IFI governance

Background

EIR + 10

Looking Ahead

23 April 2012 | Minutes

Organisers: World Bank, IFC, Bank Information Centre (BIC)

Ten years ago, the World Bank Group launched a review of its work with countries on extractive industries. The EI Review included commitments on governance, transparency, environmental and social risk mitigation, and community rights and benefits. What progress has been made? Where do we go from here?

Afternoon sessions:

Protecting the Rights of Affected Communities and Ensuring that Communities Benefit from EI Development

Panel:

Juan Carlos Jintiach, Coordinator of Indigenous Organizations of the Amazon Basin, Ecuador

Rodion Sulyandziga, Russian Association of Indigenous Peoples of the North, Russia

Patty Miller, Chief Environmental Specialist, IFC

Ambassador Alfonso Quinonez, Secretary for External Relations of the Organization of American States

Chris Anderson, Director of Communities for the Americas, Rio Tinto

Facilitator: David Hunter, Washington College of Law

David Hunter:

  • What is needed to deliver extractives industry benefits?
  • What are the responsibilities of the various stakeholders, who needs to do what?
  • What are the latest developments in thinking in this area, how is it changing, for example, in regards to rights based approaches?

Juan Carlos Jintiach, Ecuador:

  • We need to clarify who the stakeholders are, for example some groups are still uncontactable
  • Most Latin American constitutions recognise collective rights, but implementation is another thing
  • There’s the UN declaration on indigenous rights, Free Prior and Informed Consent (FPIC), traditional knowledge and rights, and the concept of autonomy
  • Bolivia recognise indigenous rights as a law, but there are still implementation issues
  • There is also the issue of the constitution vs. consent
  • The paradigm needs changing on how economics work in indigenous territories
  • Who reports when the rights of indigenous peoples are violated, when there are conflicts
  • Communities and traditional knowledge need to be respected
  • The rights of indigenous people are recognised in some constitutions, but not in all

Patty Miller, IFC:

  • IFC shares joint responsibility with government, private sector and civil society
  • The private sector is ina unique position to facilitate dialogue, but there can be abuses from other sources, e.g. governments
  • What does it mean for our roles? IFC recognises that business should respect human rights, each revised Performance Standard (PS) has elements with a human rights dimension. There are grievance mechanisms, and a requirement of consultation processes.
  • IFC guide and supervise company in terms of PS
  • Regarding latest thinking and development, there is a steep learning curve ahead, it’s evolving area – we’re still not seeing best practice, this will take some time
  • Water is one to keep an eye on in terms of the human right to water, which has received increasing recognition, and has increased impact on vulnerable groups. PS are trying to raise the bar – this is an increasingly evolving area to keep an eye on

Rodion Sulyandziga, Russia:

  • There are lots of internal challenges, e.g. political democracy developments
  • There are serious and complicated issue – involving national gov, businesses, civil society, local communities etc, with a growing gap between international and national systems and declarations
  • The national level is important, but the rule of law is not enforced
  • Increased tension in the arctic Siberia, including climate change and extraction of natural resources
  • No legal framework regulates the relation between business and indigenous peoples
  • Can try to bring international standards and norms to Russia
  • Not looking at extractives as good or bad, it’s an issue of local development and responsibility, balance between indigenous peoples rights to have their own development and agenda

Alfonso Quinonez, Organization of American States:

  • Need to look at the economics behind extractives, there is great interest from states and from companies
  • The investment climate is important, there is a need to offer something for companies due to the competition
  • There are benefits to the industry, government and for people, but not all is virtuous, many countries are failing to strike the balance with human rights violations, conflicts, etc
  • Incertain cases the rights of peoples are not respectd, mechanisms needed to ensure those situtations doesn’t happen
  • There is the business and human rights framework, to respect, protect and remedy
  • There are also the Interamerican court of human rights and the Interamerican commission of human rights
  • The remedy mechanisms are very important, and need to make larger efforts on the challenges with respect to human rights
  • How to achieve issues such as sustainable development, green economy and human rights
  • There is a need for some public policies and proper regulatory frameworks: strong and transparent institutions; adequate and strong enforcement; good balance between profits, taxes and royalties; and education and awareness (incl. active participation in the consultative process)
  • There is also a need for corporate social responsibility, but this also need mechanisms to follow up and to promote more sustainable mining

