Pacific Commits to Bold Steps to Harness Human Development Gains from Extractive Industries

20 Mar 2013

The increasing global demand for natural resources has opened up potential markets for Pacific Island countries which have sought-after resources like oil, gas and minerals both on the land and in the seabed.

While increased income from extractive industries will be a welcome boost to many Pacific economies, the challenge is to ensure that it results in sustainable human development. Experiences from the Nauru phosphate mine as well as from the Panguna gold and copper mine in Bougainville have demonstrated that the extraction of natural resources if not managed well can result in poor human development, damage to the environment and can create conflicts.

Representatives from 9 Pacific Island countries - Cook Islands, Fiji, Republic of Nauru, Papua New Guinea, Autonomous State of Bougainville of Papua New Guinea, Solomon Islands, Tonga, Timor Leste and Vanuatu- attended the “Pacific Symposium on Managing Extractive Industries in Pacific Island States to Improve Human Development” to discuss these issues. They were joined by representatives from extractive industry firms operating in the Pacific; regional organizations, international organizations including UN agencies; the World Bank, Asian Development Bank; and International non-governmental agencies.  The emphasis was on learning from the past and identifying at the policy and programme level what could be improved, including how to ensure governments, communities, including land owners and the private sector might work better together to minimize the impact on the environment and ensure better human development outcomes.

The Symposium was a follow up to an international meeting held in Mongolia in 2011 in which representatives from Fiji, Papua New Guinea and Timor Leste participated. Some of the key issues that were discussed in Mongolia, such as, spending and investment policies; revenue management systems; conflict prevention; governance arrangements, human rights and gender impacts, environmental impacts; and managing the so-called Dutch Disease, were part of the agenda of the Pacific Symposium.  The Pacific Symposium was an opportunity to consider these issues in the context of small island states where the impact of mining can be significant but also allowed for discussion on the emerging issues of seabed mining on the Pacific Ocean.

 “We all share a common vision regarding the extractive industries, that is to grow and generate more revenue for our countries and have its benefits trickle down to our grassroots people. Additionally, we must ensure that this shared vision encompasses good governance, sound management of revenues, safeguarding of landowners’ interests and environment sustainability,” said Hon Inia Seruiratu, Fiji’s Minister for Agriculture, Fisheries and Forests; Minister for Provincial Development and National Disaster Management.

 “Many customary owners continue to believe that mineral found on their land is their property and not State-owned. Hence the strong belief that they are entitled to any monetary benefits derived from those minerals. Practically when this does not happen, they are disillusioned and that is causing a lot of tensions and violence in some of our Pacific Island countries. Fiji is no exception. This is an opportune time for this Symposium to work out the best approach to harmonize these misunderstandings in order to encourage further potential growth in the extractive industry,” added Hon. Seruiratu.

The Symposium heard from the President of the Autonomous Bougainville Government, John Momis about the challenges surrounding the re-opening of the Panguna mine. President Momis said that the mine would be opened under a new mining legislation, in which government would be the joint-owner of the resource along with the land owners.

“The mining should not destroy the potential for agriculture and other industries. We do not want to over-mine.”

Minister of Finance and Treasury, Rick Houenipwela shared the experience of the mining industry in the Solomon Islands and said that the local employment sector should be prepared to meet the employment opportunities generated.

An outcome statement issued at the end of the three day meeting calls for commitment by Pacific governments to respect the environment, human rights and transparent revenue distribution mechanisms.
“The Pacific’s past experiences with natural resource extraction has been challenging and the region is now poised to benefit from the increase in demand. This is an opportune time to take bold measures to do things better and advance human development,” said UNDP Deputy Assistant Administrator and the Deputy Director for Asia Pacific, Nicholas Rosellini.

The outcome statement called for the effective management of the triangular relationship between governments, the private sector and communities. It encouraged Pacific Island countries to design their own extractive industry revenue distribution mechanisms, learning from global experiences. It called for engaging with communities, including land owners and building partnerships for long-term sustainable development. The outcome statement highlighted government and businesses responsibility with regards to human rights and called for the inclusion of women in decision making in the extractive industries sector.

As a follow up to the meeting, Fiji organized a national consultation amongst faith based organisations on environmental stewardship and Vanuatu has indicated that it will seek UNDP assistance to deepen the discussion in that country among community groups.

Papua New Guinea has offered to host and support financially a follow-up regional meeting on this topic in PNG with the potential to include site visits to mining areas to view firsthand the impact and role of Government, mining companies and community stakeholders.