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Moving Toward Sustainable, Long-term Development

Timor-Leste heads the g7+ to focus on reconstruction in post-conflict societies

Members of a high level delegation from the government of South Sudan, including chief negotiator Pagan Amum, front center wearing blue blazer, visit the oil fields of Paloich, South Sudan.

Earlier this year 11,000 villagers in Nigeria swarmed Shell Oil Co., infuriated that the oil giant had polluted their waters and devastated farmlands. The issue has now become a court matter in which 35 villages are accusing the oil company of devastating a once-thriving fishing community.

That was followed by another incident last year in which a Nigerian unit of Shell took responsibility for the spill of approximately 4,000 barrels of crude oil in the Niger Delta. That also turned into a lawsuit. Mutiu Sunmonu, Managing Director of Shell Nigeria, said the firm made every effort to compensate for the damages, but many citizens were still left frustrated.

Disputes over natural resources between governments, companies and people resonate in the g7+ countries. Though Nigeria is not part of the g7+, member countries are paying attention to the events unfolding around the world as they take ownership over their lands and hold companies accountable to their national laws and regulations.

The g7+ countries are rich in natural resources, but are also some of the poorest in the world. The DRC has trillions of dollars worth of cobalt, copper, diamonds and petroleum. South Sudan is also sitting on billions of dollars in oil. Liberia holds 40% of the world’s deposits of iron ore. Yet the average person in all three of these countries lives on less than $2 a day, and life expectancy is among the lowest in the world.

The g7+ countries are moving forward to address their development needs, establish good governance practices and take tough stances.

Inspired by the success of Timor-Leste in managing its natural resources, the g7+ countries are moving forward to address their development needs, establish good governance practices and take tough stances. These countries assert that until conflict-affected countries have sovereignty over their own resources to develop their own political, economic and social infrastructures, peace and stability can never be achieved.

“The conflict minerals problem is certainly complex. If solutions are going to be found, all the stakeholders need to play a part — including companies, investors and consumers,” said Bob Walker, Vice President of Ethical Funds, a Canadian-based socially responsible investment firm in an interview with the Toronto Globe and Mail.

South Sudan Standing Tall

South Sudan President Salva Kiir

Imagine achieving independence from a country after a long, bitter and protracted war and then having to negotiate with that nation. That’s the situation South Sudan is facing with Sudan.

South Sudan split from Sudan in July under a 2005 peace deal that ended decades of civil war, but the two have yet to resolve a range of partition-related issues. In July 2011, South Sudan became an independent nation from Sudan, but longstanding disagreements between Sudan and South Sudan quickly emerged over oil, the chief natural resource in the region. It is estimated that 80% of the oil between the two countries exists in South Sudan. According to documents from South Sudan’s Ministry of Finance, oil revenues account for $8 billion or more than 98% of the government’s budget.

The two countries still need to work together. South Sudan took about three quarters of Sudan’s oil output, but it still needs to use pipelines and other facilities in Sudan to export crude.

Negotiations reached an impasse; and, in January 2012, South Sudan halted its production of about 350,000 barrels per day in protest after Khartoum reportedly started taking some oil as “dues in kind” to make up for what it said were fees Juba had failed to pay since independence.

South Sudan’s chief negotiator Pagan Amum has reportedly said that his country hoped to end the dispute within “a month or two,” but the international impact is already being felt. Most of that oil from the region is exported to Asia. China has built $20 billion infrastructure in oil, rigs, pipelines and refineries mostly in Southern Sudan and has reportedly lost 6% of its imported oil because of the conflict.

Democratic Republic of the Congo Looking For Stability

Managing resources is especially difficult for the Democratic Republic of the Congo (DRC) because this African nation has been mired in conflict for decades.

Workers stand in a muddy cliff as they work at a gold mine in northeastern DRC. The conflict has often been linked to a struggle for control over its minerals resources.

This conflict that began in 1998 has been called the most deadly war since World War II. More than 5.4 million lives have been lost in this conflict that has been a dubbed a “war over resources”, and every month, another 45,000 die. With a population of 71 million, the average Congolese lives on less than 20 cents a day, and the prospects for peace look dim when “arms are still seen as the way to go,” says Deputy Chief of Mission of the DRC Ministry of Planning Armand Kasumbu Borrey.

Yet, the DRC is also one of the most resource-rich countries in the world. The DRC has 80% of the worldwide resource of coltan, a dull black metallic ore used for manufacturing products like cell phones, and 10% of the world’s collection of copper.

The DRC is attempting to emerge from conflict, set the government practices necessary to be accountable to its citizens and manage its resources. Nearly one in four Congolese are directly or indirectly dependent on small scale mining. According to a new law, all contracts involving mineral, timber, oil and gas concessions public will be published on ministry web sites within 60 days.

There are also pending regulations in the U.S. Congress to prevent natural resources from being diverted to militias. These are important steps in a complex conflict, says Laura E. Seay, assistant professor of political science Morehouse College in Atlanta.

“The Congolese want their country to be better,” Seay said. “They want to educate their children. They have a strong sense of national pride. They want the government to do better. That’s the beacon of hope.”

Liberia Holding Companies Accountable

Liberia is an example of a country becoming proactive with international companies. Over the last six years, Liberia — rich in minerals, agriculture and marine resources — has undertaken a series of government-led initiatives designed to more effectively manage its resources and develop its economy. Liberia has actively engaged with corporations and nonprofits as well.

Like Timor-Leste, Liberia has refused to accommodate major corporations, when their plans conflicted with its citizens’ long-term interests.

For example, when European-based mining firm ArcelorMittal first approached Liberia to begin mining, the government required compliance with national laws and procedures. Joseph Matthews, head of government and community relations for the firm, said in a documentary that the process took several years.

Liberian President Ellen Johnson-Sirleaf accepts the Nobel Peace Prize in Olso, Norway in 2011. Liberian President Ellen Johnson-Sirleaf accepts the Nobel Peace Prize in Olso, Norway in 2011.

ArcelorMittal first established itself in Liberia in 2005 and started working on rehabilitating the rail in 2007. The company has been mining ever since and recently hit its 1 million iron ore ton shipment.

The firm is complying with Liberia’s transparency initiatives. After transitioning from a 14-year conflict to democratic rule, Liberia in 2009 became the first African nation to become compliant with the Extractive Industries Transparency Initiative (EITI) process. The process ensures that all payments to the state by natural resource companies will be publicly disclosed on a company-by-company basis. In its most recent report, Liberia published payments by 71 companies and revenue data by five agencies of the government.

“The success of Liberia in reaching EITI Compliance demonstrates what governments, companies and civil society can achieve when working together and political will is firmly behind the process,” EITI Chairman Peter Eigen said in a statement.

“We’ve always had these resources. We just haven’t used them well.” Ellen Johnson Sirleaf Liberian President and Nobel Peace Prize Laureate

EITI is only one step in the process. Like Timor-Leste, Liberia has even more ambitious plans. President and Nobel Peace Prize Laureate Ellen Johnson Sirleaf believes Liberia needs to use its resources to benefit its citizens.

“Liberia’s experience in a way has been a resource curse,” Sirleaf said in an interview with PBS. “We’ve always had these resources. We just haven’t used them well.”

Looking Ahead

The challenges the g7+ countries face won’t go away, but there are increased efforts at mobilizing natural resources to ensure a peaceful future. Timor-Leste Minister of Finance and g7+ chair Emilia Pires said the g7+ is the right forum for countries to share best practices. Timor-Leste succeeded, and she said other countries can, too.

“Why can’t we all get together and talk? We need to take our destiny in our hands,” she said.


Goodbye Conflict, Welcome Development