More and more, poor people are asserting their right to decide if or how they want oil, gas, and mining development to take place in their community—and their right to know about the impacts and benefits of these projects.
]]>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)
]]>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.
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The International Labour Organization (ILO) is calling on President Álvaro Colom to suspend operations at the Marlin Mine in the western highlands. The ILO’s Commission of Experts told the government that it should “suspend exploitation” until it can provide information for a review under way concerning the social, spiritual, cultural, and environmental impact of the Marlin mine on local Maya people. (See the Report of the Committee of Experts on the Application of Conventions and Recommendations, pp. 769-770.)
The same report (p. 781) urged the government of Peru to suspend mining exploration and operations affecting indigenous people until “until such time as the participation and consultation of the peoples concerned is ensured through their representative institutions in a climate of full respect and trust.”
The review is part of the government’s responsibility under the ILO’s Convention Concerning Indigenous and Tribal People in Independent Countries (known as ILO Convention 169).
In addition, the UN’s Committee on Elimination of Racial Discrimination (CERD), in its 76th session in Geneva urged the government of Guatemala to take action to support the human rights of indigenous people affected by mining: “It was recommended that Guatemala put in place adequate mechanisms, in conformity with the United Nations Declaration on the Rights of Indigenous Peoples and International Labour Organization Convention No. 169, to ensure effective consultation with communities that could be affected regarding projects for the exploitation and development of their natural resources, with the objective of obtaining their prior informed consent.”
These statements reaffirm the importance of free, prior and informed consent (FPIC) of the indigenous people of Guatemala. Local communities--especially indigenous communities--have to be informed in a timely manner about development projects and should have the opportunity to approve (or reject) a project before it starts.
Oxfam America works with national organizations to inform communities about the possible effects of mining projects in their communities and their rights to FPIC. “The reports and the recommendations of ILO and CERD reconfirm the importance and the validity of the demands of the indigenous people in Guatemala affected by mining, and the importance of consulting with these communities,” affirms Andrés McKinley, program officer for Oxfam America in Central America. “In the absence of these fundamental rights, mining in Guatemala will continue to threaten peace and sustainable development in the country.”
]]>In a letter to Chevron shareholders, Oxfam is urging investors to support a shareholder proposal on fiscal transparency calling on the company to disclose annually all taxes, royalties, fees, bonuses, and other payments to specific national governments.
Chevron paid more than $40 billion in taxes to governments around the world in 2008. Knowing how much money Chevron pays to the governments of Nigeria, Chad, Angola, Myanmar, and other countries rich in oil and struggling in poverty can make a significant difference for citizens pushing for government accountability.Chevron is a participant in the Extractive Industry Transparency Initiative (EITI), which is promoting disclosure of resource revenues paid to governments, and has stated in its 2008 corporate responsibility report that it supports the mission of the EITI:“Chevron believes that disclosure of revenues received by governments and payments made by extractive industries to governments could lead to improved governance in resource-rich countries. The transparent and accurate accounting of these funds contributes to stable, long-term investment climates, economic growth and the well-being of communities.”
Unfortunately, the voluntary EITI initiative works only where governments have the political will to implement the program. In many Chevron countries of operation the host government has either not signed up to EITI or not fully implemented it. Only 2 out of 22 countries facing a March 2010 deadline to have their implementation of EITI independently verified met the deadline.
Chevron has an additional opportunity to take a leadership role in advocating for resource revenue transparency as the US Congress debates the proposed Energy Security through Transparency Act of 2009. This law, if enacted in its proposed form, would require all oil companies like Chevron that are registered with the Securities and Exchange Commission to disclose payments to governments. The law would ensure more disclosure in resource-rich countries, whether or not the government is participating in the voluntary approach.
The Oxfam shareholder proposal concludes: “Chevron should practice the highest possible degree of disclosure of payments from the company to host governments to maintain its industry leadership position on this critical issue and to ensure that its investments contribute to increased economic development and political stability.”
Oxfam hopes for strong support for the proposal at the annual Chevron shareholders meeting on May 26th.
]]>But a hungry child exists in a larger context: if we nourish communities, they can nourish their own children.
