sharing in governance of extractive industries
The STRADE project has revealed the contrasting ways in which the European Union’s raw material policies are presented within the EU and how these policies are received by developing partner countries. Read our Policy Brief from November 2016 here.
The African Continent has served as a source of raw materials for the EU over the last 15 years (see Figure 1). The EU has tried to formalize and strengthen this relationship through trade agreements, forming economic partnerships and enhancing diplomatic relations. (Read the STRADE policy brief on this here.) These engagements are designed to secure EU supply at fair and competitive prices to support the competitiveness of EU industry.
Interviews with respondents found that there is a disparity in the terminology used by the EU and its African partners. The EU talks of ‘engagements’ and ‘dialogues’ with resource-rich developing countries. However, respondents found the EU’s agenda tends to be set without consultation and the discussions are pre-framed. In addition, agendas appear to address concerns of the EU rather than developing countries. This has resulted in unmotivated partners feeling their concerns are not being given due consideration in bilateral meetings that may only take place bi-annually.
Africa-based respondents believed there was little coherence between EU policy regarding raw materials and Pan-African policy. For example, the EU’s Raw Materials Initiative (RMI), aimed at securing unrestricted access, largely conflicts with the African Union’s African Mining Vision (AMV). The latter is aimed at extracting maximum value out of raw materials before they are exported from the continent. Criticisms are made of EU trade policies, which push for a reduction in export restrictions and taxes. Third countries argue that complete free trade prevents them from adding value to their natural resources and utilizing revenue to fund social services. What may be seen as free and fair for the EU, might not be for the EU’s partners.
The EU needs to be conscious that its own challenges are not the same as its partners. It will need to find common ground and thus common solutions with its partners to ensure greater cooperation going forward. The risk the EU faces is that its current partners may choose alternative partners for development and natural resource extraction. This is exemplified by the plethora of Chinese companies operating in Sub-Saharan Africa, developing not only infrastructure projects, but also exploiting vast mineral deposits through mutually beneficial relationships with African governments.
The research also revealed that many EU initiatives have been well received by partners. Respondents believe that compensatory finance mechanisms, such as the EU’s SYSMIN project, were of value in times of crisis. Respondents were also positive about the effects of geological capacity-building projects focusing on increasing geological data of a country whilst simultaneously training national geological staff.
As the natural resource diplomacy space becomes more saturated with different partners and competing interests, it is important that the EU address the concerns of its current and potential partners. The STRADE project will, over the next two years, offer recommendations for an engagement strategy for the EU with resource third countries. For the time being, knowing what isn’t working is just as important as knowing what is.
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