Mining and oil companies as mediators?
Today I attended the London annual general meeting of one of the largest global mining companies, and I am writing this en route to South America where I will spend a week with staff from another. What makes them so interesting? Obviously there is something fascinating to the non-engineer about how engineers extract minerals from the ground, often from great depth, and then retrieve the elements they want – which are invisible to me – from the ore, and then market them halfway round the world. But beyond that, miners and oil drillers occupy a truly fascinating role in society as mediators. This is because by virtue of their business niche they mediate – on behalf of the rest of us, one might say – between interests and issues which are often in tension. In this way they symbolize our wish, in modern society, to have our cake and eat it. Perhaps they are a kind of Gollum – representing our wish for wealth and power (“the ring, my precious!”) and our simultaneous moral desire to be good. No wonder they get so much stick from different quarters. I will try to explain this briefly, in terms of three of these contradictions or tensions.
1. Local vs. national
Minerals sit on or under the ground (or seabed), somewhere. That somewhere is where God, the gods, or geology put them, depending on your point of view. So they are on one very basic level, local. But in our modern era of nation-states, they tend legally to belong to the “nation”, and are thus at the disposal of the state, on the nation’s behalf. In poorly governed nations, that makes them vulnerable to being seen as the patrimony of the ruling elite, rather than the population as a whole. While in democracies they are managed as national patrimony for the benefit of the nation as a whole. But in any case, democracy or no, there will always be a tension between the needs, interests, desires and beliefs of local populations in the area where minerals lie, and those of the nation as a whole. And even more so in colonial or post-colonial situations where there is an underlying tension between indigenous people and the colonial invaders or their descendants; or in nations where one particular indigenous group, region or class holds sway over others. Most often, this tension is expressed in terms of local populations wanting to hold onto the resource (perhaps by preventing it from being mined, perhaps by wanting greater ownership and control of the resource once mined). AGMs of mining companies always provide illustrations of this, when local representatives who have purchased a single share, use this as a licence to remonstrate against the company’s destruction of their environment or its failure to mine in ways they find acceptable. So miners and other diggers and drillers (for oil, gas, geothermal power, etc.) straddle the very difficult fault line between local communities and the state, and have to mediate between the competing interests of both.
This is difficult enough in democratically mature polities like the USA and UK, but that much harder of course in countries run by relatively unrepresentative governments, where many of the most important mineral deposits occur. Miners are forced to mediate between these competing interests – all the while trying to maximise their own primary interest, getting the best return on shareholder investments now and in the future.
2. Growth now vs sustainability
Where we humans love to have our cake and eat it, is inherent in the tension between sustainability and development. Phrases like “sustainable development” trip neatly off the political tongue. But when we are honest, we know that the kind of development we can most easily envisage perforce involves economic growth, and since the days of Newton if not before, we have known that economic growth of the kind we are familiar with is inherently unsustainable. This is because it involves using up natural resources at a faster rate than they can be replaced – and in many cases using up natural resources which simply cannot be replaced.
Our improved understanding of climate change has brought this into sharper focus, just at a time when billions of humans whose parents and grandparents were largely excluded from the proceeds of fast and unsustainable growth are obtaining access to them. We are now acutely conscious that we are moving towards a cliff-edge in a headlong rush that we don’t seem to know how to stop.
Enter the mining and oil companies, whom we have charged with the task of helpfully providing many of the irreplaceable raw materials we need, to take us over the cliff: oil, gas, coal, iron, copper, potash and the like. Oh! how we want them to provide these materials as cheaply as possible – witness the current political non-debate over energy prices in the UK, or over carbon pricing in Australia; oh! how we want an above-average return on our shares; and oh! how we love to castigate the same mining and oil companies for destroying the environment and pushing us over that cliff….
So once again the very same companies find themselves caught in the midst of a schizophrenic debate between people who want to keep their cake while stuffing their faces with it, and thus mediating between our two Gollums. This is because governments and intergovernmental organisations seem incapable of doing so – not least because we don’t really want them to. This tension was illustrated at the AGM of BHP Billiton today, where a thoughtful climate activist named Ian Dunlop had put himself forward for election to the company’s Board, citing the need for a better understanding and commitment on climate change issues by directors of this huge company, whose portfolio includes energy and coking coal, oil and gas. Needless to say, he stood no chance of being adopted as a director by the company’s investors – who like most other investors have not yet really begun to factor the costs of climate change into their short-termist investment plans.
3. Resource nationalism vs market pragmatism
And then there is the fundamental tension between the desire of governments in mineral-rich countries to get the minerals to market as effectively and efficiently as possible, and their demand to have as much control and income as possible. This tension is most obvious where the minerals are technically difficult to extract – e.g. the North Sea – or in under-developed countries with inadequate skills and infrastructure which impede progress. In both cases, governments are tempted to overplay their hand – trying to extract a greater proportion of revenues than well-run companies can often stand; and sometimes good companies which would have produced a reliable flow of income from well-run mines and wells are displaced in favour of less principled operators who promise more, but end up delivering less and in ways which are more detrimental to the environment and society.
Most often though, the company and the government remain in uneasy “partnerships”, and the ineptitude of governments leaves the company in the unenviable position of having to mediate between the government’s competing desires.
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There are many other tensions integral to the extractive industries which I could cite. The most obvious one perhaps is between the need for good stewardship of mineral resource and the urgent need for funds. Minerals can only be dug up once, and despite recycling, can really only be sold once by the nation which owns them.
Prudent stewards of this patrimony would husband this resource very carefully, and avoid using royalty receipts to fund recurrent expenditure. They would treat mineral revenues as scarce capital, to be invested in projects which capitalise society – infrastructure, education, governance improvements, etc. But outside Norway and perhaps Alaska, this approach is all too rare: governments find it all-too difficult to resist the temptation to use royalties as just another form of tax income, thus creating unsustainable expenditure patterns and buying favour unsustainably with the electorate – or with “clients” in a patronage-based political system. But although mining companies need to be aware of this tension, they are less likely to be in a position of straddling the fault lines and mediating between the opposing interests, as they so often are in the three examples above.
Given all the above, it is no great surprise that mining and drilling are so controversial. They encapsulate all too neatly the contradictions and opposing forces in modern society. Perhaps there will always be a Gollum, and society will always find ways to project its Gollum on someone else. Perhaps we should cut miners some slack. No, wait, perhaps we should close those evil drillers and diggers down! But more seriously, what this means in practical terms is the need for the staff of miners and drillers to be thick-skinned, but above all principled, politically savvy and – well – good at mediation, I guess.
Surprising Results from the World Bank?
A few days ago I posted an article about the good progress being made by the World Bank, coming to terms with the difficulties inherent in supporting the right kind of progress in what the Bank calls Fragile and Conflict-affected Situations (FCS). I highlighted not only the good signs, but also some of challenges faced. On the same day Joel Hellman, the enlightened Director of the Bank’s Center on Conflict, Security and Development (CCSD) – the unit charged with supporting implementation of the 2011 World Development Report on the same theme – published a fascinating blog post, Surprising Results from Fragile States.
While my article was based on my impressions as an outsider, Joel’s was an insider’s empirically based comment on the interesting phenomenon that some of the Bank’s projects in FCS appear lately to have been more successful than those elsewhere. One of the comments added to Joel’s blog by a reader, notes that DFID has had similar findings. This seems to run counter to the received wisdom that development is harder in such contexts. So what is the explanation?
