This topic overview, library and guides are jointly developed and curated by GOXI (co-convened by UNDP and the World Bank) and Extractives Hub teams.
4. Tools for Navigating and Preventing the Escalation of Conflict in Mining, Oil and Gas
A range of local, national and international tools aiming to address conflict over resource extraction have emerged in recent years. Similarly, international standards and safeguards have proliferated, aimed at enabling parties to navigate and address extractive issues better and to more proactively preotct communities and the environment from harm. The following outlines some key aspects and initiatives relevant to preventing the escalation of extractives-related conflicts. There is also a growing body of literature on the role of extractives in post-conflict recovery.
4.1 International Human Rights Laws and Compacts
The prevention of human rights violations is an essential element in reducing the potential for conflict to escalate, including conflict related to the extractive industries. The core content of human rights is set out in various instruments, most notably in the International Bill of Human Rights, the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights. In practice, regional conventions and courts or commissions can be considered equally important in enforcing and applying these norms, however.
(a) Human rights and vulnerable groups
Some human rights instruments focus on potentially vulnerable individuals or groups. These include the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), which was adopted by the General Assembly in 2007. Alongside other instruments such as the Indigenous and Tribal Peoples Convention (ILO 169), the declaration is credited with a role in sensitising governments, private sector and CSOs to the often conflicted interaction with indigenous people around extractive operations. Many governments have ratified these instruments and complemented them with domestic laws. A challenge remains for companies and governments to consistently implement these legal instruments in their operations.
(b) Human rights and business
Another area of human rights initiatives and international law centres around the responsibilities of businesses. The United Nations Global Compact represents a key initiative in this regard and was established with the aim of encouraging businesses worldwide to adopt sustainable and socially responsible policies. As a principle-based framework, it encompasses ten principles concerning human rights, labour, the environment and anti-corruption and has grown to include 13,000 participating companies.
4.2 Social and Environmental Safeguards and Standards
Recent years have brought forward numerous sets of principles, standards, best practices and public reporting procedures that allow for a preventative and proactive approach to the development of the extractives sector in a socially and environmentally responsible way.
(a) International financial institutions
Institutions like the International Bank for Reconstruction and Development, the International Finance Corporation and regional development banks have been key players in setting standard and safeguards for responsible and sustainable resource extraction. As the largest source of development finance globally, they have not only played a role in developing approaches to conflict prevention, but have also leveraged their position as financers to require and incentivise clients to use their best practice safeguards. In particular, the Equator Principles, as adopted by many financing institutions, provide a risk management framework for determining, assessing and managing environmental and social risk in project finance, primarily aimed at a minimum standard for due diligence to support responsible risk decision-making.
(b) Voluntary principles and initiatives
Implementing international best practice and available standards can enhance the legitimacy of extractives operations. Normative frameworks on natural resources include multilateral environmental agreements or examples of best practices, such as the Natural Resource Charter and the Extractive Industries Transparency Initiative (EITI). Founded in 2005, the EITI now includes 51 countries and focuses on revenue flows between government and companies, involving private sector, civil societal and governmental actors. It creates a forum for different actors with divergent interests to communicate and verify extractive revenues.
Particularly for companies, there are at times good reasons to adopt environmental standards and operating procedures that go beyond existing legal frameworks, such as in the area of water and air quality, operational practices to protect biodiversity and promote conservation, or technologies used to manage hazardous wastes. Some of these standards are now also required by international financial institutions as a precondition to financial support.
Other initiatives in this area include the United Nations Guiding Principles on Business and Human Rights (UNGPs), which provide a global standard for preventing and addressing the risk of adverse impacts on human rights linked to business activity. As the first corporate human rights responsibility initiative to be endorsed by the United Nations, the UNGPs encompass three pillars: a) the state duty to protect human rights; b) the corporate responsibility to respect human rights, and c) access to remedy for victims of business-related abuses. The UNGPs are credited with providing a requisite common language for business, civil society and governments, with countries on all continents committed to, or in implementation, of National Action Plans to disseminate and implement the UNGPs.
4.3 Building Effective Grievance Mechanisms at all Levels
Effective dispute resolution processes and grievance mechanisms represent a key element to preventing the escalation of conflict, by providing an avenue for communities to express concerns at an early stage. These mechanisms, such as those outlined in Pillar 3 ‘Access to Remedy’ of the UN Guiding Principles on Business and Human Rights (UNGP), provide a means by which issues causing conflict can be addressed and remedied before they escalate.
Non-judicial grievance mechanisms are institutionalised and organised methods consisting of specified roles, rules, and procedures for systematically resolving complaints, grievances, disputes, or conflicts. They are a type of dispute resolution system that operates outside the formal, traditional justice system.
When applied to company-community grievances, the International Finance Corporation (IFC), the private lending arm of the World Bank Group, defines a company-community grievance mechanism as “A process for receiving, evaluating, and addressing project-level grievances from affected communities at the level of the company, or project.”
