sharing in governance of extractive industries

Of Good Governance and Extractive Resources


International opinion no longer differ on the centrality of good governance to the attainment of sustainable development.  And has in recent times come to be the common donor requirement for the release of both bilateral and multilateral aid to Third World countries although defined diversely among different observers and actors concerned with development. Before going into details, it may be useful to attempt a brief conceptualization. The World Bank for example, defines governance in part as the manner in which power is expressed in the management of a country’s economic and social resources for development. The World Bank’s definition further emphasizes the concern with efficiency and capacity of state institutions to create a predictable and transparent framework for the conduct of public and private business as well as accountable economies and financial performance. 

In furtherance of the above argument and mirroring its significance as part of what it calls Partnership for Sustainable Global Growth, the International Monetary Fund (IMF, 1996: 5) also note that promoting good governance in all its aspects, including ensuring the rule of law, transparency, improving the efficiency and accountability of the public sector and tackling corruption as an essential element of a framework within which economics can prosper. 


Transparency refers to openness in the process of governance--, policy/decision making, implementation and evaluation--at all levels of government both central and local as well as in all branches  such  as the Executive, Legislative and Judiciary.  It is in these context that Oxfam and many civil societies have indicated that developing countries would have to go a little more further along the value chain of their extractive resources if they want to get out of “resource curse” by enlarging the range of resources covered by the Extractive Industry Transparency Initiative (EITI) process to other none—mineral extractive activities such as fisheries, forest and agri-business. 

Indeed, what would be the use of total transparency in the extractive area if non transparent practices favorable to the “politics of the belly” (Bayert, 1989)  and other dysfunctions remain in other sectors? Likewise, to expect to create a bifurcation in the political and economic trajectory of West African states requires enlarging the scope of transparency:  the purpose is simply to improve the management of public expenditure.  These were part of the experiences and outcomes captured in the Oxfam’s “Fresh Thinking- new impetus to mineral resources governance in West Africa” report after a week regional workshop in Ouagadougou.  It presents the lessons learnt from various civil societies working closely on mineral resource governance of the Sub-region in Burkina Faso with fifty participants from Africa, Europe, and the United States in attendance. 

Transparency should also be extended to the whole value chain of the extractive industry, including intermediate consumption and downstream activities. It should also be applied to communities and local actors through different channels as share of royalties, social mining funds managed by the state or otherwise, etc so as to avoid corruption and promote accountability processes at local levels.

The Oxfam report say due to the nature of political and economic systems operating in addition to several complimentary rents, these orientations are inevitable if developing countries intend to use transparency processes to support a deep change of systems of governance. 


The workshop also benefited from the diversity of participants’ that addressed various themes, including: issues relating to transparency rules as established in the extractive companies; countries of origin and applied in African States where they have operations; challenges facing the African Unions’ mining Protocol, in terms of advocacy favoring the rights of local communities and the new standards set by World Bank regarding impact of mining on environment and health.


Focused on “Mineral resources governance in West Africa”, its relevance on extractive issues on the agenda were developed from a regional perspective. Key pointers for analysis and drivers for action were identified across comparable countries. Managing minerals involves a wide range of stakeholders, including governments of host communities, powerful transnational companies, multinational credit institutions, local communities and the civil society, which plays a key role.  Minerals resources governance deals with rules and practices over the entire value chain: from defining access conditions –acts contracts through actual development and environmental and social management to the use of revenues. The report concludes that the management of monetary flows at local level also presents major challenges which calls for good governance to prevent conflict frequently starred up by injustices and inequalities associated with extractives activities.


Locally, similar sentiments were espoused in a recent workshop sponsored by GIZ/SECO for journalists in Koforidua by Madam Hannah Koranteng of WACAM who emphasized on the benefits of greater governance reportage, - transparency and accountability in the extractive sector geared towards inclusion and sustainability.  She submitted that good governance issues regarding rules and laws of how extractives industries are enforced in the host communities leaves much to be desired and very worrying.  She explained to the journalists how fiscal, land issues, rent and the environment all negatively affect the communities where these distractive activities are taken place.  Rent, royalties, are so low and needs to be reviewed and yet for so long a time it is not being done by policymakers who do not seem to know implications of such situations on the livelihood of the people.

Madam Koranteng explained that the number of gaps also found in environmental safe guards are too numerous and tend to be inimical to the progress of local communities and urged that the prompt and timely review and enforcement of rules, policies and processes by government officials for societal progress were very essential.

 She noted that the contribution of mining in particular to Gross Domestic Product was not significant enough as compared to what is taken away by companies involved and that calls for a review of the rules of engagement which must be enforced.

Responding, a legal consultant to the Ghana Chamber of Mines explained that various voices and participatory mechanisms as one held at the seminar was very important relating to ground rent. She said in furtherance of this the Chamber has set-up a forum that engages small scale miners to help deal with the problems.  She regrets that for more than five decades Ghana has still not enacted a Mining law to guide the industry and yet has policies that is governing the industry how sad. And this was fueling some of the effects that local communities are facing.  




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