Mining, Metals and Resource-based Development
When it comes to extractive industries (EI), who will benefit and how will be significantly determined on the informational playing field. In turn, this playing field is profoundly influenced by, and influences, power dynamics and interests among private, public, and social actors. Those who have the best access to and understanding of relevant information, and even the power to control what information others can access, will tend to emerge as the ones whose interests are best served.
Extractive industry firms considering investments in developing economies typically have sufficient resources and information to make well-informed decisions: to thoroughly investigate the economic opportunity, evaluate a range of potential costs and benefits, and analyze the political risks associated with those investments prior to making the investment decision. By contrast, in most cases, host communities and governments tend to have insufficient access to data, awareness of what information is publicly available, and tools to analyze relevant information about the foreign firms prior to having to decide whether to grant them the license to operate or how to regulate and monitor those investors. This imbalance in access to and understanding of company track record information early on in the extractives development process can result in greater incidence of lop-sided deals, human rights breaches, environmental degradation, corruption, non-compliance, and even civil conflict.
Various international actors have tried to address different aspects of these informational challenges. Some organizations working on these issues, such as the Columbia Center on Sustainable Investment (CCSI), Natural Resource Governance Institute (NRGI), and Chatham House, offer general assistance to governments by providing analytical tools, resources, databases of available agreements, trainings, and standards that can be utilized to analyze publicly available information. Others, such as Global Witness or PWYP, issue periodic ad hoc reports on individual company or government actions in specific countries. In addition, others, such as EITI or IPIECA, develop common processes or standards, including many addressing the production of specific information, that aim to generate better outcomes for host countries. Despite these efforts, political factors can still constrain the actual quality/usefulness of the information that is available, who has access to it, and what can be done with it. Information on the social and environmental track record of companies is a particularly salient and impactful example of this.
By acknowledging the interests and power dynamics that underlie access to information needed to recognize development consequences from EI, there is an opportunity to level the playing field by identifying and producing information, in a strategic and targeted way, explicitly intended to redress these imbalances. However, as decades of work on various aspects of EI transparency have shown, information on its own is not enough to empower key stakeholders. Therefore, alongside making the case for a mechanism that provides more available credible information on company track record, the authors will also consider the circumstances under which this information might be deployed to empower host governments and communities to improve development outcomes from EI.
