, such as the environmental issue" says López. "We want all aspects of the dispute to be discussed."

A second hearing is scheduled for August, when both parties will produce further evidence to support their positions. The dispute is expected to be settled in August or September of this year.

“With this level of shareholder support, Chevron can no longer ignore the call for transparency,” said Ian Gary, senior policy manager for extractive industries at Oxfam America, who attended the shareholder meeting. “We know oil revenues are too often squandered through corruption, internal conflict, and weak governance. This is an opportunity for Chevron to promote the rights of citizens by providing them with vital information about revenues coming into their countries. Transparency should not be a question for Chevron, it is central to accountable practice in the vulnerable countries where it operates.” 

The shareholder proposal was filed in December 2009 by Oxfam America and five institutions with Chevron holdings. Prior to the vote yesterday, shareholders and their proxies spoke in favor of this proposal to help reduce instability and insecurity in oil-rich countries through a transparent and accountable payment disclosure policy in all countries where Chevron operates. Two other global oil companies, Statoil of Norway and Talisman Energy of Canada, already disclose this information to the public.

 During his remarks, Mam Sambath, chairman of Cambodians for Resource Revenue Transparency, said: “Secrecy encourages conflict. In Cambodia, over the past decades, there have been numerous conflicts between communities and companies, and these have led to losses for both sides. We don’t want this to happen because we want Chevron to stay, and this is your opportunity to take leadership in Cambodia and help us ensure that your operations in Cambodia will be successful and beneficial to both your company and Cambodians.”

In 2008, Chevron paid more than $40 billion in taxes to governments around the world. Managed properly, these revenues can contribute to economic prosperity and stability in countries where Chevron and other companies operate. However, history has shown that oil company payments to governments as well as government receipts are often kept secret, leading to embezzlement, corruption, and revenue misappropriation, which, in many cases, has prevented oil revenues from contributing to economic development. 

In his address to shareholders, Ian Gary said: “Disclosing payments would complement Chevron’s existing efforts in initiatives such as the Extractive Industries Transparency Initiative. EITI has serious limitations. It is voluntary and only works where governments have the political will be transparent…Chevron works in many countries run by governments suspected of corruption and worse. Unfair or not, undisclosed payments raise popular suspicion regarding Chevron’s role in maintaining a system of financial secrecy. Ensuring that payments are transparent puts Chevron in a leadership position and turns the spotlight back on host governments.” 

With the results of yesterday’s vote, Oxfam America has the right to re-file this shareholder proposal with Chevron next year. Oxfam America will continue to call on Chevron and its shareholders to support disclosure of all payments to host governments.

In December of last year, Oxfam America and a number of fellow shareholders filed a resolution with Chevron calling for a comprehensive policy of publicly disclosing all payments made to governments of countries where the company operates. The resolution, which will be up for vote at the meeting today, aims to promote the rights of citizens in oil-rich countries by providing them with vital information about revenues coming into their countries.

“With this resolution, many shareholders have spoke and Chevron should listen. Oil revenues are too often squandered through corruption, internal conflict, and weak governance in resource-rich countries,” said Raymond C. Offenheiser, President of Oxfam America. “Chevron has an opportunity to stop sitting idly by while this happens under a veil of secrecy. By publicly disclosing all payments, these governments can be held accountable for using revenues for economic development and poverty reduction.”

In 2008, Chevron paid more than $40 billion in taxes to governments around the world. Managed properly, oil revenues can contribute to economic prosperity and stability in countries where Chevron and other companies operate. However, history has shown that oil company payments to governments as well as government receipts are often kept secret, leading to embezzlement, corruption, and revenue misappropriation, which, in many cases, has prevented oil revenues from contributing to economic development in these countries.

In Angola, a country where Chevron operates, more than $4 billion in state oil revenues disappeared from government coffers between 1997 and 2002, an amount roughly equal to the entire sum the government spent on social programs in the same period. New areas of Chevron exploration in countries like Cambodia are threatened with the same fate if the company does not adopt a payment disclosure policy.

“Cambodians have witnessed how the misuse of oil revenues tore apart countries like Angola and Nigeria. On the verge of oil boom in Cambodia, we urge the Cambodian government to prepare for the oil industry by committing to accountable, transparent policies and regulations for successful management of this sector,” said Solinn Lim, Regional Program Coordinator for Extractive Industries at Oxfam America in Phnom Penh, Cambodia. “We urge Chevron to publish what they pay for our natural resources, so that their corporate practice will help support an open and sustainable industry in Cambodia.”

As Chevron convenes their meeting of shareholders, the US Congress is also recognizing the importance of revenue transparency in the oil, gas, and mining industries. A bipartisan group of Senators introduced the Energy Security through Transparency Act, which would legally require all oil, gas, and mining companies registered with the US Securities and Exchange Commission (SEC) to disclose payments made to host governments. This includes European companies, such as Shell and BP, as well as many companies in emerging markets such as China, India and Brazil. The bill was introduced in September of 2009, and is expected to be considered for a vote in 2010.

“Congress has started to recognize the value of transparency in this sector, and we need industry leaders like Chevron to commit to a payment disclosure policy that would not only protect company investments and help stabilize energy prices for consumers, but also foster accountability in nations were secrecy has undermined development, democracy, and human rights for decades,” said Offenheiser.

“It is no secret that lack of transparency in the oil, gas, and mining industry often goes hand-in-hand with government corruption and violent conflict. Instability in these regions poses a long-term threat to national security, foreign policy, and economic interests of the United States,” said Raymond C. Offenheiser, president of Oxfam America. “We commend the Senators for encouraging US leadership to promote transparency where it is needed most.”

The “sense of Congress” in the Foreign Relations Authorization Act recommends requiring oil, gas, and mining companies to publicly disclose payments made to foreign governments; bilateral efforts to promote good governance in resource-rich countries through US missions and activities abroad; and encouraging foreign allies to establish similar policies. The legislation also recommends a US commitment to the Extractive Industry Transparency Initiative, an international voluntary initiative designed to increase transparency of payments by companies to governments.

“More transparency and stability in the oil, gas, and mining sector could help unlock billions of dollars in resource-rich countries that are home to more than half of the world’s poorest people. These policies would foster accountability in nations where secrecy has undermined development, democracy, and human rights for decades,” said Offenheiser.

These recommendations reflect requirements laid out in the proposed Energy Security through Transparency Act (S. 1700), which was introduced in September 2009 by a bipartisan group of Senators led by Senators Richard Lugar (R-IN) and Ben Cardin (D-MD). This bill would require all oil, gas, and mining companies registered with the US Securities and Exchange Commission to disclose payments. This includes European companies, such as Shell and BP, as well as companies in emerging markets like China, India, Brazil, and Russia.

“If passed, the information provided through The Energy Security Through Transparency Act would be a vital tool for citizens to hold their governments accountable for using oil, gas, and mining revenues to address community needs like education, health care, and jobs,” said Offenheiser.

“Passing the Energy Security through Transparency Act would demonstrate US leadership in the effort to weed out corruption in developing countries making way for stability and real solutions to poverty that the oil, gas, and mining industries can support.”