Corporate social responsibility in a changing world: Targeting conflict resource exploitation

by Rhodri C. Williams

The march of the voluntary guidelines continues, it seems, with new approaches geared to address gaps in earlier efforts to urge corporate self-control. As Peter Spiro noted some time back in Opinio Juris (and Chris Huggins pointed out in these pages), the promotion of “soft” voluntary standards as a means of getting at some very hard human rights violations is still seen with skepticism in many quarters.

Nevertheless, Mark Taylor makes an engaging case for such standards in a recent Open Democracy piece on the role of natural resource extraction in fueling conflict. The article highlights the Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict Affected and High Risk Areas, a standard adopted by the Organization for Economic Cooperation and Development (OECD) in May 2011 and subsequently regulated in the US through new regulations issued by the Securities and Exchange Commission (SEC)  under the Dodd-Frank Wall Street Reform Act.

Taylor notes several key insights that have emerged in the wake of older certification schemes such as the Kimberly Process for conflict diamonds. These include the manner in which both illicit inflows into conflict areas (such as small arms) and outflows (such as natural resources) have become incorporated into global market flows, as well as the extent to which vulnerable local populations may be just as dependent on extraction activities for their survival as warlords are for their arms budget. In light of such factors, Taylor argues that considerable advantages may be derived from focusing on business actors rather than states:

Like the Kimberly Process, or even UN sanctions, the Guidance seeks to exclude certain commodities from global trade flows. But there the similarity ends. Instead of obligating states, the Guidance places the responsibility on business to manage their supply chains. Instead of relying on a certification regime hobbled by a lack of state capacity, the Guidance deploys the concept of business due diligence, the practice of self-investigation and risk management in a business activity. And instead of targeting a commodity based on its association with rebel groups – a definition that has plagued the Kimberly Process, for example preventing it from taking action where abuses are committed by state armed forces, as in the case of Zimbabwe – the Guidance in effect focuses on the problems of conflict financing and human rights abuse associated with mineral extraction, regardless of whether the perpetrator is a state or non-state armed group.

In effect, the Guidance places the onus on businesses to show they are not financing conflict or contributing to human rights abuse through their sourcing of minerals. And nothing in the Guidance prevents states from regulating this responsibility to conduct due diligence, which is precisely what the US has done with the conflict minerals provision of Dodd-Frank, a measure the EU is now considering.

The combined reliance on traditional state regulation and more novel forms of corporate self-regulation is promising though not, as Taylor points out, unproblematic. However, even at this early stage, there may be timely lessons that could be drawn by the UN Food and Agricultural Organization (FAO) in its current efforts to develop a set of ‘demand side’ standards regulating the conduct of actors participating in large-scale land investments in developing countries. This process should be facilitated by the fact that the FAO has already launched a set of ‘supply side’ guidelines for countries that are the object of such investment. While the latter clearly addressed state authorities disposing over targeted land, the former will need to take into account the role of both state and powerful non-state actors whose investments are driving the global land-rush.

Finally, in a timely reminder that such policies and safeguards are often only as effective as the advocates that monitor their application, Inclusive Development International issued a press release announcing a complaint before the Asian Development Bank’s Compliance Review Panel. The complaint alleges a violation of the Bank’s involuntary settlement policies with regard to communities affected by an ADB-funded railway rehabilitation project in Cambodia (on which, see Natalie Bugalski’s guest postings here and here). As such, it recalls the ongoing controversy in Cambodia over the World Bank’s attempts to act on a finding by its own Inspection Panel of a violation of its Resettlement Policy.

Say it with a resolution: The UN marks two decades of work on internal displacement as new challenges emerge

by Rhodri C. Williams

I tend to count being slightly outside the Geneva loop as a net positive, but every once in a while it means that I get ambushed by major developments in my own field. This has been such a time, with the IDMC announcing the UN Human Rights Council’s adoption by consensus of a ‘historical resolution‘ on internal displacement. As much as I would love to deliver the inside dish on fledgling Resolution A/HRC/20/L.14′s existential significance, I must leave the honors to IDMC:

The substantive resolution is, for the first time, independent from the mandate of the Special Rapporteur on IDPs, representing a strengthened commitment from UN Member States to recognise their own role in promoting and protecting the human rights of IDPs.

