Accountability is needed before transparency in the extractive industries resonates with communities in Latin America
Global leaders from business and government meet in Lima today to discuss “open and accountable management of natural resources” at the Extractive Industries Transparency Initiative (EITI) global conference. It’s the first time the conference has taken place in Latin America, a region where communities have felt the effects of corruption and misconduct by governments that approve companies’ projects despite little or no consultation with locals. Peru has more than once attracted international attention because of protests, inadequate environmental impact assessment, and human rights abuses, such as those related to the huge mining project of Tía María.
Peru is an “EITI Compliant Country”, the first in Latin America, and the only other country in the region apart from Guatemala to receive that status. This means the government declares how much revenue it receives from companies that extract the country’s natural resources. A cornerstone of EITI’s belief is that use of natural resource wealth can lead to poverty reduction. But for many communities in Peru, the extractive industry has contributed to maintaining or deepening their poverty and exposes them to serious risks. The situation is so worrying, in fact, that an Ombudsman has criticised the Government for “failing to enforce” laws granting indigenous peoples prior consultation for developments on their land.
Lack of transparency also exacerbates environmental harms, like those occurring in the Amazon area where the Pluspetrol & PetroPeru oil industry has destroyed water resources and livelihoods of indigenous peoples living in El Tigre River basin. Protests by local communities against Dengwood Holdings Peru Metals have also broken out over contamination of subsoil water sources due to mining activities.
Across the region communities face similar problems. In the last three years, Business & Human Rights Resource Centre has contacted companies operating in Latin America regarding allegations of human rights abuses 204 times, and almost half (43%) of these involved extractive companies. Yet some states still allow extractive projects that deprive indigenous peoples from their livelihoods, as in a case in Paraguay highlighted by the UN Special Rapporteur on the rights of indigenous peoples.
In Brazil, numerous reports of killings, diseases, evictions, lack of information and consultation on projects that affect indigenous and quilombolas (rural settlements of people of African descent) have emerged in the last couple of years. Munduruku indigenous communities have received death threats from miners. Rangers have been accused of killing Guarani leaders for speaking out about the illegal occupation of their land. Construction companies building dams, railways, roads, and ports, have affected the Guarani, Yanomami, Tembe, and Awa peoples. Those who have opposed extractive projects have too often been victims of intimidation, threats, aggression and killings.
The present reality for many indigenous, afro-descendant peoples and other poor and peasant communities in the region is that their historically recognized territories, rich in natural resources, are being exploited or are at risk of being so by oil, mining and logging companies. This is despite the current low price of commodities; although some extractive projects have stalled or shrunk, many are still going ahead at full speed. It seems that costs of production in Latin America are so low that these ventures are still profitable.
Initiatives like EITI can play an important role to protect these groups from further abuses if they really work towards promoting “increased trust, better information, and good governance”; as they claim, it is much needed. The EITI could also be an effective forum to bring the concerns of affected people to the table.
But ultimately transparency must surely be a means to a goal, and not the goal itself. The ultimate objective should be preventing and fighting against abuses to guarantee that communities affected by business projects - especially from the extractive industry, as these usually have the largest impacts - are informed about what is going to happen to their territories and to them. They should be properly consulted and should be part of the decision-making process regarding their future.
This comes down to governments in the region taking steps to ensure human rights are protected from business activities by putting the necessary safeguards in place, and seriously listening to affected people when implementing a project that will impact them. Eventually this means a project should be cancelled for imposing too many social and environmental risks to their livelihoods
In this regard, transparency is important but only when accompanied by accountability, for businesses and for governments. Human Rights Watch has suggested that EITI could address the human rights impacts of host governments, remarking that “transparency can be transformative in an environment where fundamental freedoms are respected because the combination of the two is what provides for accountability… In very repressive environments, transparency can offer little more than an empty gesture that may even allow an abusive or corrupt government to act more brazenly”.
The EITI has made gains in increasing revenue disclosure by some governments on the extractives industries. But it is important that this does not happen in a vacuum; accountability for human rights must be implemented. Only then will “transparency” meaningfully resonate with communities all over Latin America, and help ensure that natural resources can benefit all citizens.