Non-judicial grievance mechanisms are intended to complement and supplement the judicial system. Even where judicial systems are effective and well resourced, they cannot carry the burden of addressing all alleged abuses. Project level grievance mechanisms provide an avenue for affected individuals or communities to raise questions or concerns with a company and have them addressed in a prompt and consistent manner. It can also prevent a dispute from escalating if its dealt with at the project level.
Non-judicial grievance mechanisms operate on the following levels
International level (e.g. IFC’s Compliance/Advisor Ombudsman).
Regional level (e.g. mechanisms of regional development banks)
National level e.g. National Contact Points of the Organization for Economic Cooperation and Development, National Human Rights Institutes)
Components of a grievance system
Across levels, well designed grievance systems generally should have a transparent grievance receipt and registration system. Next, grievances are addressed for eligibility assessment to ensure the mechanism is relevant for the complaint, and the complaint has standing. The grievance is then evaluated. Generally, there are choices for how to solve the problem, which can occur with or without the assistance of independent third parties. These include:
Internal decision-making processes
Joint problem solving
Third-party decision making
The grievance is tracked, monitored and reported back to the community who lodged the complaint. There is feedback to the complainant and information sharing. It is also important that the organization can learn from the patterns of complaint, and identify systemic problems in order to prevent them.
4.4 Participatory Tools, Community Engagement, Free, Prior, Informed Consent
Recent research finds that lack of planning and meaningful stakeholder consultation is a factor which has contributed to the majority of resource conflicts. Participatory approaches and tools can be used to navigate and address many of the conflicts that occur, for example:
(a) Stakeholder engagement
Local stakeholder consultation should be approached such that its benefits are culturally appropriate, there is interest and ownership and additional benefit opportunities are identified and incorporated into the project. Poor engagement continues to be a challenge when there is insufficient capacity or trust to develop the necessary relationship-building processes. Through community engagement, stakeholders can also develop their capacity for dialogue, communication and sustainability planning.
(b) Free, Prior, Informed Consent (FPIC)
FPIC is a specific right that pertains to indigenous peoples and is recognised in the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP). It allows them to give or withhold consent to a project that may affect them or their territories. Tools to advance the implementation and practice of FPIC aim at encouraging participation in decision-making. Decisions should be driven by the affected community without coercion, well in advance of any project activities. Furthermore, groups concerned in the FPIC process should receive adequate information on the possible economic, social and environmental impacts. Finally, extractive projects should only be possible with their consent. This Oxfam Report includes further guidance on the definition and potential implementation of FPIC.
(c) Participatory planning
Participatory planning represents a particular process within community development and has become an important tool to prevent conflict. Its major aims are to harmonise different views within the community, including marginalised voices, to avoid conflict and to share responsibilities. Another important aspect of participatory planning is the sharing of resources, increasing trust and cooperation between stakeholders.
This case study from Peru highlights the potential role of participatory planning in conflict prevention in the extractives industries.
(d) Impartial data and technical assessments
Impartial, verified data on resource deposits and results of environmental monitoring can be hard to obtain and a lack of access to this data can result in tension and conflict. This is because it breaks down the level of trust between stakeholders. Conflict over the lack of impartial data and transparent technical assessments has been known to end in confrontation, damaged reputations and relationships, project blockades and direct violence. In contrast, access to information including impartial data and technical assessments, such as joint fact finding and participatory monitoring, allows for evidence-based dialogue and decision making, in turn contributing to confidence in the data being used to make decisions, and thus relationships of trust.
For more information on impartial approaches to data, please visit this resource, Geodata for Development: A Practical Approach.
(e) Land use plans
A further mitigation strategy is the development of land use plans and spatial plans for environmentally sensitive areas. Land use planning methodology includes the consideration of public input, mapping out the importance of areas to different groups, diverging land use patterns, and potential disputes between groups and stakeholders. Participatory Land Use Planning (PLUP) is an interactive process in which local communities could discuss and determine how to manage the land and other natural resources in their locality. Land use planning can be an effective tool in preventing conflict.
4.5 Revenue Sharing and Shared Benefits
The issue of inadequate benefit sharing from natural resources has gained significant attention in recent years. As one form of benefit sharing from resource extraction, subnational revenue sharing mechanisms have in particular gained popularity. As of 2017, more than 30 countries had created such systems for the distribution of revenues from natural resources, distinct to those that retain government revenues centrally. Subnational governments in Nigeria and Peru, for example, are now receiving more than 80 percent of their budgets in the form of resource revenue transfers from central government.
These kinds of revenue sharing mechanisms can be seen as a way to directly benefit or compensate people in areas impacted by extraction and thus help to mitigate conflict. Revenue sharing was recently defined as “an arrangement through which government revenue from extractive activities is shared with subnational authorities”. This can be done by either granting subnational authorities rights to collect and retain taxes directly, or via special resource based intergovernmental transfer systems.
Revenue sharing mechanisms are however not the sole method of sharing benefits from extraction. Communities often want to ensure that they receive adequate benefits from extraction in their territory, including participation in economic development, improved training, education and job opportunities. Similarly, good practice often considers companies co-funding shared infrastructure, or contributing to parts of implementing a community’s local development plans. A formalisation of these development plans under what is known known as Community Development Agreements (CDAs) is increasingly accepted as a common tool for benefit sharing. Some countries have adopted CDAs as a requirement in domestic legislation (more on community development can be found here).
