Politics of Extractive Industries

The power, interests, incentives and political systemic dynamics underlying governance in the extractive industries have not been paid enough systematic attention. We must understand and address how political realities impact the issues we care about, and how we can respond to these more effectively.

 

Programs and initiatives intended to improve governance of the highly fraught extractive industries have made significant progress. For example, a wide range of good practices has been defined across the value chain; much has been done to build the capacity of key actors; and major strides have been made to bring greater transparency to corporate and government practices within this historically opaque sector.

Translating this progress into meaningful impact on governance and development outcomes has been more difficult. We argue that systematically understanding and addressing the role of political contexts – that is the power and interest relations and dynamics that shape institutions of governance and policy-making – is crucial to achieve better outcomes from governance efforts in the extractives sector. Our work on politics and the extractive industries provides a foundation to do just that through analysis and practical insights focused on key areas of practice in the field.

NEW: PLUS Politics briefs

Our new series of policy briefs aims to encourage practitioners to apply a more systematic political lens to their work on governance in the extractive industries.

Each brief deals with a key governance issue, analyses political challenges and provides recommendations to address them.


OUR AREAS OF FOCUS

The politics of Free, Prior and Informed Consent

The politics of transparency and accountability

Operating in politically hostile settings
Politically informed approaches to anti-corruption

The politics of environmental impact assessments 

Empowering and incentivizing reformers


The politics of Free, Prior and Informed Consent

Indigenous and tribal peoples’ right to free, prior and informed consent (FPIC) has transformative potential. Yet, there is a considerable gap between the theory and what happens in practice. Global actors supporting recognition of FPIC and effective prior consultation processes usually focus on normative standards and best practices. They concentrate much less on addressing the political challenges and opportunities that shape how these processes unfold.

With funding from the Ford Foundation, we looked at the politics of FPIC in Latin America, analyzing how the power and interests of the key players–across governments, companies and indigenous peoples–can determine the fate of FPIC and consultation processes in practice. This research focused on Brazil, Colombia, and Peru, and aimed to produce practical recommendations to address key political challenges in hopes of improving outcomes for indigenous and tribal peoples.

In addition, we are partnering with Dejusticia and the multi-stakeholder Dialogue Group for Mining in Colombia (GDIAM) to explore further the political impediments to meaningful mining consultation processes in that country, and to field ideas for navigating these more effectively in the future.

View our PLUS Politics brief, report, blogs and more


The politics of transparency and accountability

A strong push for greater ‘transparency and accountability’ has brought significant disclosure gains to the extractive industries. This is no small feat for a sector whose historic lack of transparency often made it prone to a range of abuses and “curses.” However, greater disclosure has not always resulted in effective accountability and the related goals of reducing corruption and improving development outcomes. There are still too many instances of ‘zombie transparency’ where information and data are flawed or unused, and their potential to help make governance more accountable, reduce corruption and improve development policy-making remains largely unrealized.

For this topic, we map some of the ways in which political realities can shape how existing efforts to promote transparency in the extractives sector unfold and, at times, impede the use of resulting data in service of greater corporate and government accountability and various development goals. Our aim is to provide insights for practitioners to use in developing and implementing more strategic approaches to work on transparency and accountability in the extractive industries  and other sectors.

View our PLUS Politics brief, discussion paper, blogs and more… 


Operating in politically hostile settings 

Extractives governance reform programs have made the least practical progress in countries ruled by authoritarian leaders and/or leaders who prioritize personal gains over the public good. These leaders tend to have highly concentrated power in their hands and show little interest in the public good. We argue that governance programs in such “politically hostile settings” tend to be ineffective because of a mismatch between the underlying assumptions and logic of the reforms pushed by global actors and the realities on the ground. The result can often be hollow commitments from leaders who have no intention of implementing them and ineffective aid packages. Or worse, through their assistance packages and interventions, global actors may unintentionally bolster the power of those at the heart of the problem.

Our work on this topic focuses on pinpointing why traditional governance reform approaches are ill-suited to  these settings. We use these insights to reimagine how to improve outcomes from the extractive industries within such contexts. Given the global increase in authoritarian activity that has followed the COVID-19 pandemic, the urgency and salience of this work has increased dramatically. We are working with an array of partners from global civil society and donor agencies to both track these recent developments and consider how to respond to them.

We are working on a PLUS Politics brief, discussion paper, blogs and more. Watch this space. 


Politically informed approaches to anti-corruption 

Corruption is one of the most serious challenges associated with the extractive industries, and often one of the most daunting obstacles to improving its governance. Countless studies over the years have shown a strong correlation between a country’s dependence on natural resources and high levels of corruption. Yet, work aiming to root out corruption has had limited success.

We focus on the ways in which powerful actors and interests can limit the efficacy of existing approaches to anti-corruption and consider practical alternatives. Drawing on our complementary expertise, we have partnered with the Anti-Corruption Evidence programs hosted by Global Integrity (GI-ACE) and the School of Oriental and African Studies (SOAS-ACE) to shed light on what more politically informed approaches to anti-corruption efforts might entail.

We are working on a discussion paper, PLUS Politics brief, blogs and more. Watch this space. 


The politics of environmental impact assessments 

Environmental impact assessments, or EIAs, are a prerequisite for most extractive projects. They are expected to be a tool for mitigating and managing projects’ potentially extensive environmental impacts. They are also intended to serve as the basis for participatory decision-making. But, more often than not, EIAs only partially meet these objectives.

Our work looks at the way in which political realities limit the effectiveness of EIA processes. We also aim to offer new perspectives on how to understand and address more systematically the key elements of political contexts that can shape EIA processes. Among other activities, we are applying such analyses to development corridors for a chapter in a forthcoming volume from the Development Corridors Partnership.

We are working on a discussion paper, PLUS Politics brief, blogs and more. Watch this space. 


Empowering and incentivizing reformers

Government institutions are made of people, and people have interests and differing levels of power, over each other and over particular issue areas. To secure commitment and to succeed in reform implementation, actors within government (and beyond it) must have an interest in advancing those reforms and the requisite power to do so. Quite frequently when it comes to extractives governance, we find one and not the other – those possessing power do not not have an interest in genuine reforms, and those with an interest in reforms lack the power to advance these effectively .

Our work explores the latter, instances of would-be reformers, with a genuine interest in advancing reforms  but lacking the power to make progress, or facing disincentives for attempting to do so.  We ask, can global actors do anything to help “reformers” translate good intentions into good practice more effectively?

To grapple with this question, we are conducting interviews with a range of government actors to better understand the nature of the challenges facing would-be reformers. We consider whether and how global actors hoping to get more traction through allies committed to good governance might address these challenges.

We will share an analysis of our research in a discussion paper, which will then be used as the basis for a workshop to refine our thinking.”

We are working on a discussion paper, PLUS Politics brief, blogs and more. Watch this space. 


How did we get here? 

Our work was informed and guided by our Executive Sessions on the Politics of Extractive Industries, a policy innovation lab led by academics and practitioners from across the world. Over the course of two years and four meetings, the group identified and framed key issues, produced practical insights, and offered new strategies and tangible guidance to address the political aspects of the governance of the sector and the implementation of context-specific solutions.

Read more about the Executive Sessions experts and their meetings.