The woman on our cover, Fatou Doumbia, and other women in her village in Mali, pooled their resources last year. They set aside nearly a ton of millet as a defense against the hunger they’d seen as food prices spiked. Hers is another face of hunger: determined, resourceful.
After the last harvest, Oxfam reached out to supporters to respond to the food crisis. We’ve devoted much of this issue to looking at what communities have done to avoid the kinds of hardships they confronted. When people living in poverty are hit by a food crisis or natural disaster, they lack resources to tide them over.
Oxfam works to help people build their resilience. Let respect and hope fuel your efforts to support women like Doumbia.
]]>De Echave's remarks came during a conference held by Oxfam America and the Revenue Watch Institute in Washington, DC titled "From Conflict to Consensus: Extractive Industry Transparency in Latin America." The conference included speakers from citizen organizations in Bolivia, Ecuador, Mexico, and Peru, as well as the Peruvian Ambassador to the US Luis Valdivieso and Anwar Ravat, the World Bank’s manager of the Extractive Industry Transparency Initiative.
Patricia Diaz, Oxfam America's program officer in South America following the hydrocarbon industry, says conflicts erupt in Peru and other countries as “communities express frustration with what they perceive to be significant social and environmental costs associated with extractive industries, and only limited social benefits. These conflicts not only destabilize Peru but create a difficult operating environment for American and other companies.” She also said that conflicts flare up when mines and pipelines are set up without the free, prior, and informed consent of local people.
Oxfam America and Revenue Watch Institute are advocating for governments and companies to disclose payments made for oil, gas, and mining projects as a means to build trust and reduce conflicts. Citizens would be able to see how much money their government receives from companies, and if they are getting a fair share of revenue devoted to their communities. Diaz says this information would help avoid conflicts such as the one seen in the Tacna and Moquegua regions of Peru last year, when the government altered mining royalty payments, setting off protests by 20,000 people resulting in three deaths. “More information on the mining revenues that each region would be receiving could have helped to avert this conflict,” she said.
A few days after the Washington event, and after months of pressure from Oxfam America and others, the Inter-American Development Bank formally endorsed EITI. In the U.S. Congress, Diaz and others also held a briefing to urge action on proposed legislation to require extractive industry revenue disclosure. If enacted, the law would require companies subject to US Securities and Exchange Commission rules to disclose payments to governments. “Civil society in Peru would have a key tool for ensuring that these payments ultimately benefit the local communities most affected by mining and hydrocarbon projects,” Diaz said in Washington. “And US companies and consumers would benefit through better operating environments and steady access to the raw materials you depend on.”
Download all the presentations delivered at the conference here.
]]>"President Obama's historic visit to Ghana, so early in his presidency and on the heels of important commitments at the G8 in Italy, signals the importance of African development to US interests," said Raymond Offenheiser, President of Oxfam America. "President Obama gets it. He understands that without a strong civil society, and capable, transparent governance, efforts to fight poverty and bring about social justice in Africa will at best be incremental. Good governance and sustainable use of resources will inspire more effective international assistance and increase trade."
President Obama had several recommendations that will help Africa on the road to prosperity. Here are a few of the highlights from the speech:
"In the 21st century, capable, reliable, and transparent institutions are the key to success—strong parliaments; honest police forces; independent judges; an independent press; a vibrant private sector; a civil society. Those are the things that give life to democracy, because that is what matters in people's everyday lives." These are all important parts of a thriving democracy, and President Obama made clear in his speech that these should be a priority in Africa just as they should be on every other continent. Building strong institutions that protect the rights of citizens, and allow business and entrepreneurs to flourish, will encourage investment in Africa. Oxfam is focused on helping civil society organizations work to hold their governments accountable. Examples include our partnerships with groups promoting new laws that accord equal rights to women and girls in southern Africa, and a region-wide proposal for uniform laws governing the mining industry in West Africa.