Joel identifies four hypotheses: projects in FCS are seen as “harder” so they are getting more time and attention; projects in FCS are simpler and smaller than projects elsewhere, so more feasible, because the level of ambition tends to be lower; project implementation is done differently in FCS, notably projects are often implemented more independently of the client government and its systems, so less entangled; and finally, that projects in FCS are evaluated to a different (lower) set of standards than projects elsewhere. Joel’s final point is that we need to find out more, and that his four hypotheses are a starting point for more debate and research.
This is an excellent example of the role of the CCSD in the Bank – leading and stimulating debate on critical issues linked to FCS. In his article Joel wonders aloud whether the Bank is implementing the right projects well in FCS, or simply implementing projects well. This is a critical point. It has been said many times over the years that all organisations are in some respects a hammer seeking a nail, i.e. they know what they do well and they seek opportunities to do it well. In my own criticism of the Bank and other international development organisations over the years I have used this metaphor many times. (Though to be fair, I have also consistently used it about the NGOs I have worked for too.)
The 2011 WDR, the establishment of the CCSD and aspects of its ongoing reforms all point to a recognition within the Bank of its need to adapt, to work more effectively in FCS. But it would be extremely worrying if this adaptation were to become an exercise in discovering the answer to the question “what can the Bank as we know it today, or with minor tweaks, do differently in FCS?” In other words, if the Bank adapts organically to accommodate fragility, as Joel’s hypotheses allow as one explanation for the phenomenon he describes.
The correct question is surely a different one, along the lines of “in what ways can fragility be reduced in FCS; in what ways can this be stimulated by international institutions; and is there a role in this process that the Bank could usefully play?” In other words, what tools, other than the hammer, are needed; which of these might the Bank learn how to use; and what internal changes would be needed to enable this? One of the themes of the Bank’s reform strategy is to become more of a “connector” than an implementor, and this seems very appropriate in the face of the many of the challenges in promoting resilience in FCS. After all, the Bank as an economic institution knows very well that it should only intervene when it has a competitive advantage vis as vis the outcomes which are desired. So in its quasi-monopoly position it needs to step aside with honesty and humility when it does not have such an advantage – since there are few other institutions which can outcompete it in the market.
This also has implications for the way the Bank describes and measures success. One of the next items in its ongoing reform process is the review of its measurement systems. As my colleagues at International Alert have written, all the Bank’s measurement systems – e.g. the Post-Conflict Performance Indicators framework (PCPI), IDA Results Measurement System and Scorecards – all need to be updated to reflect the latest thinking on reducing fragility and increasing resilience. I suspect Joel is right, that part of the explanation for better results in FCS is an organic moving of the goalposts – after all, that would only be human and the Bank is essentially a large collection of humans, despite what some of its critics sometimes say! It’s tremendously important that the Bank focuses very carefully over the next few months in making sure that its scorecards integrate fragility and resilience as mainstream factors – and not just for the obvious “Fragile States” because, after all, recent events have shown us that plenty of countries not previously listed as fragile (Egypt, Syria, Mali…) lacked sufficient resilience to avoid major outbreaks of violence. The scorecards need to reflect the goals and progress towards the goals, and the eradication of poverty and increasingly shared prosperity are only going to be sustainable if resilience is increased in FCS. So the scorecards need to reflect progress in that.
The World Bank: how is it doing?
Last week I spent some time in Washington D.C., on the fringes of the World Bank/IMF autumn meetings. I was discussing International Alert’s recommendations for making the next round of the Bank’s International Development Association (IDA 17) funding as effective as possible in the fragile and conflict-affected countries which make up an increasing proportion of the IDA caseload. From what cab drivers told me, the autumn meeting came at an opportune time, since the impasse over the US federal budget has limited tourism and official travel considerably, hence is having an impact on their incomes. Given many D.C. cab drivers are originally from places like Pakistan, Ethiopia and Somalia and frequently send money there, this will be having an impact on the livelihoods of their relatives back home.
But the Bank is also supposed to have an impact on poverty and development in more direct ways, and for years there have been voices saying it is out of date. International Alert where I work has long been calling on the Bank to up its game in fragile contexts, where in the past it has sometimes inadvertently undermined good governance and therefore peace. Based on my impressions during this visit I was quite inspired by some of the Bank’s new thinking; but not enough entirely to undermine my scepticism that such a huge institution is really the best mechanism for transferring resources from wealthy to poorer countries.
On the plus side of the balance sheet the Bank has adopted – for the first time, a senior Bank official said – clear high-level goals against which to judge its options:
- End extreme income poverty &
- Promote shared prosperity with a focus on the bottom 40% by income, in each country
… both of these to be achieved with a view to their social and environmental sustainability.
It has also developed a three-part strategy to achieve these goals, viz.
- Work with client governments to identify and focus clearly on the 2-3 most important factors inhibiting progress towards the goals, in each country
- Marshall the World bank Group’s resources and departments much more effectively – “working as one World Bank Group”
- Maximise development impact through partnerships.
This new strategy, under the leadership of Bank President Jim Yong Kim, has created a palpable buzz among staff and others. Meanwhile, other encouraging elements of the Bank’s current reforms include:
- Official recognition, since the landmark publication of the 2011 World Development Report on Conflict, Security and Development, of the need to work differently in what the Bank calls Fragile and Conflict Affected Situations (FCS), and that this means adopting very different approaches – including a different approach to risk and an understanding that programmes in FCS cost more, are slower, and should be designed specifically to help reduce fragility and increase reslience
- The establishment of the Center for Conflict, Security & Development which is shepherding the Bank through some of the conceptual and operational changes it needs to make in FCS, through planned changes in its results and success indicators, staffing and capacity, incentives, risk appreciation, operational systems, funding and support instruments, and relationships
- Recognising the need to enhance citizen participation in governance, and that the kind of infrastructure projects the Bank often supports provide opportunities to do this, by involving people in project planning, implementation and evaluation through what the Bank calls “social accountability” mechanisms. The Bank has persuaded 32 countries to joint the Global Partnership for Social Accountability which means, in its own words, that part participating governments have thus “allowed the Bank to give grants to civil society organisations in their country, to hold them to account”.
- A recognition – I would not call it humility, yet – that the Bank may not be better placed than others to help provide solutions, and that its optimal role may be as a connector rather than a provider
- The announcement of $400m in savings, to remove some of the fat that has accumulated over the years
- A plan to rejig the Bank’s standard country office organogram, to minimise the perverse incentives which currently mean that country programmes tend to avoid innovation and stick instead to what they already know
I had conversations with people at a variety of levels and roles in the Bank, and found myself encouraged by their account of these and other changes. Including an Executive Director (ED) – one of the people to whom Jim Yong Kim reports, in principle – who shocked me (in a good way!) by saying that one of the things she was asking for was more honesty from Bank staff about the challenges inherent in client government policies, attitudes and practices – something which is difficult when a staff member is drafting a document which the client government will read. Alert has been calliing for “a more honest conversation about development” for years, so it was good to hear someone at the very heart of the development establishment saying the same.
All this is encouraging, but….