Chris Anderson, Rio Tinto:

  • Should acknowledge the traditional owners, this need to be recognised
  • Bank and IFC are too hard on themselves, tremendous progress has been made
  • Need to involve private sector and government more in discussions, it shouldn’t just be a discussions between Bank and CSOs
  • Much of the world’s resources still lie on land with indigenous peoples. If there is no support from local community, there is no business – need to work from the ground up
  • Engagement and vehicles for engagement, transparency and agreements are needed
  • Example of Newmont’s agreement with Ghana, it’s hard to come up with better example of FPIC, and lot of companies moving in that direction
  • Often local communities don’t see much of the resources, they go to the government and little trickle down or it comes late, but capacity building is important
  • Companies are not development experts, they need partnerships
  • Finance institutions, such as WB and IFC, are important too, not so much for cash, but need to work with them for example on Performance Standards
  • Important to manage what goes on regarding the revenue
  • Lot of expectations on extractive projects, but economic benefits are often very localised and can’t solve poverty in the whole country – economic development is the only thing that can solve poverty, not aid
  • The legacy of the extractives industry is a barrier, newcomers have a lot to answer too
  • Community disunity is another barrier, social science expertise is needed
  • Another barrier is capacity
  • Responsibility is needed, as well as open and transparent processes, including compromise
  • The human rights concept has experience a fascinating growth
  • Civil society is important as a watchdog but also as implementers

Q&A

Meg Taylor, CAO:

  • 60% of CAO cases use rights based language, including cases from community organisations
  • There are many concerns around consultation and lack of information disclosure
  • Performance Standard implementation on the ground is a key issue

Question from CSO representative, Mongolia:

  • Mongolia has had a mine since 2000 with lots of issues, speak on behalf of people 25% are nomads and are being impacted by mine
  • The mine is trying to confine people to smaller areas, these are indigenous peoples and the mining company deny them their rights
  • There is a conflict of interest, and the statements from Rio Tinto and others say there are no indigenous peoples. IFC is investing
  • Question regarding traditional rights

Question from Latin America:

  • Want to raise the issue of water, some parts of Latin America, such as the Pacific Coast area, is experiencing an increasing danger of polarisation – on the one hand there is mining of gold, silver and so on, on the other hand there is water, the symbol of life and health
  • This increasing polarisation between the two elements, is a scenario that need to be addressed, in part in relation to increased desertification
  • A new paradigm is needed, an inclusive situation where mining and human development can be united – we need more realistic dialogue on how we can go about

Patty Miller, IFC:

  • Performance Standard 7 on indigenous peoples defines who is and isn’t indigenous
  • In Africa only two indigenous groups are recognised, others are also indigenous in some ways but can’t recognise a whole continent of indigenous peoples – maybe this is why it’s not recognised in Mongolia

Chris Anderson, Rio Tinto:

  • I’m relatively new, so don’t know anything about this case in Mongolia, but shouldn’t make any difference if indigenous peoples or not, all should be treated like affected people

David Hunter:

  • Perhaps the issue is that the affected people concept is not broad enough

Chris Anderson, Rio Tinto:

  • Let’s hope there is a market based accountability, which means that if there is bad reputation then people don’t invest with them and they get no government licences

Question on IFC lending towards financial intermediaries (FIs) and non project lending, which goes in opposite direction to increased due diligence. Looking at the extractives review, the majority of resource intensive countries sees negative impacts. EITI represents a counter current, but seems that non project lending could make the situation worse.

Question regarding revenue sharing.

Rodion Sulyandziga, Russia:

  • In Russia there is no legal framework for revenue sharing, but increased agreements between business and indigenous peoples – this is the only way to improve this situation

Juan Carlos Jintiach, Ecuador:

  • In my area there are still no explorations, but the pressure is there
  • Our organisation is 28 years old and we have agreements with government, charities, other NGOs. We’ve developed an agenda for each indigenous group.
  • We also have recognition of wellbeing in the constitution
  • Participation must be full and effective, including discussion of benefit sharing
  • But we can do much better, we must use all instruments

Alfonso Quinonez, Organization of American States:

  • Economic and social rights now at the forefront, but still issue of who conducts the human rights violations – is it the state, the company?
  • There are efforts of OAS to strengthen the system, and these issues can be expected to come up

