Theories and concepts of natural resource governance

Conceptualising mineral governance

The concept of mineral governance is a new concept that seeks to explain why mineral-rich countries are unable to sustain the well-being of their people.

The term mineral governance can be defined as a set of strategies aimed at improving the transparency and accountability in the management of mineral resources (Acosta, 2010). The transparency and accountability initiatives cover areas of licensing, exploration, contracting and extraction, as well as mineral revenue generation and allocation. The relevant stakeholders involved include government (the executive, Parliament and other state institutions), private companies (whose work relates to mining), non-governmental organisations (NGOs), the media and civil society organisations (including community organisations).

Transparency in mineral governance refers to the visibility of decision-making processes in the sector, the clarity with which the reasoning behind decisions is communicated and the ready availability of relevant information about governance and performance in the sector. As a result, it means making decisions about the mining sector and investments accessible to stakeholders and the local people. Transparency in the mining sector is required regarding who has made a decision, the means by which it has been reached and its justification. For example, was the decision made according to the authority conferred on or delegated to an individual or body, according to procedures such as majority-rule voting or consensus, or on the basis of expert opinion, professional judgement and formal decision aids such as multicriteria analysis or cost benefit analysis?

Accountability refers to the allocation and acceptance of responsibility for decisions and actions as well as the demonstration of whether and how these responsibilities have been met. Accountability is an issue for mineral governance in contexts where the effectiveness of decisionmaking processes is essential for their authority and credibility. Where accountability is unrealisable through direct democratic involvement and is more informal, the need of citizens for proper access to information, meaningful consultation, and for enhanced opportunities for active participation become more significant. Compliance with regulatory requirements is an important component of good governance for a public entity. Accountability in the mining sector also requires compliance, which means the extent to which governments and other actors in the mining sector observe relevant legislations, standards and codes and have a compliance programme that is integrated with their operational and financial plans; systems to monitor conformity, such as internal and external audits; and processes to meet external reporting requirements. Reporting requirements should be the minimum necessary to provide financial, governance and performance accountability (Lockwood et al., 2010).

It is important to note that although Acosta’s (2010) definition gives an overview of the key concepts of mineral governance, it fails to include other important governance concepts such as participation and equity, which are also essential in mineral governance. Participation refers to opportunities available for stakeholders to be included in and influence decision-making processes and actions in the mining sector. Governance is regarded as inclusive when all those with a stake in the mineral governance processes can engage with them on a basis equal to that provided to all other stakeholders. As solutions to mineral governance challenges often demand substantial changes in practices, their implementation requires participation of as many of the affected actors as possible. It is important for governance actors to have access to many different perspectives and kinds of knowledge, because no single actor has the resources to generate solutions to mineral resource-related problems. Inclusive mineral governance is about governing actors seeking input from multiple sources; having an awareness of and valuing diversity; and having policies and structures to foster stakeholder contributions and engagement.

Moreover, equity is another important mineral governance initiative and refers to the respect and attention given to stakeholders’ views, the consistency and absence of personal bias in decision-making, and the consideration given to distribution of costs and benefits of decisions. Those charged with promoting mineral governance arrangements are expected to be fair and equitable in the exercise of the authority conferred on them, particularly in relation to the distribution of power, recognition of diverse values, consideration of current and future

Theories and concepts 19 generations, and the development of mechanisms to share costs, benefits and responsibilities of decision-making and action. Addressing many mineral resource problems is complicated by confusion regarding who should be responsible for what (Dovers, 2005). Given the crosscutting nature of such problems, it is especially important to ensure that responsibilities and roles do not fall unfairly on particular actors, such as private interests being expected to shoulder the bulk of the costs for public good outcomes or future generations being burdened with the costs of the present generation’s actions. Fairness in mineral resource use also implies practices founded on stewardship of mineral resources for protection of biodiversity and ecological processes.

It is important that the mineral governance structure treats stakeholders with respect and supports their dignity, which is a moral obligation and has the potential to foster acceptance of outcomes. Failprocedures should guarantee that like cases are treated alike, and that where they are irrelevant, the gender, ethnicity, religion, disability and socio-economic status of a person do not determine decision-making processes or outcomes.

Acosta (2010) posits that mineral governance has two main goals: first, it seeks to improve the processes through which stakeholders and institutions can effectively bring governments of mineral-rich countries to account; and second, to effectively contribute to better outcomes, such as helping to improve the socio- economic conditions of people or poverty alleviation. These two goals, although different, are closely related. This is because, when the democratic conditions and practices in the mining sector are enhanced, they will more likely result in better development outcomes.

For these goals to be achieved, problems associated with mineral governance will have to be addressed. These challenges include administration challenges in terms of the necessary qualified staff; informational, infrastructural, technological and financial resources to be able to manage the sector effectively; weak political institutions and civil society organisations, as well as lack of effective policies to ensure that the mining sector benefits local people. These challenges go beyond the executives of governments to include key institutions such as Parliament, mandated state agencies, the security services and the judiciary who are supposed to have oversight responsibilities, support and control over the mining sector.

In order to ameliorate these challenges and promote good governance in the mining sector, mineral wealth countries need to strengthen those institutions that are essential to controlling, directing and overseeing the mining sector. Parliament in particular needs to be giventhe requisite skills to perform their functions effectively. There is also the need to build the capacities of local community groups and civil society groups to enable them make informed decisions and contribute meaningfully to the governance process. Furthermore, good governance in the mining sector can also be achieved through the enactment of comprehensive mining legal and policy frameworks to regulate the sector while promoting transparency, accountability, participation and equality for development.

Based on the foregoing discussions of mineral resource governance, the following theories will be discussed. They are the rent-seeking government theory, and the revisionist theory.

< Prev   CONTENTS   Source   Next >