Rebeca Grynspan: Speech at the Security Council Thematic Open Debate on Conflict Prevention and Natural Resources

19 Jun 2013

Speech for Rebeca Grynspan, UNDP Associate Administrator
at the Security Council Thematic Open Debate on
Conflict Prevention and Natural Resources
Wednesday, 19 June 2013

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UNDP welcomes this opportunity to examine how effective and transparent management of natural resources in conflict-affected states can contribute to international peace and security.

Experience suggests that being resource-rich countries have a higher risk of experiencing conflict and high-rates of poverty; but risk is not destiny! Although sizable, risks can be managed; they are not insurmountable.

Countries have learned a lot about how to harness natural resource wealth to jump-start their economies, create stable societies, and improve the lives of people. Many now hope to tap higher prices and new discoveries of oil, gas and minerals to accelerate human development.

Good examples from Chile to Botswana tell us this hope is well founded. Many resource-rich countries however, have had disappointing results, in fact growing on average, more slowly, experiencing fewer human development gains, slower poverty reduction, and greater inequality - than countries without natural resources.

Since 1990, the number of oil producing countries with on-going conflicts has increased, while non-oil producing countries have become more peaceful.

Over half of all countries with Security Council mandated missions are resource-dependent. This means oil, gas or minerals account for more than 25% of their total exports.

This leaves little doubt of the importance of the extractive sector as an international peace and stability issue that demands a development response - at national and international levels.

To enable least developed and conflict-affected countries to overcome the challenges inherent to managing large sums and governing the extractives sector, our response must include four key areas:

1) Helping countries establish clear and transparent rules of the game. Countries need robust national legal, institutional, and policy frameworks and sufficient national capacity to enforce them; 

2) Ending illicit capital flows, bribery, and tax evasion worldwide.  It is critical that countries home to multinational corporations or the stock markets which list them include provisions for transparency and accountability in their laws and regulations. The more universal these provisions are the better;
3) Supporting countries to boost the voice and participation of affected communities especially women and indigenous populations; and
4) Equipping countries with the capacity and know-how they need to deal prudently with large revenue flow and invest in sustainable human development – which balances short term priorities with long term gain.
 Let me expand on each:

Resource-rich countries need first and foremost, robust legal and policy frameworks to clarify the rules that guide the actions of governments and companies alike. 

The rules must be transparent and aim to help countries:
• negotiate fair contracts;
• prevent illicit capital flights and tax evasion;
• protect communities with social and environmental safeguards; and
• enforce and monitor compliance . Too often, good rules go unenforced.

Given the conflicting interests and multifaceted challenges inherent to this process, UNDP can and often does serve as an impartial facilitator, working with the full range of development actors and stakeholders. In this role, we can help governments know what to expect and what’s worked elsewhere; identify capacity gaps; access technical and advisory services, including through south-south cooperation; and establish concrete action plans.

In Tanzania, Liberia, and Sierra Leone, UNDP supported Governments to close information and bargaining asymmetries and monitor contracts. In Afghanistan, we strengthened the capacity of the Ministry of Mining, helping it to build establish basic regulations.

In Sudan, Tanzania,  and Zimbabwe, through the Global Environment Fund, we helped introduce cleaner gold mining and extraction technology as a critical environmental safeguard.


The involvement and active participation of affected communities is a second area that demands more attention and support.  Countries, working with development partners, should put in place measures to ensure the full participation of communities, especially women, indigenous peoples, and vulnerable groups. Growing evidence is revealing that the negative impact of the extractive sector is not gender neutral.

We’ve learned from experience that the involvement of communities from the start, when countries are yet at the stage of exploration, is critical to prevent misunderstandings, diffuse tensions and prevent conflict. Through the EU-UN Partnership on Land, Natural Resources and Conflict, UNDP works with civil society groups in the DRC, Rwanda, Burundi and Uganda to establish conflict resolution mechanisms which can lessen tensions over land and revenues.

We also help to strengthen the capacity of National Human Rights Institutions to protect the rights of citizens and help communities and civil society groups better understand their rights and ensure their voices are heard. These efforts should be extended to help companies fulfill their obligations under the UN Guiding Principles on Business and Human Rights and the UN Global Compact.

Thirdly, countries need support to prudently and transparently manage large revenue inflows and invest them well.

Here the work of EITI, Revenue Watch, Publish what You Pay and the Africa Progress panel are important steps forward.

Clear and transparent processes, together with an empowered and informed civil society and media can limit corrupt practices and ensure remedial action is taken wherever it is exposed. UNDP has a longstanding record in enhancing the capacity of civil society actors to scrutinize private and public actions. Civil society empowerment is critical to close the gap between transparency and accountability. 

Finally, countries should be supported, in their efforts to curb the impact of volatile markets and invest revenues effectively. Revenues are too often channeled into big infrastructure projects, which end up benefiting the sectors of society that are already better off.  This concentrates wealth and can leave countries worse off – rather than better.

 

To realize long-term benefits, countries need to invest in policies and initiatives that build healthy and better educated populations; diverse economies; and vibrant communities, well served by improved infrastructure. 

UNDP helps countries to identify the policies that generate sustainable human development. We supported Azerbaijan and Mongolia’s efforts, for example, to establish insulated sovereign "Investments Funds" which enable them to invest in human development while stabilizing exchange rates. In Angola and Kazakhstan, UNDP worked with companies in the extractive sector to help them break out of their enclaves and work with local businesses and entrepreneurs, to generate needed skills, provide on-the-job training, and involve them in supply chains. It is important that the extractives sector generate jobs at early stages, especially in affected communities and for ex-combatants and vulnerable groups. Unfortunately, resource extraction itself entails few jobs that is why successful programs like these are so important.

I am confident that conflict-affected countries can harness the potential of natural resources to deliver sustainable human development. The world cannot afford to NOT deliver the stepped up support it will require. Population growth, climate change, and scarce natural resources threaten to conspire to make natural resource related conflicts a defining threat to global peace and security. UNDP looks forward to working with all partners to deliver the development response it demands.

***

Leadership
Rebeca

Rebeca Grynspan was appointed by Secretary-General Ban Ki-moon to the position of UN Under-Secretary-General and UNDP Associate Administrator effective 1 February, 2010. Before joining the United Nations, Ms. Grynspan was elected Vice-President of Costa Rica from 1994 to 1998.

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