Patty Miller, IFC:

  • Regarding FIs lending, this represents a change and now represent up to 40% of the lending portfolio
  • The 2006 Performance Standards: four categories of projects
  • FIs has grown, which comes from a strategic decision to do more South-South lending, and smaller lending
  • IFC can only work at a larger scale, so work with banks to lend to smaller companies
  • This builds local economies and represents a very powerful story, realising development impact
  • Now there are six Performance Standards categories, including FI 1, 2 and 3, depending on risk
  • FI 3 deals with micro finance, etc
  • FI 2 is targeted at debt and equity risk facilities, insurance, etc
  • FI 1 is in regards to banks with significant exposure to project finance, etc. It only represents 8% of the 40% to FIs and needs to use the Performance Standards

Chris Anderson, Rio Tinto:

  • With reference to the development of human rights, this is still maturing, including John Ruggie’s work
  • More effort has been put into risk assessments, there is progress there

Meg Taylor, CAO

  • There is CAO initiated appraisal of FIs ongoing, we are at the final stages of writing and should be out at some time in the summer

Question from Oxfam: Performance Standards says that FPIC will only be provided at a single point in time, and that it may not be able to achieve FPIC in regards to land and resettlement.

In Kenya, in the Maasai community, there are lots of concerns around the exploitation from extractive industries, and the government is not very keen for them to benefit from extractives. Communities need to know their rights, they are loosing both their culture and land.

Chris Anderson, Rio Tinto:

  • Not sure why money and transparency should be at opposite sides – a company should ensure money goes to community.
  • This is not just about taxes and royalties, but also look at economic opportunities, employment, training and education benefits, effects on health impacts, etc

Alfonso Quinonez, Organization of American States:

  • Should promote more voluntary action, CSR by extractive industry
  • Participation, dialogue and consultation among stakeholders is crucial

Rodion Sulyandziga, Russia:

  • There is a need for new principles, there is a need for more time for common understanding and implementation. Cultural rights, e.g. minorities, are important

Patty Miller, IFC:

  • Don’t recall the sentences regarding FPIC, happy to talk further
  • There is a need for steps when things go wrong
  • Regarding land resettlement, could refer to that this is sometimes managed by a third party, e.g. the government

Juan Carlos Jintiach, Ecuador:

  • Human rights are not negotiable, FPIC important and self determination of autonomy

Opportunities and Challenges for Women in EI Development

Panel:

Ravi Rebbapragada, Samata Association for People, India

Djeralar Miankeol, Researcher and Agronomist, Chad

Adriana Eftimie, Mining Specialist/Gender Coordinator, Oil, Gas and Mining Division, World Bank

Lesley Bennett, Papua New Guinea Women in Mining and Petroleum Program PNG Chamber of Mines and Petroleum

Chair: Chris Neal, World Bank

Ravi Rebbapragada, India:

  • Work in Andhra Pradesh, mainly with indigenous peoples – tribal or adivasi, with special provisions in the constitution
  • Deals with anything from local issues, to national and international advocacy, based on tribal peoples concerns
  • There is an alliance on mining, minerals and people, dealing with the pre mining, mining and post mining stage. Also involved in a mines and communities project, based out of London

Lesley Bennett, Papua New Guinea:

  • Works for a women and mining and petroleum programme, for women to have a voice in the resource development in PNG, which is going through a mineral boom

Djeralar Miankeol, Chad:

  • Engage in rural area where he grew up, because he saw so many people side lined and has now done made studies there

Adriana Eftimie, WB:

  • Mining responsibility and gender coordinator

Chris Neal, World Bank:

  • Are there cultural constraints that prevent women from participation fully in the extractive industry space? Has any efforts been done to remove them?