… there were also plenty of reminders that the Bank is a resilient institution which is by nature conservative and resistant to change. The very same ED who was so enlightened and enlightening about the need for honesty also said that the Bank should limit its focus to what it already does well – surely at odds with the idea of the revolution in Bank approaches which is being talked up publicly. And I also heard senior officials repeat publicly that the Bank is not and must not be political. Again, how to square this with its highly political role in providing cheap dollars to imperfect governments, and to its avowed intent to support citizens to hold their governments to account.
I know from International Alert’s work with some Bank country programmes that they are beginning to adopt or try out new ways of working in FCS: in Kyrgyzstan and the Democratic Republic of Congo, for example. But convincing examples were given by some people at the D.C. meetings of a continued sense of resistance to change: of strategic suggestions not taken on board by country teams because of old ways of thinking; and of civil society consultations held but then ignored. I can’t vouch for these but I am not surprised.
I was also slightly concerned that so much of the focus of the new Bank strategy (one out of three strategic areas of emphasis – or potentially 33% of strategic effort) is on itself, “working as one WBG”. I remember when Koffi Anan came in as SG at the UN, and told the UN agencies to work better together. For the next few years they spent an enormous amount of their time on “working together”, to the extent that one often felt they had forgotten whose lives they were supposed to be helping improve.
I also find it hard – very hard indeed – to picture the World Bank “amplifying citizens’ voices”. Not because I doubt the logic and the sincerity of the idea, but because such work is so incredibly subtle, and the Bank is – by its nature – so ham-fisted because it’s so damned huge. Civic society work is surgical; it requires a surgeon’s deft touch, her responsiveness to unexpected events, and her sharp array of tools. This will be hard, and will require some massive shifts in the power dynamics within the institution – to rebalance the power of economics, engineering and the classic social sectors – in favour of governance and other societal factors.
Ultimately the most difficult element of the reforms is about the Bank’s relationship to its clients: to the often not very legitimate or citizen-responsive governments which it advises and to which it lends money. This is what the ED quoted above was partly referring to when she spoke of the need for – and difficulty of – honesty. Figuring out how to manage its relationships with clients more adeptly is one of the institution’s biggest challenges, especially in FCS as outlined in International Alert’s 2011 report Peacebuilding, the World Bank and the UN. No government represents its people’s interests perfectly, but this is a particular problem in fragile situations, where democracy may be nascent or absent; so how can the Bank ensure its programming choices are the right ones? This challenge requires political skills of the highest order.
Reformers in the Bank – and those around it with a voice – need to keep their feet on the gas pedal of change for some time to come, and I am tempted to suggest in doing so that they focus on:
- Leadership: continuing to promote and model the kinds of changes which are being made, from Kim Yong Jim on down
- Decision-making: decentralizing decision-making as far as possible down the line, mainly to country offices, and holding them to account for discarding some of the useless practices for which people still get promoted, and adopting new ways of working in line with the new bank strategy
- Staffing: broadening the mix of skills to be fit for the Bank’s purpose of today, by enhancing economic, financial and project management expertise with softer, anthropological and political skills and talents at all levels
- Accountability: identifying and using the right scorecard indicators – both generic and context-specific – to guide Bank staff in the complex work of reducing fragility and improving resilience in FCS.
The Bank’s senior staff are presenting their new strategy as a revolution, not an evolution. They are right to do so, because the Bank is in danger of becoming irrelevant, 70 years after it was established, and their reforms are the minimum which is needed to bring it up to date. Because of this, and because of the innate resilience and resistance of the Bank to change, I am tempted to recall what Lenin once forcefully pointed out, that you can’t have a revolution without firing squads. Those charged with changing the Bank have difficult task on their hands: needing to change approaches by their shareholders, client governments and staff. They have the most control of the last of these, and may need metaphorically to shoot a few of them (if I may be permitted to mix my historical references) “pour encourager les autres….”
Syria: a welcome pause in Washington
Welcome news, apparently, in Obama’s announcement today to postpone his decision about how to respond to the chemical attack in Damascus. Because there is no sense in firing a barrage of missiles as a response to the use of chemicals. Perhaps Obama’s reason was his not wanting to be in Russia next week during or just after a US-led attack on Russia’s ally. Perhaps he was given pause by the UK Commons vote on Friday. Or perhaps he is not so stupid after all, and has listened to wise counsel.
Commentators have been saying how complex this question is. Regarding Syria, they are right. It is a horrendous situation in which there no easy choices, for Syrians and Syrian families, and for governments around the world. If we are honest, there are no easy answers for Assad either: even if he wanted to step down, the aftermath would likely not be a humanitarian picnic for many Syrians. And I doubt, frankly, he has enough authority to be allowed to step down, even if he wanted to.
But in terms of how Obama might respond to what was clearly a war crime, there are at least some aspects which are much less complicated. Three fairly obvious factors Obama might take into account:
1. It’s a war crime. Crimes are not punished by lynchings or retributive, or simply demonstrative missile attacks, but by due process. Sometimes that takes a while. You build the rule of law by following the rule of law. Have patience – after all, there’s no massive call from US voters to intervene militarily now.
2. Attacking one side in a war means you are taking sides. Even a child knows that from the school playground. Either choose a side and support it, or fire an equal or proportional number of missiles at both/all sides. Don’t pretend that you can weigh in against the regime, doing significant damage to its military capability, without having some impact on the course of the war. Or if that is really what you plan to do, don’t pretend it’s a genuinely meaningful attack. You can’t have it both ways.
3. This looks like a civil war that is going to last a long time. Lahkdar Brahimi, the UN Secretary General’s Special Representative for Syria, says he is reconsidering whether there is any point or value in his post; that he has no plans currently to go to Syria. He is said to be briefing that he sees no likely openings for a peace process in the short term. If the war is going to last a long time, the international community should recognise its unfortunate inability to pull off some kind of peace in the short term. But it should stop wringing its hands, keep working towards a medium term solution, and above all focus on limiting the wider impact of the Syrian war (which is already worrying enough in terms of increased violence in Lebanon and Iraq, and instability more widely). Despite the understandable emotional response to the terrible crime that was committed in Damascus with the use of chemical weapons, and especially against children and other non-combatants, geo-political decisions must be based on cold-hearted analysis, underpinned by principles and values, not on passion and certainly not on a sense of disempowerment and frustration. Minimising regional spillovers – which are surely just what Al Qaeda most wants to happen – has to be more important than an immediate retributive, corrective or simply demonstrative response to the fact that the Assad regime crossed a “red line” (which it anyway crossed several months ago, and nothing was done then, so why now?)
Behind all this there is a much more difficult debate about responsibility and the “responsibility to protect” – which is complicated. Poor people are dying in the USA because they have no access to jobs or health care, and this arguably contravenes the Universal Declaration of Human Rights. Should the international community intervene? Of course not, but I use this example to show how much more nuanced and complex things are, than they seem when expressed via the rhetorical devices deployed by the likes of Kerry and Cameron over the past few days.
Assad and others must surely pay the price one day for the crimes they have committed. Let’s aim to use due process to hold them to account. In the meantime, the international community must continue to seek ways to bring this war to an end in ways which minimise the suffering of Syrians, and minimise the impact on other people in the region.