"So in Ghana, for instance, oil brings great opportunities, and you have been very responsible in preparing for new revenue. But as so many Ghanaians know, oil cannot simply become the new cocoa... Dependence on commodities—or a single export—has a tendency to concentrate wealth in the hands of the few, and leaves people too vulnerable to downturns." Resources like gold, diamonds, and oil can bring enormous wealth and potential for development. The road to prosperity will require leaders to avoid the path of poor management, corruption, violence and war. Ghana is a promising example of what is possible: Since Ghana discovered oil near its coast, the country's President John Atta Mills pledged earlier this year to disclose all petroleum agreements, so citizens can track what money comes to the government and how revenues are spent. This pledge has not yet been turned into reality. Real transparency needs to be built into a new legislative framework for how Ghana's new oil wealth will be managed, to ensure revenues are spent on social services and poverty reduction. Oxfam is working with the US Congress on legislation to require all US and foreign companies subject to Securities and Exchange Commission rules to disclose payments to developing country governments. This will be a critically important tool for citizens working to avoid corruption and waste of natural resource revenues.
President Obama also highlighted steps that the US would take to help combat corruption, including addressing corruption in the annual State Department human rights report, a recommendation that was made by Oxfam America in its Presidential transition memos.
"Aid is not an end in itself. The purpose of foreign assistance must be creating the conditions where it's no longer needed." The United States needs to make a number of key reforms to make our foreign aid system as effective as possible in reducing poverty and creating prosperous communities throughout the developing world. The US lacks a coherent strategy for global development. Oxfam is calling on the US to keep recipient country governments and their public informed on the nature and amount of American aid, and let each recipient country lead its own development agenda. President Obama's focus on using aid to defeat poverty is on the right track—one that we hope will lead to a new strategy for global development and a reinvigorated, effective aid system that will also rebuild US leadership in the world.
"A warming planet will spread disease, shrink water resources, and deplete crops, creating conditions that produce more famine and more conflict." Climate change is already affecting the lives and livelihoods of millions of poor people in Africa, as a recent Oxfam report detailed. Tackling these impacts is essential to addressing food security and broader development objectives. President Obama must commit to help bring about a comprehensive global climate strategy that will help poor communities cope with failed crops, dwindling reserves of clean water, and displacement caused by extreme weather events. The US and other wealthier countries must curb their greenhouse gas emissions to prevent climate chaos and provide adequate financial assistance to help African countries adapt in greener and more sustainable ways.
"Now, America can also do more to promote trade and investment." The economic welfare of Americans is inextricably linked with the well-being of people across the globe. While our foreign policy seeks to address the problems of poverty, disease and lack of economic opportunity, our trade policy has often exacerbated them, by demanding greater access to export markets in the poor countries, more favorable rules for US investors that can lead to greater poverty and inequality, and limiting access to affordable medicines. President Obama must develop a new trade policy with economic development as a core objective, spreading the benefits of trade as widely as possible, in the developing world as well as in the United States. This must include focusing efforts on the multilateral trading system to achieve a successful conclusion of the Doha Development Round, while working with Congress to pass legislation providing for duty-free and quota-free market access for all Least Developed Countries (LDCs).
]]>"Much like the Cairo speech, we are hoping the Accra speech will signal a new era of engagement, respect and partnership with Africa," said Raymond C. Offenheiser, President of Oxfam America. "This historic visit, so early in his presidency and on the heels of important commitments at the G8 in Italy, signals the importance President Obama places on African development."
Millions of Africans live in extreme poverty, and are now hit hard by the global economic and climate crisis. Sub-Saharan Africa alone is expecting losses of up to $245 billion this year as a result of the global slump, which is almost seven times the amount it receives in global aid. In Ghana, a resource-rich country, the life expectancy is a mere 58 years and 70% of people in the poor northern regions live on less than $1 a day. Despite the economic crisis, Africa continues to attract large investments to extract the riches that lie below ground, producing billions in government revenues. By 2015, oil revenues in African oil-exporting countries will exceed the amount needed to meet key social development goals by $35 billion annually—but investing this money wisely is not a sure thing.
"Africa is rich in natural resources like gold, diamonds and oil, but, too often, these resources have contributed to corruption, conflict, and human rights abuses," said Offenheiser. "But important progress can be made to turn this around. President Obama can help by supporting increased transparency and the disclosure of payments from US and other companies to African governments to help ensure responsible use of billions of dollars of government revenues per year."
