It's a tragic contradiction: Countries rich in natural resources are often those that suffer from extreme poverty. In fact, more than 60 percent of the world's poorest people live in countries with valuable and abundant natural resources like oil, gas, and minerals. But most citizens rarely share in the wealth. In fact, their lives often worsen, because their countries fall victim to what is known as the "resource curse."
Relying too heavily on oil, gas, and minerals makes countries vulnerable to volatile global demand and discourages investment in sectors like manufacturing and agriculture—which can distribute jobs and income more widely across society. When community lands are seized for pipelines or mines, farming and fishing communities suffer. Indigenous peoples are particularly vulnerable—governments and companies tend to overlook their concerns. Too often, affected communities receive little information about these projects and have no say in whether or how resources will be extracted from their lands. In addition, governments do not always distribute revenues back to communities. The result is that extractive industries often unleash pollution, corruption, displacement, social unrest, and human rights violations. Oil and minerals are already the number one export of most poor countries, and countries are becoming increasingly dependent on these exports.
Oxfam works to break the resource curse and harness the potential of extractive industries to support sustainable development. We believe local communities most directly affected should have a voice in whether oil, gas, and mining projects go forward and how they are carried out. We also believe that projects should be socially and environmentally responsible. These projects should not add to poverty and powerlessness—they should help overcome them.
Oxfam's Extractive Industries Global Program is rooted in deep relationships with local partners in 13 countries and drives policy change through research, technical assistance, advocacy, and campaigning strategies. We engage with corporations, financial institutions, and governments, and support global campaigns to uphold human rights and environmental standards.
We press for public disclosure of the impacts of projects and the revenues governments earn from them.
We believe communities have...
- The right to know — the right to information on the social, environmental, and economic effects of oil, gas, and mining projects, and to information about how much companies are paying governments.
- The right to decide — the right to free, prior, and informed consent (FPIC) for all communities affected by oil, gas, and mining operations. For indigenous people, respect for FPIC is a right under international law and is critical for protecting sacred lands and cultural identity.
We help communities participate meaningfully in these decisions by providing local organizations with strategic advice, financial support, and technical training.
This enables them to...
- Assess the costs and benefits of natural resource extraction.
- Articulate clear interests when confronted by any proposed or existing oil, gas, or mining project.
- Create and support development goals for communities.
- Hold corporations and governments accountable for respecting the rights of local communities.
- Participate in social and environmental monitoring of existing projects.
- Track the use of revenues collected by national and local governments to see that they fund community projects.
For example, in Ghana, we help communities access information about revenues from oil and mining, as well as about water contamination caused by mining. In Cambodia, we support a coalition of local nongovernmental organizations working to ensure that the revenues from the country's coming oil boom are shared in a transparent way. In El Salvador, we work with grassroots organizations to promote informed public debate about mining projects. And in the US, we played a leading role in a campaign to pass landmark transparency legislation through Section 1504, referred to as the Cardin-Lugar provision, of the Dodd-Frank financial reform law, which requires oil and mining companies to disclose the payments they make to foreign governments.
Our new Center for Strategic Support on Extractive Industries (an Oxfam International Knowledge Hub) is providing support to emerging extractive industries programs in the Dominican Republic, Liberia, Mexico, Mozambique, South Africa, South Sudan, Zambia, and Zimbabwe.
We lobby Congress and the US administration; conduct action-oriented research; organize briefings, conferences, and speaker tours; issue reports; and conduct outreach to raise awareness.
- Testimony of Anquan Boldin, Ambassador, Oxfam, to House Committee on Foreign Affairs, Subcommittee on Africa, Global Health and Human Rights: "Is there an Africa resource curse?"
- "Witness to history and injustice"
- "Land rush brings changing times to Cambodia"
- "Concerns for water in Bolivia"
- "Protect Community Rights and Resources" fact sheet
We also engage with international financial institutions (IFIs), including the World Bank, InterAmerican Development Bank, and the International Monetary Fund (IMF), and with key oil, gas, and mining companies, regulators, shareholders, and investors.
We believe energy and mining corporations should...
- Respect basic human rights, follow socially responsible practices, and engage in culturally appropriate and meaningful consultations with local communities.
- Publicly commit to ensuring the free, prior, and informed consent of local communities that face potential impacts from project activities.
- Publicly disclose environmental and social impact assessments, and ensure that these assessments address human rights issues and allow space for community participation.
- Disclose payments made to governments, and disclose the contracts upon which these payments are based.
- Commit to independent monitoring of the social and environmental effects of their operations with the participation of local community members.
- Ban operations in culturally and environmentally sensitive areas.
- Follow standards of financial disclosure, as well as environmental, labor, and human rights protection standards, that are at least as strong as those required in a corporation's home country and as the performance standards on environmental and social sustainability of the World Bank's International Finance Corporation.
- Cover in full all cleanup and remediation costs.
Projects supported by IFIs should...