Leadership for change
The international development sector has evolved positively, though the process of “development” is still pretty mysterious. Different international NGOs contribute in different ways, but are too often constrained by the need to turn development into over-simplified projects in order to obtain funds. With projects comes the need for bureaucratic systems which often end up driving the way NGOs function, even when they have other unrestricted funding which doesn’t need to be projectised. One of the key drivers of development is leadership, support to which is hard to projectise, and hence gets insufficient attention. So perhaps this is the kind of thing that international philanthropists like Mo Ibrahim, Bill Gates and George Soros ought to support. In this article I suggest a way they could do so. It might only cost them $3m per year, or they could endow it in perpetuity for twenty times that amount.
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The nature of “international development” is evolving, as ever. The 2011 World Development Report, the International Dialogue on Peacebuilding and Statebuilding, the debate about what will follow the Millennium Development Goals post-2015 – these and other documents and processes in the global discourse reflect the (more important) changed practical approaches on the ground which illustrate that “development” policy and projects are resolutely more sophisticated and political than they used to be. When I first worked for an international development organisation, I planted Acacia trees innocently in the drylands of eastern Sudan. Honestly, most of them likely died and not much difference was probably made in people’s lives over the long term, although we employed several hundred people, thus improved their incomes for a while. Nearly thirty years on, the international organisation I now work for conducts advocacy on how shadowy economic practices can be reformed in support of sustainable peace, facilitates dialogue among politicians, and helps the process of reconciliation and healing in post-conflict societies. International NGOs have certainly evolved.
International organisations help facilitate change in developing countries in many different ways: building clinics, training teachers, adding to civil society capacity, monitoring and witnessing human rights, to name just a few. One can criticise or praise any or all of their approaches depending on one’s point of view. But given the absence of any proven path to development, there are no empirical grounds for saying that this or that is absolutely the right or wrong way to go about it, at least not generically. So provided the right permissions and support have been given by the authorities and more broadly within the society where they work, and they adhere to certain basic principles and values, there’s legitimately a fairly broad and deep “ecology” of international organisations, each with its niche, all working to promote what they see as progress.
It is genuinely hard to hold them to account for their contribution to progress writ large, because such progress is non-linear in nature, and is virtually impossible to track and verify at a societal level, at least not within short time frames. But one can at least ask them to explain their rationale very clearly, and hold them to account for having an approach which is congruent with their own particular explanation of how development progress happens. Each should also have a convincing account of why its particular approach is the right one to support and engage with.
To take a simple example: an organisation which builds schools needs to have a convincing explanation of a) how school building contributes to progress in the contexts where it operates, and b) why building schools represents a good investment compared with other options. Similarly for organisations investing in health care, agricultural skills, vocational training, peacebuilding, and so on.
Explaining what we mean by progress
My personal explanation for how progress towards a better society probably happens is explained in detail elsewhere. Suffice it here to say that I see it as a combination of interrelated and largely organic processes which between them lead to a fairer, safer, more democratic society in which prosperity is widely shared, people have the wherewithal to live a decent life, and differences are resolved without violence.
Without being certain, but with a fair degree of confidence, I’d say the factors and processes likely to contribute to this kind of development include an educated population with increasing confidence and voice, creativity and initiative; the application of the rule of law to an ever-widening circle of people; increasing social mobility; a growing economy in which a growing share of the population participates; an increasingly dynamic civil society which brings together people across ethnic and other social divides in pursuit of common enterprise; increasing control of violence by increasingly accountable institutions of state; and the evolution of broadly supported values and institutions which underpin all these factors and processes.
I work for International Alert, which unusually among international NGOs (INGOs) stitched its heart to its sleeve several years ago by publishing its programming framework. This sets out Alert’s philosophy of what a better society looks like, and explains how its work aims to contribute to peace and prosperity in fragile and conflict-affected countries. Alert’s explanation is close to my own, and even though I can’t guarantee that we are helping people make progress towards the kind of society we describe, we can at least be held accountable by others for following approaches which match our publicly declared theories of change.
The perversity of projects
One thing I know I share with others working for INGOs is the frustration that comes with funding. We obviously need funding for our work, but acquiring it leads us perforce to create the bureaucracy needed to manage, report on and be good stewards of the resources entrusted to us. Because so much funding is provided in the form of support to projects, we are also more or less compelled to adopt a way of working constructed around projects. What this means is we chop our work up into bite-sized chunks which can be “purchased” by institutional donors like the UK Department for International Development (DFID), the US Agency for International Development (USAID), the EU, the UN, etc., and managed and implemented discretely. These institutions thus become our clients or customers, even though they in no way represent the people whose lives we aim to benefit. (This creates a strange situation in which we are accountable to rich country taxpayers, rather than to the people for whom we work. But this has been much written about and I won’t pursue it further here.)
Another pernicious effect of project funding is that it pushes us to create artificial narratives of development progress, in terms which can be counted, tracked and measured in the short term. Andrew Natsios has written eloquently about this phenomenon and I recommend his essay The Rise of the Counter Bureaucracy, which explains how funding arrangements skew development programmes away from what is most effective towards what is most “countable”. Civil servants approving project funding are placed in a difficult position: they are obliged to oblige NGOs to present their work in two to five year chunks replete with predictable activity budgets – construction, training, etc., etc., etc…. – because this gives them the data they need to report to their ministers, and which their ministers need in their turn to report to parliament… So when looked at from afar, much of the international development sector resembles a massive flotilla of projects, each sailing along at its own speed and in its own direction. Most projects are at least partly successful on their own terms, but what does it all add up to? Meanwhile, large amounts of time, energy and other resources are expended on the design, launching, navigation, tracking and maintenance of all these boats. And perversely, once organisations develop the systems and culture of projects, they even use them to allocate their scarce “unrestricted” funds – the money they raise for general purposes, the donors of which don’t require it to be projectised at all.
Leadership
Many of the obstacles to development are structural in nature, which is merely a jargon way of saying they are hard to change. One of the things needed to shift them is leadership. Leaders – at whatever level in society – are people who stand up and take a risk for their vision of change (or sometimes, to prevent change.) Not all leaders are good people with the right vision, of course. But leaders with vision, a commitment to the right kind of values and progress, and the ability to bring others with them, are surely one of the overlooked factors and drivers of development progress in their societies.
When I look back over my career in international development and peacebuilding since 1985, it is often such individuals who stand out: the villager who galvanised his fatalistic community to restore the orchards which had been devastated by drought; the father of an abducted girl who shamed NGOs into adopting a more courageous approach; women who have stood up to warlords; the girl who persuaded her mother and other mothers in the community to protect their daughters better; the HIV-positive activist who mobilised a movement demanding changed government and societal responses to the epidemic; the two students who took it upon themselves to create accessible learning materials for science students across the country; the civil society leader who persuaded and pushed political leaders to become more transparent, and was shot; the streetfighters who stopped fighting one another and reached across their religious and ethnic differences to bring peace and collaboration to their city; and so the list goes on…
It’s a high gain venture when it works, supporting women and men with the capacity to influence their society and its prospects for peace and prosperity in a seminal way. Even the best leaders can use some support. But it is very hard to obtain project funding for “providing support to leaders”. First, it’s not one of the categories overseas aid departments, ministers and parliaments readily recognise or know how to count, and secondly it’s an unpredictable game at best, so any support provided is a high risk venture.