Lesley Bennett, Papua New Guinea:

  • Women are not given equal opportunity, as men. Educating men is one of the ways to address this. Men in particular make decisions when it comes to allocation of resources
  • In some settings women will not speak in the presence of men, women need their own space to be able to talk freely

Ravi Rebbapragada, India:

  • It’s quite similar in India, culturally as a society doesn’t give much space for women
  • Most of India is agricultural based, indigenous people mainly live in forest areas
  • Women are generally against mining as it disempowers them, need to do a lot more in India before women can take part

Djeralar Miankeol, Chad:

  • Women suffer a great deal, the issue of gender has been put on the backburner – the women are the last ones to speak, eat, go to bed
  • Men make the decisions – the women stay at home and wait, then manage the implementation of the result but have no part in making it
  • Under the dictatorship, men and women used to make only half their salaries and women had to manage the resources
  • So the women manage the revenue, but what do the mining industry mean for the women in Chad? Advanced technology is used, which need high level of management expertise to work in this sector – but women manage the basics, to bring food to the family – when mining companies come to the region they take the land away from the farmers
  • Women manage the revenues no matter how low they are, they have to bring wood for heating, fetch vegetables, but on the land the mining companies have started working, burning goods, digging wells and so on
  • And how do the companies work with the population, they come and speak English as under colonialism, but the women don’t even speak French – and now they have to speak English to be able to communicate

Adriana Eftimie, WB:

  • In the countries we already are involved in and run gender programmes, we have seen that cultural barriers for women to take part in decision making and consultations were there
  • We’ve also noticed many other types cultural thinking we have noticed, e.g. where women not allowed to go underground
  • There are economic barriers too, because women have an equal opportunity to participate in the extractives, but not allowed to do so, so they don’t get the benefits of participation which triggers one barrier after the other

Comment from Niger delta: this is similar to what we have there. We don’t need to make space for women, it’s there, but we need to take it. Women are the managers, who take charge at the family level, that power needs to be utilised and CSOs can help. In the Niger delta women had an 11 days siege and shut theplace down, but they had little experience so the MoU agreed as a result of this had lot of holes. We promote non-violent action. Gender issues shouldn’t be at the backburner, need to be put at the fore.

Lesley Bennett, Papua New Guinea:

  • We have a project helping women in PNG to achieve that. Women want to participate, but acknowledge their shortcomings, e.g. literacy barriers
  • We were contacted by Exxon Mobile to do training around this, focusing on economic empowerment, but villagers saw other more urgent priorities that they wanted to see addressed, such as domestic violence, alcohol abuse, prostitution and other social problems that are coming on as a result as these major developments. We raised these issues with Exxon Mobile re these issues, and now they are integrating them into the economic empowerment training

Comment from Chris Anderson, Rio Tinto: An example from some years ago regarding a social engineering project, there were only men there, local leaders and politicians who said they would communicate with people when they returned home. Later on we worked with women leaders, did regular tours to the mines and so on and the men complained that the company was being culturally insensitive by focusing on women – shows a need to balance being culturally appropriate

Adriana Eftimie, WB:

  • We try to bring together all the stakeholders.
  • Women carry out community programmes, not women’s programmes, that everybody will benefit from. Companies are open to this, including hiring of gender experts
  • It’s important to create a platform for women to give them voice, to give them the opportunity to talk about the impacts

Djeralar Miankeol, Chad:

  • Of course it’s a cultural problem, sometimes there is an attempt to keep women within the household
  • The daily living in the villages impacts, sometimes women have to work far to bring the water back, eg 4-5 hours a day, plus 5-6 children to look after plus the husband
  • Must provide services to the villages in order to alleviate the burden of women to allow them to participate

Ravi Rebbapragada, India:

  • Tribal areas don’t want mining
  • Agree gender concerns are important to address, but with mining and extractives coming in, mainly the youth and men want it, but women are against it as it means that the youth and men will leave

Chris Neal, World Bank:

  • Someone said all the gas, oil etc in the world will eventually come out as people want it so desperately – how do we ensure women are part of this, not disempowered, if this is the reality?

Djeralar Miankeol, Chad:

  • We’ve had some experience so far, showing that women are almost never consulted – women come in the last instance
  • Need to start by consulting women, as they are organising and managing revenue, and are pillar of the family – and then move upwards
  • Now we start the consultation with the government but we need a different approach, starting with the local population with women being the first ones to be consulted on the project

Lesley Bennett, Papua New Guinea:

  • All mining and petroleum projects are in very remote areas
  • Prior to the development takes place people were living on subsistence level, lacking education, health facilities, there was a lack of government presence
  • In PNG women are not against mining as they see the benefits the development will bring, but they don’t have the opportunity to participate
  • We try to address thiswith capacity building, eg education, health training etc
  • Stakeholders need to work in more coordinated fashion. Without proper coordination we will still continue to have these problems
  • In resource areas, the local government doesn’t have the capacity to function effectively

Comment: if all the resources to be extracted, what would the benefits be for women? Public goods to be laid out for the use of everybody. For example in Botswana a road contractor preferred to employ women, since the men drank, didn’t work hard etc – this resulted in some of the best highways in the region. With some capacity building women would be more effective than men. Employ women, give them the opportunity.