- Include effective, participatory social and environmental impact assessment processes and monitoring systems.
- Generate transparent revenues, based on publicly available contracts, to reduce poverty, provide essential services, and improve infrastructure in areas that will benefit poor people.
- Encourage economic diversification to prevent overreliance on the export of unprocessed primary commodities.
- Require companies to obtain the free, prior, and informed consent of communities.
- Provide funds for social and environmental mitigation measures when projects are finished.
Oxfam also participates in multi-stakeholder initiatives including the Extractive Industries Transparency Initiative (EITI) and monitors implementation of these initiatives.
Goals & priorities
Transparency and accountability
Oxfam advocates for sweeping measures to improve transparency and governance. Africa has been losing an average of a billion dollars per week in illicit financial flows. Fuel-exporting nations hemorrhage money the fastest. And with $11 billion in new discoveries of iron, gas, gold, and coal, the continent could be poised to lose much more. Oxfam welcomes steps including:
- The G8's recent pledge to raise global standards for extractives transparency and its support for mandatory payment disclosure requirements and the EITI.
- The Economic Community of West African States (ECOWAS) initiative to develop a regional mining code to protect the rights of local communities and the Africa Union's Africa Mining Vision.
However, because transparency does not guarantee accountability or effective pro-poor public investments, we will explore the blockages that prevent these desired outcomes and we will develop new strategies for empowering citizens to ask questions and demand reforms. Oxfam's Active Citizenship work will enhance oversight of public finances, particularly those that flow through national budgets and expenditures.
Where does the revenue go?
Is the problem that countries are getting a bad deal in their oil-gas-mining contracts and therefore are losing potential revenue? Is it an issue of power, where in the political economy of budget allocations, pro-poor sectors like education, health, or small-scale agriculture lose out to elite interests? Are there leakages at the level of expenditure and execution, where resources bleed out to corruption or political patronage? Or is it an issue of leakages by means of poor quality of service delivery?
As Oxfam's Active Citizenship work continues to progress, we are asking ourselves how transparency of data and information can provoke citizens to ask questions and mobilize around any of these issues. In essence, how does transparency lead to accountability?
To answer this question, Oxfam will bring together and support the thinkers and practitioners who are actively engaged in ensuring transparency—activists and community leaders furthering the accountability of public investments on the ground and champions of public financial management reforms within government who are trying to meet these demands. Oxfam is on the lookout for promising local, national, and global initiatives that are moving active citizenship forward. We are eager to add our own voice to these initiatives and to help strengthen the global civil society movement for greater accountability of public finances.
Free, Prior, and Informed Consent (FPIC)
FPIC is a key priority for Oxfam and includes...
- Community access to complete project information and independent analysis of probable impacts;
- Adequate time for community decision-making; companies must adjust their schedules accordingly;
- Community decision-making free of coercion or manipulation by project proponents;
- Community opportunity to reject a project or to accept it with appropriate conditions;
- Participation in setting the terms and conditions that address the economic, social, and environmental impacts of all phases of extraction and post-extraction;
- Opportunity for community representatives to receive training to strengthen the community's decision-making processes.
Since 2009, ECOWAS, the African Commission on Human and Peoples' Rights, the Pan-African Parliament, and Africa Mining Vision have all called on states to respect the FPIC of local communities that face potential impacts from mining, hydrocarbon development, or natural resource projects more broadly.
Extractive industry companies and associations, lenders, and investors have also developed policies requiring FPIC. These requirements may reflect a growing body of evidence documenting the potential costs generated from social conflict around extractive industry projects.
Oxfam has promoted FPIC by conducting research and publishing important reports. These reports include...
- Free, Prior, and Informed Consent in Africa: An Emerging Standard for Extractive Industry Projects
- Free Prior and Informed Consent in the Philippines: Regulations and Realities
- Community Consent Index: Oil, Gas and Mining Company Public Positions on Free, Prior, and Informed Consent (FPIC)
- From Controversy to Consensus? Lessons Learned from Government and Company Consultations with Indigenous Organizations in Peru and Bolivia
- Oxfam Guide to Free Prior Informed Consent
- Free, Prior Informed Consent: A Review of Free Prior Informed Consent in Australia
- The Right of Indigenous Peoples to Prior Consultation: The Situation in Bolivia, Colombia, Ecuador, and Peru
Achievements so far
Since the late 1990s, Oxfam has been a leader on addressing extractive industries issues. Oxfam has supported the following:
Section 1504 of the 2010 Dodd-Frank Act, also known as the Cardin-Lugar provision (see case study). Oxfam supported the Energy Security Through Transparency Act, which was introduced in the Senate in 2009. This bill was included as a provision in the Wall Street Reform Act signed into law in July 2010. This law requires oil, gas, and mining companies to publicly disclose payments made to foreign governments. Oxfam is working to make sure the government maintains strong rules to implement this law properly.