My pitch to Mo, George or Bill
Given the frustrations of project funding, I sometimes imagine that I am trapped in a lift with Mo Ibrahim, George Soros or Bill Gates, who asks my advice on how to spend his money in support of international development. In such an instance I’d tell him of the imaginary international NGO, let’s call it Leaders 4 Change (L4C). It has a clear, simple and narrow remit:
To identify and provide catalytic support to leaders in civil society, in fragile, underdeveloped countries.
It only operates in a limited number of countries, taking a long-term approach over many years in each. Let’s say a maximum of ten countries at a time.
By providing tailored support and assistance to the right people, it helps them bring about the kinds of changes which kindle progress in their societies – e.g. changes in political discourse, high leverage policies, and political culture. L4C draws on its international, non-parochial reach and knowledge to provide them with solidarity and disinterested advice. It also provides them with small grants for learning, travel, etc., to expose them to ideas and skills. And it brings them together with others in similar circumstances from whom they can learn and on whose advice they can draw.
In each country, it has only two staff: a creative, analytical political activitist-facilitator – let’s call him or her the Catalyser – and an administrator-logistician providing support. Catalysers are not normally nationals of the country in which they operate, to help ensure their objectivity and independence – and to protect them from harassment. They are rare individuals with integrity, political acumen, empathy, humility, a generalist mindset and a talent for political economy analysis, strategy, and entrepreneurial activism. From a combination of theory and their own experiences (and what they learn with and from L4C colleagues), they have a good sense of how societal change occurs. Thanks to Mo (or George, or Bill) they do not have to be bureaucrats or fund-raisers. They sign up for at least 5 years, to make sure they have enough time to understand the context, an appropriate strategy, identify and build relationships with appropriate partners, and to make a difference. Their role is to develop a strategic country analysis for L4C, and based on that to engage influentially in civil society to encourage and contribute to debate and action. Each strategy is tailored to the context, seeking high leverage changes, with indicators for measuring progress and impact. These strategies might include for example the kinds of things I identified above: promoting an increase in the circle of people and/or issues covered by the rule of law; imbuing parts of the education system with a culture of creativity and initiative; increasing transparency in governance; reaching across ethnic, gender or caste lines; or working with parents to help their sons learn non-violent approaches to conflict.
A key part of the methodology is what I call loitering with strategic intent. This means knowing more or less what kinds of opportunities you seek, and hanging around the kinds of situations where they might occur, thus being ready to create, seize and exploit them. It means engaging in civil society, not just supporting or “strengthening” it (a common jargon of INGO projects). Needless to say perhaps, loitering with strategic intent is hard to fund through projects.
The catalyser identifies key leaders and potential leaders in civil society, and finds creative ways to support them. They might be NGO leaders, religious leaders, young politicians, who could benefit from small catalytic support. L4C develops personal relationships with them and gradually identifies ways to support them, e.g. by strategic advice and accompaniment, matching them with mentors (perhaps abroad), providing other learning opportunities, or providing small grants training to try out their ideas.
Catalysers are expected to fail from time to time – perhaps by choosing the wrong leaders to support (you have a kiss a few frogs before you find your prince), perhaps occasionally ruffling a few political feathers.
Like its country offices, L4C’s head office is also small, consisting of a CEO, a head of finance, an administrator-logistician and the occasional intern or two. Two country programmes are the subject of external, independent reviews each year (so every programme is reviewed every five years). These are shared across the organisation to ensure lessons are learned. The CEO also visits every operating country at least once every two years to monitor, advise, and learn. S/he works with colleagues and partners to publish a major report every two years based on lessons learned, sharing important ideas and knowledge about societal change processes. These are widely disseminated among NGOs, donors, etc. and their publication is looked forward to by those in the know. Finally, a small board of international trustees drawn from civil society, academia, government and business provides oversight and governance, and commissions a thorough annual external audit.
This L4C does not exist of course, but if it did it would have to be funded through endowments, and no project fundraising would be allowed. Assuming a programme covering ten countries, at a rough estimate this would cost less than $3 m per year, which at a 5% average rate needs a modest perpetual endowment of less than $60m. What do you think, Mo, Bill and George?
Is overseas aid an instrument of soft power?
I was giving evidence to a UK House of Lords select committee on aid as an instrument of soft power yesterday, so spent a bit of time researching what “soft power” actually means. It turns out it’s not just a fancy word for “influence” – though you probably knew that already – but rather Joseph Nye’s rather precise definition of how to achieve one’s objectives through attraction and co-option, alongside or instead of other means such as coercion and purchase. For Nye, foreign aid is purchase power, and as such not strictly a soft power tool. Was he right?
It’s rather hard to examine power in the abstract, as it can only really be measured in relation to a specific policy goal or objective. The UK’s Department for International Development (DFID) is mandated to reduce poverty overseas – a difficult but relatively narrow purpose. But if you look at the work of DFID, other UK government departments, the EU of which the UK is a leading member state, other international organisations of which it’s a member, and other UK-based organs such as NGOs and businesses, it is not a great stretch to argue that one of the UK’s international policy goals is an increasingly and sustainably prosperous, peaceful and liberal world. If such an unwritten goal does exist for the UK – and I believe it does – then it would ultimately be good for business, good for reduced defence spending, good for the achievement of globally shared public goods such as atmospheric carbon reduction, and good from a moral perspective as well.
So the debate about whether aid is an effective soft power instrument comes down ultimately to a debate about whether aid can legitimately be seen as soft power (rather than “purchasing” power as Nye would have it), and whether it actually does help create a better world.
After spending a couple of hours debating this issue with some well-informed and often incisive members of the Select Committee and three fellow “witnesses” (Jonathan Glennie, Ian Birrell and Mark Pyman) it seemed to me fairly clear that:
- If the currency of soft power is values, institutions, culture and policy, then soft power is exercised by the choices you make and the actions you take, not by what you say
- By allocating a chunk of the government budget to overseas aid – along with substantial amounts of private giving by UK citizens – we are sending a message of international solidarity that presumably does increase the UK’s stock of capital internationally, and thus its soft power to influence the directions and nature of progress. E.g. the reason the UK was asked to co-chair the recent UN High Level Panel on Post-2015 was because of our prominent role in aid and our commitment to spend 0.7% of GNI as aid
- As a relatively prosperous, liberal, democratic and (dare I say it?) peaceful nation, the UK has much to offer a world wishing to evolve in those directions – i.e. it offers models from which others can draw ideas for their own political and economic evolution – while hopefully avoiding some of our errors
- Incremental improvements towards peace, prosperity and liberal democracy are non-linear and as such cannot be “bought” or coerced. So if aid is an instrument of power and influence it is at least partly a soft power instrument. But this also means we should avoid focusing the discussion on “aid” or money, and rather think about how the UK’s engagement taken as a whole, helps to create a more peaceful, prosperous and democratic world, including, e.g.:
- Eliminating the money laundering and other nefarious financial practices which are still done in the UK
- Contributing to improving international frameworks and systems for supra-national governance
- Improve the regulation of UK-listed businesses operating in developing contexts, so their behaviours contribute to the right kind of progress there
- Working in partnerships with those in developing countries – governments, businesses, civil society – as well as others who have the capacity to influence outcomes there
- Rather than limiting the discussion to the “UK’s soft power”, we should see it as an issue of “using soft power as part of an international approach to progress”, i.e. not to improve the UK’s standing, as some of the committee members put it, but rather to use the UK’s standing in collaboration with others, to contribute to progress in the wider world
- We need to recognise that progress towards a more democratic, peaceful and sustainably prosperous world is non-linear, and is by no means assured or even probable; it needs a long and sustained contribution at multiple levels, and to some extent remains an article of faith because the evidence or metrics are not yet available– we won’t be able to judge success for some years yet…
- … But that uncertainty seems a risk worth taking, provided we exercise all due diligence and care in the choices we make, and monitor and adapt our approaches as we go. Perhaps, if I am right in elucidating from its various actions that the UK has an unwritten goal of contributing to an increasingly and sustainably prosperous, peaceful and democratic world, then it is time the government makes that a more explicit policy goal against which it can test its policies, and to which it can be held to account.
