The extractive industries impact on the lives of a very wide range of individuals and communities. Ethical concerns range from equity, environmental degradation and the geo-political structure of the sector, to corruption and human rights.
Non-renewable mineral resources play a dominant role in the economies of 81 countries. Together these countries account for a quarter of the world GDP, half the world’s population and 70% of those living in extreme poverty. In many low income countries the sector accounts for more than 20% of exports and government income.
Many countries have financed their development through resource extraction. However, there are risks related to natural resource wealth. These include volatile economic growth; limited job creation; violent conflicts; corruption; environmental degradation; gender violence; and spread of HIV and AIDS among communities impacted by extraction activities. These are challenging conditions for good corporate practice.
There is a need to strengthen legal and institutional frameworks to negotiate and enforce contracts in transparent and accountable ways; and to ensure that exploration and extraction operations are environmentally and socially sustainable. Revenues need to be managed transparently and deal with volatilities in these revenues. Extractive companies can make a positive contribution and have an essential part to play in this. However, it can be the case that poorly-managed company operations are part of the problem.
ECCR recently made a submission to the Church of England Ethical Investment Advisory Group (EIAG) consultation on the extractives sector.