This guest post is the first in a two part series from Nikki Reisch, a second year law student at New York University School of Law, who recently completed a legal internship in ERI’s Washington DC office. Part two is “Taking Stock of Extractive Industry Transparency Trends.”
Have you ever wondered why there’s so much fuss about transparency in the oil, gas and mining sectors, and why a human rights and environmental organization like ERI cares about the money that flows from extractive industries? As we applaud the significant strides accomplished by transparency advocates this year, it’s useful to recall why opening the books is so important, and why disclosure alone will never be enough to prevent the abuses, conflict, and inequalities that are frequently associated with oil, gas and mineral extraction.
Around the world, the extraction of oil, gas and minerals is a lucrative and often deadly business. As ERI has documented in many countries such as Burma, Nigeria, Peru, and Ecuador, these industries can take a severe toll on communities and the environment. One of the primary ways that extractive industries contribute to human rights abuses in some countries is by providing a source of income to oppressive governments. The cash not only helps keep those regimes in power, all too often enriching elites while communities remain poor, it also frequently pays for weapons that are turned against local peoples defending their rights and their way of life. These trends are perpetuated by the secrecy that cloaks oil, gas and mining operations; local populations may not know that an extractive project is going to take place in their community, let alone have an opportunity to decide whether and how they want the project to proceed or have access to information about how much revenue the project generates and how it is used.
Transparency has never been an objective in and of itself, but it is an essential building block in the struggle for accountability. Communities have a right to know when extractive projects are taking place, how much money they are generating and where it is going. Making extractive industry deals and profits more transparent will help strengthen civil society efforts to hold their governments accountable for the use of the country’s resources. Exposing how much a given company is contributing to a brutal regime, like the military dictatorship in Burma, can increase the reputational cost of doing business there and ultimately make it more difficult for the government to misuse those funds.
However, as important as it is to shed light on the deals in these industries, sunshine alone will not guarantee protection of the environment and human rights. ERI recognizes that publishing the contracts and payments associated with oil, mining and gas investments may deter corruption, but without strengthening civil society to make use of the information, protecting the right to participate in development decisions, and promoting alternative sources of income, transparency alone won’t end the abuses perpetrated in order to make way for extractive projects or those caused by the adverse impacts of extraction itself. At base, these are high-stakes, dirty industries – pitting powerful economic interests against often the most vulnerable communities.
Part two in this series will be posted later this week.