Why young people are so critical to peace?
In conversations last week about youth and peacebuilding, it occurred to me again that we too easily fudge things by referring to “youth”. Unless we qualify “youth” with a narrower description, we risk being vague and patronising; and by our imprecision to lose the meaning of what we intend to say. Especially given that more than half the world’s population probably fit the category, one way or another.
It’s really important that we say which young people we mean in policies and projects, so that resources are targeted. I’ve written before about how DDR programmes for young ex-combatants often fail to target the right young people, ending up helping those who are easiest to assist – and who probably need help the least.
It also set me to wondering about why it’s so important to work with young people. Three generic reasons come to mind.
First, young people have always been seen as a potentially destabilising influence, a risky group. As the truism goes, we invented wars to give young men something to do so they don’t undermine the order of things. In their elders’ eyes, young people are forever at risk of doing the wrong thing: making friends with and making love to the “wrong people”; fighting with the wrong people; getting or making people pregnant when they oughtn’t to; breaking rules whose purpose they just don’t understand; trying to get their hands on resources before they are ready, not knowing their place…
Less dramatically, societies are surely organised so that young people are kept in their place until there is room for them to play a larger role, and until they have been sufficiently integrated and propagandized so they know the particular version of right and wrong which the older generation feel makes their society tick? And thus by the time they become influential in their family and society, by the time they get their hands on the family’s land or other resources, they are committed to using their new-found influence in line with the way their parents would have done.
Second, “young people are the future”, not just in the clichéd sense of Hollywood or Whitney Houston, but in the very genuine sense that the future of “our” society, “our” family, “our” values, can only be continued through the next generation. Hence older people feel the need to indoctrinate young people in their view of the world, their sense of right and wrong. Because older people – and I’m writing as one myself, so I can say it – lack imagination and imaginative energy, we tend to indoctrinate young people as we were indoctrinated when we were young. Hence an inherent conservatism, and a blindness to the flaws in the system we inherited. Hence the problems get handed on from generation to generation.
Third, most places where peacebuilders operate are by definition societies disrupted by violent conflict, or which are going through complex and rapid changes. Meaning that circumstances create both risk and opportuity. There is a risk that the systems and cultural ways that young people are kept in their place have often broken down, meaning there really is a risk that their sense of exclusion will undermine things, leading to conflict and violence. But there is also a real opportunity, because of the disruption, for young people and their elders to experiment with new approaches, for example approaches in which women are not excluded from opportunity and decisions, in which cooperation between different groups in society is encouraged rather than seen as a risk, in which a greater degree of tolerance is encouraged, and a greater degree of transparency allowed.
All this doesn’t mean it is easy, nor does it excuse us from narrowing the description of “young people” so we know who we mean. But it’s important to work with them for a better society, and them as leaders within it.
Promoting Peace: the African Union at 50 years
This blogpost draws on a short paper prepared by a group of International Alert colleagues and I, which we have just published on Alert’s website. A shorter version was also published in Huffington Post. 2013 is the 50th anniversary of formal collective action in Africa, first through the Organisation of African Unity (OAU) and more recently the African Union (AU). African history is also at a kind of “hinge moment”: the post-colonial period is over and the African Renaissance is underway, economic growth has been steady for a decade, and the number of wars and coups d’état has declined. This anniversary year is an opportune time to take a look at how the AU can enhance its contribution to sustainable peace.
The OAU was a vehicle for pan-African solidarity at a time of liberation struggle. Its successor the AU is part of the international peacebuilding system. It has made a significant contribution to peace in Africa, but so far this has been focused primarily on preventing and reacting to large scale violence – what is sometimes known as “negative peace”.
Negative peace is when people have stopped fighting, but have not necessarily addressed their conflicts or differences, often because they lack the institutions or capacity to do so. Negative peace is thus often temporary. Positive peace on the other hand is when people and societies are successfully dealing with the unavoidable differences and conflicts which are part and parcel of human coexistence, without violence. It is recognisable not just by the absence of violence, but by the presence of functional relationships between people and peoples, between people and the state, and between states; and by the existence of dynamic institutions capable of mediating those relationships. Peacebuilding aims above all to strengthen these, which requires a sustained, long-term approach.
In our paper we explore how Africa is looking, from a peace perspective. The AU has made important contributions, but we suggest that it could do more – and perhaps also work differently – to promote the conditions for “positive peace”.
Peace in Africa
The incidence of major violence in Africa has decreased, but many challenges remain, not least because it takes years to build positive peace. Coups d’état have become more rare. Elections are becoming more and more normal, but alone they do not make democracy, and large parts of Africa are still governed through clientelism in ways which entrench structural violence. The period of transition when governance is neither autocracy nor democracy but somewhere in between, sometimes known as anocracy, is often marked by instability. This will be a feature for some time to come, its effects exacerbated by tensions between “traditional” and “modern” systems of governance.
Economic growth has recently been spectacular, boosted by increased natural resource revenues. Real income per capita has gone up by more than 30% and foreign direct investment has tripled in the past decade to $50bn per year, roughly equivalent to the value of remittances and to the value of aid. The consumer market is growing slowly too, e.g. there are roughly three mobile phones for every four people.
The challenges of peace include sustaining this growth, adding new economic sectors, and increasing economic participation. Much of the rural economy is dominated by smallholder farming and extensive livestock rearing. There is a tension between the short-term need for stability, maintained by the prevalence of peasant farming, and the need for agriculture to become more commercially oriented, which would entail a rationalisation of land ownership which risks causing instability. Current growth depends on inherently unsustainable commodities; this will not create or spread wealth without more value-added processing or production in the country of origin. Many countries are susceptible to the “resource curse”, making them prone to instability.
The number of people will roughly double between now and 2050, putting pressure on resources especially where climate variability makes agriculture unpredictable. Because of the “youth bulge”, the dependency ratio is high, which is a drag on entrepreneurship and growth. But sometime after 2025 the dependency ratio should become more conducive for economic growth – the so-called demographic dividend. Already young people are claiming political, economic and social space, but there are limits to what they are allowed to achieve or what is available. Ever-increasing numbers of educated young people with high expectations of economic and social improvement are chasing too few jobs. This is a source of frustration and has been linked to conflict. And there is no obvious prospect of full employment in the near future. Where political systems are inadequate to contain and manage their frustration, instability can result.