So, it seems that the joint and several UN Rapporteurs on internal displacement have so successfully mainstreamed human rights-based approaches to the protection of internally displaced persons (IDPs) that the UN can promote them on its own. Good news considering the controversy that IDP advocacy efforts have occasionally sparked in the past (see Erin Mooney’s wonderful piece on the early IDP debates). However, I was taken aback to read an observation on the timing of the resolution in its preamble:

Welcoming the twentieth anniversary of the mandate of the Special Rapporteur on the human rights of internally displaced persons and the considerable results achieved since its creation,

A few things went through my mind at this point. One (facetiously) was that it was a bit cheeky of the Council to celebrate the mandate’s twentieth birthday by beginning to make it redundant. But the other was genuine disbelief that we have already been witness to two decades of IDP advocacy. Having started law school in 1996, the height of the post-Cold War, pre-9/11 human rights window, I was hardly present at the creation but had at least heard about it in real time.

What Rights? Comparing developing countries’ national legislation on community forest tenure rights

by Fernanda Almeida

Fernanda Almeida is the lead author of RRI’s “What Rights?” report and works as an international legal consultant on comparative legal, regulatory and policy research and analysis.

Indigenous Peoples and forest communities have long-established customary land rights to a large proportion of the world’s forests. The recognition of these rights by governments and international law and jurisprudence, has proven to be one of the few success stories in the wake of the Rio Earth Summit in 1992. Where these rights are recognized, Indigenous Peoples and other communities are not only able to enjoy their most fundamental human rights, but also to develop themselves sustainably.

For example, in the case of Amazonian traditional populations in the Extractive Reserve of Marajoí (Brazil), the açaí palm had virtually disappeared due to previous over-harvesting caused, at least in part, by unclear tenure. Once land tenure issues were resolved, traditional populations invested their resources in managing the açai area as a way to bring back wildlife, fish, and the açai palm itself. As a result, biodiversity was restored and the population had secured its means of subsistence.^[1]

In spite of the importance of such rights to the promotion of a sustainable development agenda, very little was known about the extent to which governments around the world had recognized them and how. The What Rights? report by the Rights and Resources Initiative begins to fill this gap. It analyzes national laws that relate to the forest tenure rights of indigenous peoples and communities in 27 developing countries, home to 2.2 billion rural people, that collectively contain about 75 percent of the forested land in all developing countries.[2]

Sustainable but inconvenient – Two more folkways slide closer to the edge

by Rhodri C. Williams

Two feature stories in BBC World help to remind us how we are our own worst enemies. In two very different parts of the world, as we all go about our daily business of accumulating exotic and unsustainable consumer goods and producing carbon and toxic garbage, two traditional, sustainable and harmonious ways of life are quietly being snuffed out by the forces of globalization and politics.

First, BBC reports on the fate of the nomadic reindeer herders of the Yamal peninsula in Siberia. Sound like the kind of implausible lifestyle that sensible people would have thrown over long ago for office jobs? Turns out they have been more stubborn than you might think:

The Economist on land and natural resources in Southeast Asia

by Rhodri C. Williams

The Economist has run a number of interesting pieces on housing, land and property (HLP) issues as well as natural resource disputes, in southeast Asia (readers be warned: the paywall arrangement now allows non-subscribers to view five articles for free every week, but I think the below pick just squeak in).

Beginning with Burma/Myanmar, a pair of articles from last week’s issue highlight the dark economic underbelly of the country’s current political reform process. A comment on the standoff over the opposition’s refusal to swear an oath to “safeguard” the current, military junta-installed constitution notes the risk that the political debate about the constitution may be a sideshow. Given that the reforms made so far have been enough to ease economic sanctions on Burma, and that the generals that have symbolically conceded political power continue to retain their economic interests, the Economist concludes that “all the boasts of political reform look less like a blueprint for democracy, and more like the generals’ pension plan.”

These concerns serve to reinforce earlier inferences (discussed here and here in TN) that a wave of dubious privatization that preceded the current round of political liberalization may have been intended to allow the military leaders of the country to cash in on their land and natural resource grabs. The extent of this rapaciousness is documented in a separate Economist article, which describes how the nearly feudal style of military occupation of the rebellious ethnic states in Myanmar has opened the door to both wholesale natural resource theft and drug trafficking:

On the back of its formal military role, the army has also built up a suffocating economic grip on the region. Across Myanmar, the national army has for years pursued a policy of “living off the land”. Battalions are obliged to become their own farmers and businessmen in order to feed themselves and pay their wages.

