Southern Africa Resource Barometer

By Claude Kabemba | January 13th, 2014
Southern Africa Resource Barometer

Globally, the scramble for access to, and development of, natural resources has intensified, partly due to rising demand from emerging economies. This trend has been reflected in commodity prices, which are at historic highs, and in terms of trade, which have altered in favour of commodities.

Africa in general and Southern Africa in particular are caught up in what some have termed the second ‘Scramble for Africa’. However, a historic opportunity has also opened up for Africa to effectively utilise its natural resources to fuel socio-economic development. This opportunity is enhanced by positive developments on the continent, including good governance gains, more space for policy debate, increased interest in exploring better platforms for development and heightened aspirations among the citizenry for a better future. This is, therefore, an opportune time to put in place instruments that will allow the region to benefit more from its resources – such as this Southern Africa Resource Barometer (SARB).

Sustainable natural resource use and management make novel demands on governance arrangements – the design of which requires normative guidance.  The use of barometers has expanded from the original scientific concept of a barometer that was used to measure atmospheric pressure. Today, barometers are used in many social research projects to measure economic planning, public attitudes and perceptions, ownership and accountability.

One notable measure, the Global Anti-Corruption Perception Index, was launched in 1995 and has put anti-corruption issues on the global agenda. It measures the perceptions of corruption, rather than the actual evidence of corruption, based on some accepted indicators. It has become a very useful tool to determine whether to invest in a country or not. It was followed by the Bribes Payers Index, which investigates how companies pay bribes to get things done. It measures both the demand and supply side of corruption, and is used by global firms to channel business. More recently, the Global Corruption Barometer was launched and is being used to measure the experience of corruption in a country.

SADC has also recently developed a Gender Protocol Barometer, which measures various commitments countries have made towards gender equity. Another tool, the African Media Barometer, was developed by the Media Institute of Southern Africa (MISA) to determine the environments in which media in the region are operating. The Afrobarometer, developed by the Institute for Democracy in Africa (IDASA), is used in researching political attitudes and behaviour across the region. A final instrument, the Private Equity Barometer, is used by companies to measure the strengths of financial markets in Europe.

Although governance principles have been developed for diverse contexts, their availability for sustainable natural resource governance is very limited. The resource barometer will be unique in the sense that it will measure, monitor and evaluate countries’ extractive industries’ performance along the entire value chain. These principles could also be used to direct the design of governance institutions that are legitimate, transparent, accountable, inclusive and fair and that also exhibit functional and structural integration, capacity and adaptability in the management of natural resources. 

Against this background, this SARB – which is the culmination of two years of consultation and validation by the Southern African Development Community-Parliamentary Forum (SADC-PF) in partnership with the Southern Africa Resource Watch (SARW) – will be an instrument that Parliaments, civil society groups, labour organisations, the media and communities can use to monitor how governments and companies are managing natural resources. It will increase transparency, accountability, respect for human rights and protection of the environment and promote real and sustainable development that will benefit all SADC citizens.

Most SADC member states are mining countries. Mining contributes between 40-90 percent of some countries’ national budgets. If properly managed, mining can contribute positively to poverty reduction in a variety of ways, mostly through generating income and creating opportunities for growth for lateral or downstream businesses.

The extraction of natural resources – namely oil, gas, timber or any other minerals – is also regulated by international legal provisions to protect human rights and the environment. The United Nations – through resolution 1803, which established the Principle for Permanent Sovereignty – recognises the existence of states’ sovereignty over their resources. While it affords states wide discretion to dispose of their resources as they see fit, it does prescribe the context within which states must act. It requires states to exercise this sovereignty in the interest of the people. It states that the ‘rights of the people and nations to permanent sovereignty over their natural wealth and resources must be exercised in the interest of their national development and of the well-being of the people of the State concerned’.[1] This is a permanent sovereignty doctrine, which can also be found in the Charter of Economic Rights and Duties of States, passed by the UN General Assembly in 1974 as a centrepiece of what came to be called the ‘New International Economic Order’.[2] Article 2 of the Charter reads:

  1. Every State has and shall freely exercise full permanent sovereignty, including possession, use and disposal, over all its wealth, natural resources and economic activities.
  2. Each State has the rights:
  • to regulate and exercise authority over foreign investment within its national jurisdiction and take measures to ensure that such activities comply with its laws and regulations and conformity with its national objectives and priorities; and
  • to regulate and supervise the activities of transnational corporations within its national jurisdiction and take measures to ensure that such activities comply with its laws, rules and regulations and conform with its economic and social policies.

 

It is clear that the General Assembly reinforces a state’s authority against unlawful exploitation of its resources. The International Covenant on Economic, Social, and Cultural Rights also stipulates that the misuse of a nation’s resources is a violation of human rights.[3]    

Citizens – who are the ultimate beneficiaries of natural resources in most African constitutions – are increasingly putting political elites in the region under pressure to tax resource rents transparently and distribute the revenue equitably based on the development goals shared by society. Ultimately, it is the quality of national legislative and policy processes, state institutions and individual political leadership that will determine whether sufficient revenue is raised from mining activities and whether potential wealth goes towards financing national development or lining the pockets of political and business elites.