With their reliance on commodities and their relatively fragile governance, African countries are vulnerable to external trends and influences. Globalisation has undermined the power of the state internationally, and empowered licit and illicit international economic actors whose activities often undermine livelihoods and governance. International mining, oil and agribusiness companies help increase GDP but often reinforce clientelist governance. International peacekeeping has proven critical in helping stop wars in several countries, but has also prevented the resolution of some conflicts. International aid provides important funding and expertise but also distorts policy, exchange rates and governance. Global terrorists and criminal networks increase rates of violence and undermine governance, as do Western actions and policies against them; and liberal international trade norms impede African governments from nurturing their economies.
Africans are dealing with an enormous amount of change; with opportunity and frustration, both of which need good management to maximise the potential for progress and avoid instability. Many of the countries which emerged blinking into the sunlight at the end of the colonial era have now arrived at a point where their people are better educated and informed, and have higher expectations of the political economy. Economic growth means most governments are less dependent on aid, but face rising inequality among people with increasingly democratic expectations. The number of active conflicts has decreased. And from a positive peace perspective, progress is being made. Yet significant challenges remain.
The AU and peace
Peace and security are major priorities for the AU, and are highly subsidised by the donors whose support is crucial given the limited funds available from member states. The AU’s founding documents reinforce the idea of positive peace: its vision is of an Integrated, prosperous and peaceful Africa, driven by its citizens and representing a dynamic force in the global arena. Its Constitutive Act clearly identifies democratic governance, the rule of law, equality and human rights as critical public goods to be promoted and safeguarded by the AU; and the Responsibility to Protect doctrine is implicitly included.
The AU has made important contributions to peace. It has led or co-led peacekeeping missions or similar interventions in Sudan, Comoros, Somalia, Madagascar, Mauritania, the DRC and Burundi. It has brokered and mediated talks and agreements between Sudan and South Sudan, in Guinea, Kenya, and Ivory Coast. It has responded quickly to coups d’état, facilitating a swift return to constitutional rule. It maintains an early warning watch across the continent. It has developed a series of charters, outlining norms in areas relevant to peace including governance, gender equality, human rights and youth – though many of these still need to be ratified and domesticated by member states. The AU is spearheading work clarifying international borders. It has articulated a framework for post-conflict reconstruction and development. It is working with the UN and the Regional Economic Communities (RECs) to develop the African Peace and Security Framework, including an Africa Standby Force, comprised of military and police units ready to respond in crises. Its African Peer Review Mechanism (APRM) plays an important role, promoting and monitoring progress towards good governance.
Alongside this progress, the AU faces three important, interrelated challenges.
Getting the balance right between crisis response and peacebuilding Despite its mandate, the AU has been overwhelmingly reactive and crisis-oriented, often more in line with the concept of negative peace than with building positive peace. This reflects the need and understandable desire among member states to prevent fighting and bring it to a speedy end when it occurs. It also reflects the interests of the wider international community, including donors, for “African solutions to African problems”.
Peacebuilding is highly political. The AU’s member states, represented by incumbent governments, understandably prefer not to have outsiders interfering in their internal affairs. Thus some aspects of peacebuilding are seen as off-limits. It is unlikely a member state government would be willing to accept outside interference in its mining or oil sector, even though mining and oil often contribute to instability. Similarly with other aspects of governance: 40% of member states have not yet signed up to the APRM, and of those who have, only half have been peer-reviewed. Positive peace implies a need to rebalance the AU’s peace efforts away from crisis anticipation and response, towards a longer-term, more societal orientation which promotes better quality and more equal access to decision making, the economy, justice and security.
Finding the right niche The AU is part of a complex international governance system along with the UN, RECs and states, each with more or less clearly defined normative roles. In an imperfect, rather than a normative world, this is complicated, for example by unequal influence among member states, by the relatively undemocratic nature of some member states, by unequal capacity among different RECs, and by the influence of external powers whose preferences have an influence on those of the AU, including their desire to reduce external military involvement in peacekeeping operations in Africa. It is also complicated by differences in peacekeeping doctrine between the AU and the UN. At times the AU seems to be replicating or replacing both the UN and the RECs, when it could be playing a more complementary role. Differences between the positions of member states, and tensions between the AU and RECs, UN, and Western powers have complicated approaches to crises in Ivory Coast, Somalia and Libya. No other regional intergovernmental organisation tries to promote peace and security on such a massive (perhaps impossible) scale as the AU, with 54 relatively underdeveloped member states.
Linking up with African civil society The APRM’s executive director recently bemoaned that the APRM was “unknown to the majority of [African] peoples and the rest of the world”, and this is true of the AU more generally. There are numerous obstacles to African civil society engagement with the AU. Few Africans are able to visit the AU headquarters in Addis Ababa; African civil society and the AUC both lack resources to improve their mutual engagement easily; and it is not always in the interest of member state governments to promote the AU’s priorities like democracy and good governance, at home. Although the AU has liaison offices in around a dozen countries, these lack the resources to represent the ideas and mission of the AU in its entirety. The voice of each member state in the AU is primarily the voice of its incumbent government – which tends to exclude important perspectives and groups in society. Women’s voices are particularly ill-represented, and the AUC has few staff with expertise in gender issues.
Tentative conclusions
The AU has already shown it makes a significant contribution to peace, but it could do more. E.g. by:
Getting the focus right The AU is resource-constrained, covers a huge continent, and sits within a complicated international architecture, so it is most effective when focused on the right issues and the right niche. Arguably its comparative advantage is less in implementing expensive and complex peacekeeping missions and technical programmes, than in operating politically and in close collaboration with the UN and the RECs. Within these relationships, the AU is well-placed to mediate, provide political and analytical support to others, and promote common peacebuilding frameworks.
Emphasising a long-term peacebuilding approach The AU is well-positioned to help member states put in place the norms, institutions and other conditions for positive peace. Its charters provide a basis for sustained AU leadership promoting improved governance and other peace-supporting goods, such as access to justice, security and economic opportunity, conflict-sensitive trade and the implementation of free movement across borders. The AU can help Africans work out how to meet the challenges of anocracy, for instance by adapting and implementing the New Deal for Engagement in Fragile States.
Strengthening links with civil society The AU is distant and little-known. This disempowers Africans who have little idea of what their governments have agreed to on their behalf. The AU can improve collaboration with civil society, for example in promoting good governance. To do this with limited resources means using creative methods, for example allying itself with NGOs and using social media to publicise its various charters, enabling citizens to push for the charters to be ratified and put into practice by their governments. It can make better use of its Liaison Offices.
Anticipating new threats to peace Africa faces common and/or new threats to peace, such as how to engage young people as effective citizens; international terrorism, piracy and organised criminality; and the risks attendant on anocracy, natural resource exploitation and climate change. All these need to be addressed at least partly at a supranational level – even anocracy, since porous borders and the Responsibility to Protect means my neighbour’s instability is my problem too. The AU can take a lead in helping member states and RECs to work out how to respond to these and other emerging threats.
Providing African leadership African states, citizens and businesses will benefit from further visionary political leadership at a continental level to help protect them from external influences which might undermine progress towards positive peace, and to help seize opportunities for progress. This means coming up with African solutions where feasible and, where not, negotiating joint solutions with external agencies and powers – such as on Islamist terrorism and the illegal drug trade.