Adriana Eftimie, WB:

  • We have tried a strategy to employ more women, the reasons were the same – no drinking, take care of equipment, came on time
  • Women can be drivers of change, they can change thinking

Comment from Mongolia CSO representative:

Most women in Mongolia are educated and able to take jobs, but mainly get employed as cleaning crew, there is no proactive development of women to get more gender balance in the projects. There are also sexual harassment issues, men would not let their women work there. Rio Tinto has led to a huge influx of men into the society, with sexual harassment and crime issues that needs to be addressed. Regarding consulting with women, they don’t get consulted despite that 66% of college students are girls, they still don’t get to decision making. Would like to see this issue addressed more, opportunities for gender based activities in the community and work place.

Adriana Eftimie, WB:

  • I think there is a law in Mongolia that women aren’t allowed to work in mining

Response that this probably refers to an old ILO condition dating to the 1960s.

Chris Neal, World Bank:

  • What should the industry/CSOs do to create more space for women?

Lesley Bennett, Papua New Guinea:

  • Some companies have zero tolerance on domestic violence and this acts as a deterrent – women should be able to work free of sexual harassment

Ravi Rebbapragada, India:

  • In India we don’t want mining, so can’t respond to the question – men want it since there is money in it
  • Two important legislations, since 1996 village councils 50% need to be women, since 2006 forestry act this need to be in both husband and wife’s name
  • EIA and the 1996 Bhopal drama, this was not looking at social impacts, so no chance of looking at impacts on women
  • Gender equity need to be from the included from the planning stage, including consultation
  • First there must be provision of services to the people, then they can get into other aspects away from hand to mouth existence – then we can address the issues

Djeralar Miankeol, Chad:

  • There is no need to dwell upon the quality of the work of women
  • Social constraints and living conditions for women are hard. We talked about the role of governments, but there is more. How can we improve communication between men and women, we need to talk in their language. There is no media in rural areas – how can we give information to women so that they can act upon it
  • Government is responsible whether we like it or not. Has to create space so that the communities can participate.
  • In Chad, when women can’t go to a clinic, have no access to water, if government is the not there to create favourable conditions, the good will of the WB or companies will not do much
  • In terms of specific actions, what is civil society, what resources does it have – it needs to have capacity to fully play its role
  • WB could reinforce local capacity for greater accountability for the government

Adriana Eftimie, WB:

  • There is a lot of awareness raising on the extractive industries, eg regional workshops on gender, toolkits and guidance notes, and work with the governments to ensure gender aspects are reflected
  • PNG women ensured they got a share of the revenues – women had an action plan, while the men came with a wish list, so the women got listened to

Closing remarks

Paulo de Sa, Manager, Oil, Gas and Mining Policy Division, WB

  • Extractive industries is at the top of the agenda everywhere, there is a boom in extractives, but there are questions regarding the benefits, around fair distribution, community participation, etc
  • Transparency is an entry point but not the end, good governance is also important
  • There are questions regarding how the money is spent, which is the next focus of EITI
  • Much progress has been achieved in regards to macroeconomic management and adoption of more prudent macroeconomic policies
  • Countries and communities are getting better deals than they used to do, but corruption is still a serious issue
  • There is a question in regards to fragile states, when can the WB engage on extractives?
  • Governments, in particular the local governments, are often not doing what they should do
  • FPIC is still being discussed, still don’t know how to do consultations
  • Land use and water use rights are big issues and CSOs should ask for more WB involvement in this, more than the IFC
  • WB safeguards are thin on social issues, but WB has a role to play, so count on CSOs to raise the awareness with our senior management on these issues
  • Revenue sharing is still far behind, there aren’t many good examples and a lack of transparency

Chad Dobson, BIC

  • WB roles: ability to convene, conduct research and set standards, with a new chance with the safeguards review
  • Has moved forward on gender, eg the World Development Report, but could do more on gender in extractives