The Resource Barometer principles are designed to assist key stakeholders, particularly parliaments in Southern Africa, to effectively discharge their oversight of the extractive industries with the aim of ensuring that minerals benefit all citizens. The principles are informed by SADC countries’ national legislations and regulations, international best practices and conventions, and inputs from practitioners. A wide range of civil society organisations, Members of Parliament, mining companies, human rights defenders and gender activists from across the region have contributed to the drafting of these principles. The principles have also benefited from the vast field experience of SADC civil society organisations that work in the extractive industries. 

The idea of a Barometer for Natural Resources emerged at a consultative meeting organised by SARW and the SADC-PF with Members of Parliament from six SADC countries – Angola, the Democratic Republic of Congo (DRC), Malawi, Swaziland, Zambia and Zimbabwe. The meeting took place on the 30th October 2010 in Johannesburg at the Birchwood Hotel on the Theme: Towards Enhancing Parliamentary Legislative and Oversight Role on the Extractive Industries Sector. The overall aim of the consultative meeting was to critically review extractive industries in Southern Africa in order to identify issues pertaining to raising parliamentary awareness and building capacity in providing effective oversight of the Extractive Sector.

Among other issues, the meeting dealt with contract negotiations, regional policy harmonization, revenue transparency, environmental protection, sustainable development and social empowerment through Corporate Social Responsibility. At the end of the meeting, the MPs recommended that best practices in resource governance be identified that could provide a sound basis for ensuring optimal benefit from the region’s finite natural resources. SARW was tasked with the responsibility of coming up with an instrument that would help enhance parliamentary oversight capacity in the quest for resource justice in Southern Africa. 

In March 2011, SARW assembled a group of experts to start reflecting on the nature and the form that the principles would take. The meeting came up with a recommendation for six country studies (Angola, DRC, Malawi, Namibia Zambia and Zimbabwe). These studies were summarised by a smaller team and integrated into one document, which was then submitted for discussion in Zambia during the Civil Society Social Forum in 2011. Over 100 people took part in the discussion. The document was refined and comments inserted. The document was then scrutinised again by representatives from civil society, companies and Parliaments from across SADC from 12-13 December 2011 in Johannesburg.

While these principles make reference to mining, they provide guidance on all types of extractive industries, regardless of their size and each country’s way of doing business. In addition, while the principles are not intended to be applied retroactively, they are expected to be applied to all extractive industry projects covering the expansion or upgrade of an existing facility where changes in scale or scope may create significant environmental and/or social impacts, or significantly change the nature or degree of an existing impact.

The proposed principles and guidelines are of a general nature. They are comprehensive since they refer to the entire value chain. They take cognisance of the fact that there is no such thing as ‘standard governance’ or a one-size-fits-all policy option leading to better development. Policy options and recommendations must be country specific and must be adapted to the local economic, social and cultural environments. In addition, while short and long-term impacts have to be considered, short to medium-term initiatives are of more relevance to the issues at stake.

Minerals represent potential wealth for the region’s economies, with a variety of benefits, including job creation, export earnings, knowledge and skill transfer, and industrialisation through forward and backward linkages to the rest of the economy and resource transformation. However, minerals have not produced the expected outcomes in SADC so far. Indeed, it is noteworthy that most SADC economies have posted lacklustre performances over the past two decades – with the exception of Botswana. The biggest problem in the region with regard to the management of its resources has not been commodity price fluctuations but the inability to effectively monitor the performance of the sector.

There is an urgent need to begin to put in place instruments that will allow for an easy and correct assessment of the manner in which resources are being managed in the region. The SARB is one such instrument and will be used by Parliaments and civil society to monitor and assess the performance of the extractive industries in the SADC region.

The statement following the Birchwood meeting made it clear that Southern Africa must urgently transform the ‘resource curse’ into a blessing for SADC citizens – and that the role of Parliaments in this endeavour is indispensable. Parliaments are particularly important because of their oversight role on budgets, their management of the legislative process, and their capacity to facilitate public engagement with civil society organisations and communities. This barometer will be critical as it will support the creation of knowledge-based Parliaments and influence regional thinking around, and interpretation of, trends in the extractive industries.

 


[1] Permanent Sovereignty over natural resources,  G. A. Res.1803 (XVII),art.1,17UN.GAOR Supp. (No.17) at 15,U.N.Doc.A/5217(1962)

[2] Ibid 

[3] International Covenant on Economic, Social and Cultural Rights, adopted and opened for signature, General Assembly Res.2200A (XXI), 16 December 1966, entry into force 3 January 1976.

 

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