Extractive industries in a resource and climate constrained world

A month ago, a prominent international initiative on transparency in the extractive sector gathered in Lima, Peru. This was the first time that the Extractive Industries Transparency Initiative (EITI) has met in Latin America for its global conference since the initiative was founded in 2003.

Some weeks ago, a high profile environmental and indigenous rights activist, Berta Cáceres was murdered in Honduras. Known for her long-standing opposition to the region's biggest hydropower project, the four Agua Zarca giant dams, Berta was assassinated in her own home by gunmen. Gustavo Castro, an anti-mining activist was with her at the time and is believed to have also been a target of the attack. As of writing, no-one has yet been arrested in conjunction with Berta's murder. Gustavo's safety is at stake.

The EITI conference and Berta's murder may seem unrelated but they both stress how treacherous it can be to ensure that natural resource exploitation - be it oil, gas, minerals, forest, water, land - is carried out in line with internationally agreed human rights norms, in particular the principles of meaningful participation, non-discrimination and accountability.

While in many resource-rich countries, communities and NGOs have often spoken out against extractive projects that brought few, if any, socio-economic benefits for local populations, nowhere has there been such strong opposition to what is being called "extractivism" as in Latin America.

Berta's criticism of the Agua Zarca dams was not just about opposing that particular project. She questioned a development model based on the ever growing reliance on the extraction of finite natural resources (extractivism), at the expense of other more sustainable, carbon-neutral and equitable models of development. For Berta, this includes the right for communities to say no to major projects that seriously impact their lives. Berta is not alone. When I was in Lima last week, a group of Latin American NGOs mounted a campaign calling on the EITI to ensure that the possible impact that extractive activities has or can have on communities is taken into account. They asked for the EITI to request that oil, gas and mining companies disclose information on the social, environmental and climate costs associated with their projects. Given the potential of the EITI, the NGOs were calling on the initiative to explore how to include social and environmental information in its global standard and for the EITI to define what it can contribute to the debate on climate change in the sector.

Although the new 2016 EITI standard, released during the EITI Global Conference in Lima, acknowledges the importance of protecting civic space and includes a number of other useful refinements, it remains remarkably silent on requirements for information on social and/or environmental impacts of extractive projects. At a time when the EITI is itself moving "from reports to impact", and in the aftermath of the Paris Climate Conference during which governments unanimously recognised the urgency of addressing climate change, it is surprising for an initiative concerned with the accountability of a high-carbon industry to continue to ignore its contribution to climate and environmental risks. In October last year, 35 international NGOs wrote an open letter to the EITI calling on its board to modify the standard in order to ensure that fossil fuels companies disclose whether or not their projects can proceed in a 1.5 or 2 degree C world. The letter seems to have fallen onto deaf ears.

The EITI seeks to be a global Standard intended to promote open and accountable management of natural resources to strengthen government and company systems, inform public debate, and enhance trust. Whilst the steps taken to include the protection of activists is welcome, for the voices of communities to be truly taken into account and for the possibility to diversify emerging economies, improvements should be made to ensure that the initiative reflects the legal and economic realities of sustainability, climate change, human rights and natural resource depletion. Otherwise, the EITI will struggle to remain relevant in a rapidly changing geopolitical environment.