In my earlier comments on Burma (linked above), I raised the risk that liberalization could follow the same path as in Cambodia, where a neo-patrimonial regime has dangled the barest of fig leaves over its essentially predatory governance mode. The continuity of this tradition has been confirmed in this week’s Economist, which reports on the apparent killing by the Cambodian military of Chhut Vuthy, an activist against illegal logging who founded the Natural Resources Protection Group.

Remaining with Cambodia, it seems that what one does within one’s own borders is one thing, but that cross-border rapaciousness will not be tolerated. The Economist also reports this week that Cambodia has led fierce protests against a unilateral decision by Laos (cheered on by Thai construction interests) to begin construction of a massive dam on the Mekong River, despite a recommendation by a regional commission that further study on the downstream effects be undertaken.

Finally, HLP rights expert Daniel Fitzpatrick is quoted in an interesting report on East Timor. There, it seems the post-independence government succeeded to the ‘state land’ previously taken from smallholders by successive Portuguese and Indonesian occupiers, and is now facing a familiar dilemma. On one hand, justice requires some form of recognition of the claims of those previously dispossessed in the countryside. On the other hand, the lure of badly needed revenues from international concessions beckons.

Guest posting announcements and updates – Focus on Somalia, Colombia, Kosovo, Bolivia and Ecuador

First of all, I am very pleased to announce that repeat TN guest author and independent consultant Shane Quinn will shortly be providing some observations on recent proposals to stabilize Somalia by providing autonomy to its regions. I am also expecting follow-up pieces by Brookings collaborator Roberto Vidal on property issues in Colombia, and by legal aid team leader Massimo Moratti on property claims in Kosovo.

In the meantime, I also wanted to provide some follow-up on two recent guest-postings contributed by Nicholas Fromherz of the South American Law and Policy blog. First, Nicholas has provided an update to his earlier observations in TN on the controversy over plans to build a road through the TIPNIS nature reserve in Bolivia. Once again, it seems that the appearance of government restraint in the matter may be deceiving.

Second, a further comment on litigation over oil extraction-related damages in Bolivia by Chevron-associated law professor Doug Cassel on Opinio Juris – as well as the associated comments – highlight some of the key issues Nick raised in his guest-posting on the same topic – and its associated comments. Particularly interesting are questions related to tensions between the merits of the case and the behavior of the parties. However, Dr. Cassel also defends the engagement of human rights actors in favor of even big corporate plaintiffs like Chevron as necessary to demonstrate a level of consistency and impartiality necessary to convince such firms to sign onto voluntary human rights guidelines.

See Shane’s posting here:
- Local governance in Somalia – New emperor in old clothes? (18 April 2012)

 

An inconvenient forum: Thoughts on the Chevron-Ecuador Case

by Nicholas A. Fromherz

As a student of environmental law, resident of the Andes, and former clerk for two federal judges, I have followed the Chevron-Ecuador case with increasing interest—and, of late, increasing concern.  No matter which side we believe, it is clear that the people and ecology of Ecuador’s Lago Agrio region have been affected by the operations of Chevron (or, perhaps more accurately, those of predecessor Texaco and the state-owned Ecuadorian firm Petroecuador).

But that will always be the case with extractive industry—more important factors for purposes of litigation are to what extent and what, if anything, was done in the way of prevention and/or mitigation. This post will not attempt to answer those questions.  More informed individuals and groups have offered a range of answers as to these very points (see here and here), and my own speculation on the matter would only add to what has become a morass of conflicting information.

Instead of analyzing the merits of the case, I would like to discuss two issues that have received less than complete coverage: (1) the unintended and unlikely consequences of Chevron’s effort to remove the case from U.S. federal court on grounds of forum non conveniens; and (2) the institutional and socio-political factors that must be considered when analyzing Chevron’s claims of judicial corruption by the Ecuadorian courts.

Nicholas Fromherz to guest-post on the Chevron-Ecuador case

by Rhodri C. Williams

This being a blog on the legal aspect of conflicts over land and natural resources, it has become increasingly untenable to continue ignoring one of the most bitter and protracted such disputes of all time, namely the Chevron-Ecuador case. At the same time, given the numerous twists and turns this litigation has taken in its various phases, trying to catch up with it, let alone say something meaningful on it, seemed well beyond my faculties.

Based on the reading I have been able to do, I was also aware of the strong passions the case has raised. For instance, this overview in the New Yorker portrays the conflict as a battle of wills between two highly willful lawyers – in effect, the unstoppable victims’ advocate meets the immovable corporate defense attorney. Recent exchanges on Opinio Juris between contributor Kevin Jon Heller, on one hand, and Notre Dame professor Doug Cassell have similarly struggled to keep to the genteel conventions of non-dittohead neighborhoods of the blogosphere (see in particular this exchange in comments).