The US budget deal. The US budget passed late last year includes the approval of a US-Mexico transboundary hydrocarbons agreement, with no exemption for the oil payment disclosure requirements of Section 1504 of the 2010 Dodd-Frank Act. That agreement opens up a vast area between the two countries in the Gulf of Mexico for oil and gas exploration. The House version of the bill had included payment transparency exemptions, which Oxfam and the Publish What You Pay (PWYP) coalition fought to remove. The same week that the agreement was passed through the budget deal, the Mexican Congress agreed to open up its petroleum sector to foreign investors and included important new transparency provisions.
Canadian mining companies' endorsement of payment disclosure. In January 2014, the Mining Association of Canada, the Prospectors and Developers Association of Canada, Publish What You Pay (PWYP) Canada, and the Revenue Watch Institute released recommendations to the Canadian government for mandatory disclosure requirements in Canada. This action marks the largest grouping of companies to endorse extractive industry revenue disclosure, with around 1,300 companies represented. The recommendations include company-by-company and project-by-project basis reporting, with no exemptions. Oxfam urges the SEC to follow suit.
Ghana's ambitious new petroleum revenue management law. Ghana's new petroleum revenue management law is a sign of progress as well. In 2009, Oxfam and the Ghanaian organization ISODEC published a report on Ghana's new offshore oil reserves that advocates for transparent, accountable, and efficient development of Ghana's oil wealth. Important transparency provisions are included in Ghana's legal framework for managing oil revenues. Oxfam, its partners, and local farmers are pressing the government to allocate a larger share of oil revenues towards agricultural initiatives that help alleviate poverty among smallholder farmers. Oxfam and partners utilized social media to engage youth to organize in this effort and mobilized 20,000 farmers in rural communities to sign a petition asking the government to use its oil money to invest in Ghanaian agriculture. One hundred farmers marched to Parliament to present the petition. A week after the petition delivery, the Ghanaian government presented to Parliament a 2014 budget that proposes significant spending increases on agriculture and education.
Economic Community of West African States (ECOWAS) policy. In 2009, ECOWAS adopted a uniform policy that will standardize the social, environmental, and financial requirements for mines in the region. Mining companies must now obtain the consent of local communities and give them a meaningful role in decisions. After member countries revise their laws, mines will have to comply with more stringent requirements for the environment and financial transparency. Oxfam helped to convene representatives of West African citizen groups to consult on the new policies. In addition, Oxfam has organized youth and environmental activists in a popular campaign designed to encourage West African governments to change their laws to comply with new uniform policies on mining required by ECOWAS.
Responsible mining in Central America. Oxfam published a report in 2009 on the costs and benefits of mining in Central America that found that mining is unlikely to significantly contribute to the economic development of Guatemala, Honduras, or El Salvador, and will not offset the risks of environmental degradation. Governments in Central America are currently reviewing proposals to reform their mining laws.
Grassroots campaigns in Peru.In Peru, Oxfam is supporting a grassroots campaign by communities in Piura that are likely to be affected by a copper mine proposed by a Chinese company—despite clear results of a citizen referendum rejecting the proposal.
Chevron shareholder resolution.Oxfam and fellow shareholders filed a shareholder resolution with Chevron calling for a comprehensive policy of publicly disclosing all payments made to governments of countries where the company operates. The resolution was approved in May 2010.
UN Declaration on Rights of Indigenous Peoples. In December 2010, the US endorsed the UN Declaration on Rights of Indigenous Peoples, which enshrines the right of indigenous peoples to free, prior, and informed consent (FPIC).
IFC standards for FPIC. In December 2010, the IFC (the private sector lending arm of the World Bank) adopted new standards requiring clients to ensure FPIC for projects that impact indigenous peoples under certain circumstances.
IFC Sustainability Framework
The IFC released a new Sustainability Framework, a set of policies outlining IFC's responsibilities and requirements for companies that receive loans for development projects. It requires IFC clients to secure the free, prior, and informed consent (FPIC) of indigenous communities prior to launching development activities expected to generate adverse impacts on their lands and natural resources.
In the past, the IFC has failed to properly measure the risks of oil and mining projects, such as the Chad-Cameroon pipeline, before providing loans to companies operating in countries with serious human rights problems and weak institutions. Oxfam hopes the new IFC framework will help to ensure that extractive industry projects only receive financing when adequate governance conditions and strong environmental and social safeguards are in place. The new policy on FPIC sets a standard for companies and financial institutions, including dozens of export credit agencies and private banks that commit to the Equator Principles—a voluntary set of standards for identifying and managing social and environmental risk in project financing. The Equator Principles are based largely on IFC policies. The Sustainability Framework also requires IFC-funded oil, gas, and mining companies to publicly disclose their contracts with host governments, providing the public with information it can use to hold governments accountable.
Peru's Indigenous Peoples Consultation Law. In September 2011, Oxfam worked to support the development of Peru's Indigenous Peoples Consultation Law and implementing regulations. Despite some government backsliding, we are engaged and pushing to have the law fully and properly implemented.