Is mining a development industry?
In an earlier post I wrote about how mining companies have evolved to take into account the needs of their host communities. I suggested ways they can broaden the application of their “social programmes” to understand, embrace and contribute to development at a higher, societal level than simply serving some of the expressed needs of the local or host community.
Having just returned from spending a week discussing related issues with staff of one of the large and relatively enlightened international miners, I’d now go further. One of the questions we discussed was whether the mining industry needs to re-label itself as a “development industry”.
While this was a controversial idea for some people, who saw it as suggesting a dangerous drift beyond their core business, for me it’s a no-brainer. Indeed, I’d go as far as to say that mining already does see itself as a development industry. A glance at the websites of a few randomly selected examples yielded the following:
We deliver natural resources that are at the heart of everyday life and are central to the development of society. (Xstrata)
We … work in partnership with our stakeholders to promote sustainable development. Our goal is to maximise our positive contributions, alongside governments and society, and reduce any negative impacts. (Anglo American)
[…] we continue to meet the changing needs of our customers and the resources demand of emerging economies at every stage of their growth…. [We] establish long lasting relationships with our host communities where we work together to make a positive contribution to the lives of people who live near our operations and to society more generally. (BHP Billiton)
Our products help fulfil vital consumer needs and improve living standards. (Rio Tinto)
These quotes were all readily available within moments of landing on the respective home pages. Clearly mining companies already see themselves as agents of development and progress. In any case, we are long past the point where progressive companies saw their role in value creation as being limited to shareholder value. They know they create value in many other ways – through their products, their culture, their taxes, employment, goodwill, etc. – and contribute to the creation of value by others. The correct question is probably not “is mining a development industry”, but “how to maximise mining’s contribution to development?”
Maximising mining’s contribution to development
Answering this requires us to define “development”, which is of course somewhat contested and ideological. After all, it is about the nature and arc of human progress, which is what political parties often seem to argue over. But when one looks closely at most different ideologies today, they seem to diverge more in the question of development process than in development outcomes. So for the purposes of this blogpost, I’ll use the simple and quite widely accepted view that broadly speaking, a more developed society is one in which people have sustainable and fair opportunity to participate in decision making which affects them, and in economic activities allowing them a decent standard of living and a chance to accumulate assets; feel and are safe from harm; have access to impartial justice and to the services and other requirements of well-being such as health, education, water, shelter, and a decent living environment. This is in line with the globally agreed Millennium Declaration, so not too controversial.
I don’t propose to explore here the difficult question of how these outcomes are arrived at. Development processes are pretty context-specific in any case, and (if we are honest) often quite random in nature, so it can be unhelpful to make generic prescriptions. But one thing we do know is that the way to achieve a particular outcome is not necessarily, or not only, by working on that issue. So for example one doesn’t necessarily achieve better access to justice or security simply by working on “justice sector” or “security sector” issues, nor better participation in decision-making simply by working on “governance sector” issues. The arc of development or human progress is more complex than that, and pretty much everything is organically linked to everything else. Improved governance can be a result of bringing local stakeholders together to examine and debate the costs and benefits of a mining or other economic project, and contribute to discussions about how the project will fit into local development plans, as much as through introducing or improving democratic elections.
So, what does a developmental mining company do?
So how does a responsible mining company contribute to the development arc as part of its core business? Alternatively put, this question has two parts: which mining company operations offer the opportunity to contribute to development, and how best to do so?
In a real sense, pretty much everything a large mining company does, provides an opportunity to contribute to progress. Raising funds, employing staff, acquiring land, procuring goods and services, investing in infrastructure, restoring mined land, dealing with waste, selling products, paying taxes and royalties, obtaining licences, establishing relations with governments, local communities and others, and so on. All these and more can be done in ways which promote progress. Naturally this is a twin-edged sword, i.e. they can also be done in ways which hinder, or even reverse progress, which is one of the criticisms often levelled at mining. So how can a company maximise its contribution, and minimise its negative impact?
International Alert has published and offers detailed guidance on this. But looked at more simply, there are two main elements to it. First, the miner needs to understand as well as it can, the context in which it is operating or planning to operate, from a developmental perspective: what is the actual or potential development arc, and where do we fit in? The company needs to see itself as a stakeholder in a wider set of dynamics, rather than seeing others mainly as potential stakeholders in its plans. This means looking not just at the local communities living around the potential site of the mine or other planned infrastructure, but at society more widely. In South Africa for example, one could argue that pretty much all development needs to take account of and contribute to certain key processes such as the evolving post-apartheid settlement with its delicate balance between stability and empowerment; and improved security for and empowerment of women and girls. In Liberia, the equivalent issues might be post-war reconciliation and an improved social contract between citizens and the state. In China the equivalent issues might be ensuring that the 500 million people who have been left behind in the race for growth are treated fairly, even as the urban middle class continues to to earn and save more, and achieve more openness and less repression.
All these examples are of course arguable and partial, and I include them only to illustrate my point that a responsible miner extracting minerals in South Africa or Liberia needs to take account of its impact on such factors, make a judgement about what is good and bad, and adopt strategies to maximise the goods while minimising the bad. And if the same company is selling products to China it needs to make a judgement about its impact on the key issues there, too. So questions like “how do we help strengthen the social contract in Liberia, improve the lot of rural Chinese people, and redress the imbalance between races and genders in South Africa through our core business and work practices?”, become not just relevant, but critical. And similarly at an even higher level, as in “how do we minimise our contribution to climate change and help enable peaceful adaptation to the environmental changes caused by climate change?”
The second element of the “how to?” part of this question is that, given that none of these issues are simple or black and white, the miner needs not only good political and development expertise to help analyse and resolve them, but also a clear idea of its core values or ethics, to guide decision making. These sit alongside other influential factors like shareholder value, government regulations, and semi-voluntary frameworks like the Voluntary Principles on Security and Human Rights, Free Prior Informed Consent and the UN Global Compact, to provide a reference point for those faced with difficult decisions.
Company narrative and incentives
In the background alongside these, I would suggest that some companies need to rework their internal narrative too. In addition to the usual explanation about excellence, shareholder value, long-term assets, health and safety, low unit costs and so on, this broader narrative explains how the company sees itself in the world, how it creates value in society, that it is a stakeholder in others’ projects and plans, a good corporate citizen and an actor alongside others. This will help move miners’ staff away from the company-centric and often rather transactional approach epitomised by the concept of “social licence to operate”.
Finally of course, incentives are key to everything. The progressive mining companies of the future will be those whose systems and culture reward staff who operate in line with the changed company narrative. Dare I also say that the mining companies of the future will have a far more evident feminine side to them, compared to now? I don’t necessarily mean there will be more women on staff and a better gender balance across all functions and departments, although that will certainly be the case. I mean rather that the qualities we tend to think of as feminine will be more useful – qualities like empathy and consensus-building – and will therefore be rewarded with promotion and influence.
In conclusion then, it’s clear that miners are already agents of development; that they are doing and can do more to contribute to the arc of human progress locally and in society more broadly, by recognising their developmental role, making sure they understand well the development priorities in the contexts where they work, and knowing why and how they contribute to them as part of their core business.
Phil Vernon 