Oxfam praised Ghana's recent commitment to transparency in the country's nascent oil sector and urged President Obama to encourage the government to follow through on these commitments and encourage other African governments to follow the positive steps the Ghanaian government has taken to date.
Oxfam also noted that key reforms are needed to make the US foreign aid system as effective as possible in reducing poverty and creating prosperous communities throughout the developing world. The US currently lacks a coherent assistance strategy for many of the countries it is trying to help. Oxfam is calling on the US to keep recipient country governments and their public informed on the nature and amount of American aid, help the recipient country to manage its own development, and ultimately, let each recipient country lead its own development agenda.
"American generosity is undermined by a reactive approach that prioritizes relief efforts—like food aid—that saves lives, but doesn't address underlying causes of poverty and hunger," said Offenheiser. "If the US wants to use its aid consistently help the poor in countries such as Ghana, it needs a global development strategy to guide the US government's efforts to fight poverty."
Climate change is already impacting the lives and livelihoods of millions of poor people in Africa, as a recent Oxfam report details. Tackling these impacts is essential to addressing food security and broader development objectives. President Obama must commit to help bring about a comprehensive global climate strategy that will help poor communities cope with the impacts of global warming, from failed crops to dwindling reserves of clean water and displacement caused by extreme weather events.
"Global hunger and poverty is a human tragedy exacerbated by faltering investments in agricultural production and the growing impacts of climate change," said Offenheiser. "We are pleased to see President Obama follow through on his commitments to reassert US leadership and address the challenges facing the billion people around the world without enough food."
]]>Newmont, the largest US-based mining company, agreed to the review in 2007 following allegations of serious rights abuses by police and private security forces hired to protect the mine. Among other recommendations, the review calls on the company to more rigorously investigate human rights abuses, disclose contracts with police forces, consider severing ties with a private security contractor, and promote greater dialogue with local communities.
"This report contains a number of important recommendations for addressing ongoing human rights problems at Yanacocha," said Raymond C. Offenheiser, president of Oxfam America. "Given the current tensions around mining projects in Peru, we urge Newmont to take immediate action to implement these recommendations."
The report is the result of a two-year mediation process between Newmont and Oxfam America under the auspices of the Voluntary Principles on Security and Human Rights, a global initiative bringing together mining and oil companies, governments, and nongovernmental groups. Newmont and Oxfam entered the mediation after Oxfam filed a complaint over abuses by security forces at Yanacocha in three separate incidents throughout 2006-2007. These included the fatal shooting of a local farmer involved in protests at the mine and the surveillance and harassment of members of a local human rights and environmental group.
Peru has been hit by a recent wave of protests around mining and oil projects. According to government estimates, there are more than 70 active conflicts at mine sites in various parts of the country, some of which have turned violent. Tensions reached a boiling point in early June when actions by the national police to quell protests by indigenous peoples in the Peruvian Amazon, who were protesting government decrees designed to open up more land to mining and oil operations, resulted in a tragic loss of lives and a large number of wounded police officers and indigenous peoples.
"Newmont can help reduce the level conflict in Peru by implementing these recommendations," said Keith Slack, extractive industries program manager at Oxfam America. "Doing so would be an important confidence building measure among local community members affected by mining operations."
The report recommends that Newmont more vigorously implement the Voluntary Principles on Security and Human Rights, which include ensuring that security forces employed by companies do not have a history of human rights abuse. The report further calls on the company to review the results of psychological examinations of all security personnel before employing them at the mine.
"This is a critical first test of the complaints mechanism of the voluntary principles," noted Slack. "Newmont's compliance with these recommendations is important for the continued credibility of the initiative."
This report follows a previous independent review of Newmont's community relationship management practices, the results of which were released in March. Oxfam encourages Newmont to continue taking leadership in this type of review process and to fully implement the resulting recommendations to improve relationships with local communities near mining projects.