4.6 Transparency and Accountability
The focus on transparency and accountability intensified in the 1990s, focussing on the free and open disclosure of activities that are of public interest, including extractive activities. Transparency is meant to reduce corruption, enabling the revenue from extractive industries, to transform the economy, reduce poverty and raise national living standards, and be used to enhance citizen wellbeing.
The political positioning of the oil and mining industries is fundamentally different today than at the turn of the 21st century. Public scrutiny is an accepted global value, even if various actors continue to debate the details of implementation, and appropriate scope. The national security arguments that were used to justify secrecy for decades are widely gone, and a host of transparency and accountability initiatives have come into play in the sector.
4.7 Strengthened Governance Frameworks
Besides the above outlined strategies, resource governance also directly or indirectly rests on the policy, regulatory and legal framework that governs the development and management of the extractives. It is therefore key to address any of the issues described above from a governance point of view, to ensure legal-, regulatory- and policy-based implementation of any respective mitigation strategy.
The United Nations, EU agencies, multilateral or regional development banks, and other organisations and practitioners can moreover all play a role in conflict management and prevention systems through the provision of technical support to governments or by working directly with local organisations, businesses, or other stakeholders. Often, these institutions are also well-placed to support, provide resources and institutional capacity building for mediation between conflicting parties.
4.8 Improving Institutional Capacity of Governments to Navigate Conflict Driven by Extractives
Strong institutional capacity allows government to navigate conflict driven by extractives more effectively. There are a range of tools for preventing and navigating conflict available, including, for example, dialogue tables, which can serve as an effective de-escalation method if supported and coordinated effectively by agencies across government. Early warning systems represent another such measure which governments can introduce to mitigate conflict.
Further, effective institutional capacity is vital at each stage of the Extractive Industries Value Chain. According to the World Bank Group, this requires targeted skills, training, adequate resources and compensation and insulation from political interference. Where institutional capacity is weak, support can be sought from external expertise or finance institution technical assistance programs which can provide training and address issues on behalf of the government, for which good practice dictates the need for careful discussion and planning with beneficiaries. This report offers additional information on experience in institutional design in resource-rich countries.
4.9 Mediating Mining, Oil and Gas Conflicts
Mediation is a vital tool for mitigating and resolving conflicts over oil, gas or mining activities. Mediation is defined by the United Nations Department of Political Affairs (UNDPA) and United Nations Environment Programme (UNEP) as a non-adversarial and collaborative process through which an impartial third party helps parties in a dispute reach a resolution through interest-based negotiations.
The UNDPA and UNEP have highlighted a number of key components of successful mediation over natural resources including: contextualisation; clear but nuanced mapping of actors and interests; equal access to impartial scientific and technical information about the resource; careful attention in identifying stakeholders to be engaged in the mediation; collaboration over shared benefits; the use of mediation techniques to overcome critical impasses and entrenched positions; and laying the foundation for future reforms.
4.10 Multi-Stakeholder Dialogue as a Tool to Navigate Mining, Oil and Gas Disputes
Multi-Stakeholder Dialogue are an important tool for navigating mining, oil and gas disputes. Multi-stakeholder dialogues are a tool to seek consensus on difficult natural resource-related issues, including those linked to mining, oil and gas. The UN defines dialogue as: “a process of people coming together to build mutual understanding and trust across their differences, and to create positive outcomes through conversation”
Multi-stakeholder dialogues are deliberative meetings that address both politically controversial and technically complex issues. Multi-stakeholder dialogues seek to exchange information and build consensus recommendations between the government, company, community and other stakeholders. Multi-stakeholder dialogues are a tool to seek consensus on difficult natural resource-related issues before there is any conflict, or at different points in the conflict lifecycle.
These dialogues have a convener, a negotiated goal, stakeholders who are willing to engage in dialogue on tough issues and address it in a disciplined manner, and facilitators to help organise and moderate proceedings. The convener has to be an organisation that is credible and well positioned to bring the key actors together. In short, an organisation with whom participants are willing to engage.
Multi-stakeholder dialogues bring diverse interests to the table, often focusing on a regulatory, policy, or planning issue that is of common interest. These dialogues seek to build practical solutions to complex problems. Multi-stakeholder dialogue is complementary to other tools such as mediation and conflict prevention for navigating natural resource related disputes. Multi-stakeholder dialogue helps to achieve a range of outcomes, even when the dispute is not resolved. It contributes to:
Building mutual trust and understanding across differences
Analysing a shared problem or context jointly
Developing a shared agenda for action
Developing conflict-sensitive programming with broad buy in
Implementing multi-stakeholder dialogue processes is challenging and specific issues must to be addressed, such as:
Imbalances of power;
When mistrust outweighs the will to find common ground;
The issue of representation, particularly when key groups are insufficiently organised or lack a clear sense of collective identity;
Balancing time pressure with the need for collaboration;
Low capacity for follow up and implementing agreements;
Strong specific, often hidden interests.