For all these reasons, I have been cautious in approaching the toxic debate about the toxic lawsuit over the toxic sludge of Lago Agrio. However, I am now all the more happy to be able to provide a forum to repeat TN guest and South American Law & Policy blog author Nicholas Fromherz, who will focus on the broader implications revealed by the case for parties to transnational litigation of all stripes.

Nick’s post has now been published as:
An inconvenient forum: Thoughts on the Chevron-Ecuador Case (30 March 2012)

The World Bank on ‘sleaze timber’

by Rhodri C. Williams

The BBC reported today on a new World Bank analysis of the scope and detrimental effects of illegal logging worldwide. There is of course no shortage of commentary on the challenges facing global forestry management and the consequences of failure to improve our performance. Just last month for instance, TN covered the latest report on the topic by Rights and Resources Initiative, which linked the failure to protect local forestry rights to the broader vulnerability of marginal communities to global patterns of large-scale investment in land and natural resources.

Nevertheless, the World Bank report does a neat job emphasizing the ties between illegal logging, corruption and chronic patterns of weak governance. In other words, the analysis supports a broadening in focus from the ‘blood diamond’ problem of natural resources supporting active conflict to a ‘sleaze timber’ (you read it first here!) emphasis on how natural resources can undermine the conditions for sustainable and equitable development. The report also does a good job foregrounding some fairly shocking statistics:

Every two seconds, an area of forest the size of a football field is clear-cut by illegal loggers around the globe.

The World Bank estimates that illegal logging in some countries accounts for as much as 90 percent of all logging and generates approximately US$10–15 billion annually in criminal proceeds.

Mostly controlled by organized crime, this money is untaxed and is used to pay corrupt government officials at all levels.

The report focuses on criminal justice means to track the income generated by illegal logging and prosecute those responsible. While such approaches are important in terms of both returning ill-gotten revenues and preventing further cutting, they are unlikely in the short term to be able to address the social and cultural devastation wrought where past cutting has erased the spiritual homes and economic resource base of indigenous peoples and subsistence farmers. While it would be good to see more serious efforts to end the enormous damage caused by illegal logging, it is not at all clear how much of it can actually be undone.

Investment-related conflict in South Sudan: contested rights and the power of information

by David Deng

David Deng is Research Director for the South Sudan Law Society. These observations were originally presented at “Turning Point: What future for people and resources? A panel on the trends shaping rural lands and lives” on February 1, 2012 at The Royal Society of London.

Introduction

The new report by Rights and Resources Initiative (RRI) paints a vivid picture of a world in flux and the various struggles that are emerging over wealth, power, and natural resources. I’d like to pick up on a couple of these themes and flesh them out a bit with examples from South Sudan, where I’ve worked for the past few years on several projects relating to land rights. Most recently, my work has touched on the surge in land-based investment after the 2005 peace agreement, which brought to an end the 22-year civil war between north and south in Sudan.

Investment and conflict

The first issue that I’d like to touch on is the complex relationship between investment and conflict in resource-rich states. I think it is fairly clear to us all that poorly planned investments can contribute to conflict, particularly in fragile, post-conflict states; but what is perhaps a little less obvious is how conflict can actually serve to attract certain types of investment.

Let me explain. Struggles over land and natural resources were among the root causes of the civil war in South Sudan. Foreign investments during this period often contributed to the violence. Oil companies colluded with the government in Khartoum to forcibly displace local populations from oil producing areas, in order to make the land available for oil exploration. Armed groups in South Sudan used local monopolies of violence to control cross-border trade in precious woods.

And in the Nuba Mountains along the border between north and south, where today, we hear reports of mass killings and hundreds of thousands of people at risk of conflict induced-famine, the government expropriated community lands and gave them to foreign and domestic elites in order to establish large-scale mechanized farms. The disregard that Khartoum showed for their community lands caused many Nuba to join the liberation movement in the south. What followed was a long and costly civil war that eventually resulted in the secession of South Sudan.

But with its newfound independence, South Sudan finds itself in a harsh new world. It has a population of only 8 or 9 million, spread across a land area more than twice the size of the UK, considerable supplies of oil and minerals, fertile land and water; all this makes South Sudan an attractive prize in a resource-strapped world.