]]>"The discovery of oil, gas, and minerals and the revenues gained from them could have a potential to lift Cambodians out of poverty," said Mam Sambath, Chairperson of CRRT. "However, for this to happen, important steps need to be taken to ensure that revenue management is done in an accountable way and that the benefits gained are invested into basic social services such as health care and education."
Solinn Lim, a program coordinator for Oxfam America’s East Asia program in Cambodia, spoke at an event held by the CRRT on June 12th in Phnom Penh to launch the new coalition. She said that Cambodia is poised to earn much-needed capital that can be used to drive a new phase of economic growth for the country. "This can only be done with a strong and meaningful engagement between government, companies, and civil society," she said.
Cambodia has recently discovered offshore oil and has mineral deposits in its northern provinces. If effectively exploited, these resources could drastically increase the country's $2 billion national budget. How these additional funds are expended, and the ways the country can safeguard their effective use, is a primary motivating factor for the establishment of the CRRT and its mandate to promote active citizen participation in decisions about use of resource revenues. At the same time, Cambodia’s legal and regulatory framework, both for mining, as well as for oil and gas industries, need to be created. This will help Cambodia to "manage these industries from extraction to revenue collection to spending," said Lim from Oxfam.
Oxfam is making grants to individual members of the CRRT coalition and encouraging other donors to help support the coalition.
The five founding members of the CRRT are Centre for Social Development, Development and partnership in Action, Economic Institute of Cambodia, NGO Forum on Cambodia, and Youth Resource Development Program. The coalition is being funded by Oxfam America, Norwegian People’s Aid, Heinrich Böll Foundation, and Trocaire.
]]>At least 30 people have been killed in recent weeks in violent confrontations between indigenous protestors and police. The overturn of these decrees now sets the stage for dialogue. Shortly after congress rescinded them, President Alan Garcia delivered a speech in which he said that his government should have included indigenous people in discussions about the decrees before he issued them.
The government of Peru is now initiating a commission to start a dialogue with indigenous people, and will include Oxfam's partner AIDESEP, which represents a highly diverse group of indigenous organizations from all over the Amazon region.
"Oxfam hopes this dialogue initiative will be an important first step toward lasting solutions based on indigenous peoples rights and ensuring strong environmental regulation of extractive activities in the Amazon," said Frank Boeren, Oxfam America's Deputy Director in South America.
]]>West African countries produce millions of ounces of gold each year, but the region is one of the poorest in the world. Provisions set forth in a directive issued by the Economic Community of West Africa States (ECOWAS) create a basis for helping communities ensure that mining revenues will be used in ways that will reduce poverty, and that they enjoy some of the benefits of wealth produced by mining—instead of simply enduring the costs in terms of pollution, and loss of farm lands. Uniform standards across the region will help prevent destructive competition for foreign investment that force governments to relax environmental and financial standards.
Richard Ellimah, from Obuasi, Ghana, says the new mining directive is "probably the most audacious attempt by the sub regional body to address concerns of mining-affected communities... We are looking forward to using the directive to demand respect for human rights, and freedom of information."
Campaign activities during the week of action will take place in Ghana, Burkina Faso, Senegal, Nigeria, and Mali, and will include debates and information workshops to teach people in communities affected by mining about the principles in the ECOWAS mining directive. Top among those principles is free, prior, and informed consent, which will give people the right to say whether—and under what terms—mining can be carried out in their community. Civil society organizations will reach out to the press, holding information workshops for the media and interested environmental and social organizations. Organizations also plan to contact their legislatures and mining ministries to ask them to change their regulations to comply with the ECOWAS directive on mining.
Six allied organizations held a press conference following the workshop and released a statement calling on the government to revoke permits it granted Newmont Mining of Denver to explore for gold in the Ajenua Bepo Forest Reserve. "When government revokes the Environmental Permit to mine in Ajenua Bepo Forest Reserve it would demonstrate its preparedness to define forest reserves as 'No Go Zones' for mining," the statement says.
"This campaign is the next phase of the movement towards an increased citizens' participation in public policy making and better governance and regulation in the mining sector in West Africa," says Ibrahima Aidara, Oxfam America's lead expert on extractive industries in West Africa.
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