Oxfam president: Resource rights and protections are fundamental

CULSAR-friday_11

by Raymond Offenheiser
President, Oxfam America
CUSLAR member 1973-1977

Remarks, CUSLAR 50th Anniversary Celebration
Cornell University

September 25, 2015

Thank you, Tim, for the kind introduction and for the invitation to join so many CUSLAR supporters and former members.   Nice to see so many old friends and now, indeed, older friends.

One thing I have learned over the years is that serendipity can shape a life.   CUSLAR was one such experience in my life. My first day of class as a grad student here at Cornell was September 12th, 1973, the morning after the Chilean coup. My first class was with Professor Tom Davis, a former advisor to the Chilean government of Eduardo Frei. Our class was 8 Chileans and 4 North Americans.   Professor Davis, sensing the emotion in the room, tossed aside his opening day lecture and instead offered a powerful commentary on the implications of the Chilean coup for democracy in Latin America. I was hooked.

I gave up what had been a focus on Africa for Latin America, was introduced to CUSLAR by Kevin Healy, a grad school colleague , and spent the rest of my grad school tenure running the CUSLAR film series and supporting CUSLAR’s efforts to bring Chilean refugees to upstate New York. As a capstone, my wife Suzanne and I were married by Bill Rogers, CUSLAR’s founder and Joel Gajardo, a Chilean pastor who was himself a political refugee and a beneficiary of the CUSLAR programs of that era.

Fast forward to the late 1980s and coming full circle, I joined the Andean office of the Ford Foundation in Lima, Peru where we funded the fragile Chilean opposition groups operating out of the offices of the Catholic Archdiocese in Santiago along with some nascent centrist think tanks and the polling work that occurred just prior to the plebiscite on general elections.

offenheiser-by-margeerogers

Raymond Offenheiser at CUSLAR celebration. Photo: Margee Rogers.

It was very moving and gratifying to be in Santiago the day of the inauguration of President Aylwin and watching the dramatic events unfold in the infamous football stadium which had been the site of so much murder and suffering in the days following the coup.

So I thank you CUSLAR and CUSLAR colleagues for setting me on course to make some small contributions to the wider struggle for human rights and social justice in the world. It’s been a great ride and it’s not over yet.

In those early days, much of our focus was on the brutal suppression of civil and political rights across the Latin American and Caribbean region — Pinochet in Chile, military rule in Argentine, Somoza in Nicaragua. etc.

 

Oxfam1

Photo: David Stubbs, Oxfam America

Today, by contrast, the agenda for much of the work that groups like Amnesty, Oxfam and Human Rights work do is focused on economic and social rights. With that in mind, I would like to focus my comments on the struggle for resource rights and protections, as a window into one of the major drivers of conflict and rights violations across Latin America and the world.

To frame this challenge for you, let me describe a typical situation of Andean peasant farmers in northern Peru. Families that have farmed and herded animals for generations discover that a mountain top removal gold mining project has been approved that spans five peaks rising above the fertile valley below their land.

What follows over the next few years are a series of calamitous events such as roadside spills of mercury that families collect and hide in their homes thinking it is silver only to find it poisons them and their children.

Dead fish in local streams critical for irrigating farms and supplying homes in the valley, caused by cyanide release from the mine. Expanded mining operations to a sacred mountain that is a major watershed for the valley and is a designated national conservation area. Somehow, the company has persuaded the government to override all previous agreements and release these lands to the company.

In one dramatic incident, one family is attacked and killed by mining company security guards. Their crime? Building a small cottage on land they had farmed and grazed for generations that now the mining company claims as theirs.

Pretty dramatic picture. Yet these are all true stories that occurred around the Yanacocha mine in Cajamarca, Peru over the last 15 years.

They encapsulate the struggles that grassroots communities are facing in rural areas all over the world as the process of globalization accelerates the penetration of major corporate interests into remote regions in pursuit of access and control of land, water, oil, gas and minerals.

Communities face the loss of assets and livelihoods as corrupt, local and national leaders collude with corporations. They secure deals that marginalize indigenous populations. And in many countries, weak national institutions fail to execute existing legislation to protect the interests of their affected populations.

The stakes are high in these struggles. Economic growth has exploded over the last three decades of globalization and the markets in India and China have created insatiable demand for consumer goods for a growing middle class.   There is no corner of the globe that is not being explored or staked out by some company or nation for its potential extractive value to meet the needs of energy, food or hard rock minerals.

Taking Peru as an example — during the Fujimori administration after the fall of the Shining Path, investments in extractive industries grew by some 700 percent over a two year period. In the last five years, Peru has had one of the world’s highest growth rates — 9.5 percent at its peak — driven largely by mining. But sadly this growth seldom leads to any appreciable improvement in the livelihoods of those rural communities and regions where these projects take place.

The question then becomes

  • Can these historical trends be reversed?
  • Can communities fight back?
  • Can they force large corporations to change their approach and practices?

Well, now that I have given you the bad news and laid out the problem, let me sketch out for you the good news and the opportunities for action.

Oxfam2

For centuries, mining, oil and gas companies could toil away in obscurity and with impunity. They could count on support of corrupt leaders to provide their military to deal with inconveniences like recalcitrant community groups or arbitrary arrest of capital city environmentalists.

Today, however, there are opportunities to turn the tables. Companies are slowly realizing that they need to be perceived as socially and environmentally responsible, to minimize the use of violence to solve problems, to protect their large capital investments against nationalization, and to fight the label of tax dodgers. But they didn’t come to this realization on their own.

A succession of failures like Yanacocha has cost numerous CEOs their jobs and their shareholders billions of dollars in shareholder value and company reputation. So that game is on and there is opportunity to drive more change. So how do we as activists do it?

This new context is the result of a number of different factors. The internet and films like Blood Diamonds and Avatar have been a wakeup call to industry that you can no longer hide from public scrutiny. As one mining executive put it to me: “there is no backyard on this earth where we can dig a hole that the world will not see in 24 hours on YouTube.”

The World Bank’s Extractive Industries Review and Tony Blair’s Extractive Industries Transparency Initiative set new voluntary global norms for the industry that countries and companies were asked to sign up to. And under pressure from activists, the World Bank has produced investment safeguards that embed these norms in every loan issued to EI firms by the IFC. As a result, the International Council of Mining and Metals, the industry’s own trade association has now embraced many of these global norms.Oxfam3An activist social investment community has emerged in the US and Europe that tracks company behavior and files resolutions at Annual General Meetings on behalf of aggrieved communities. Groups like Oxfam, Global Witness, Earth Rights, Earth Justice, Revenue Watch, Publish What You Pay and others in the business and human rights space are forcing companies to become responsible citizens wherever they operate.

Oxfam4

Photo: Chris Hufstader, Oxfam America.

Meanwhile, national governments that are thinking more conscientiously about the kinds of deals they make with such companies. Bolivia is a good example. Its mineral wealth exploited for 400 hundred years, Bolivia, now as a result of renegotiating its royalty arrangements, is sitting on top of the largest cash reserves in its history.

So what are the key issues to be addressed and how are they being addressed? And where is the opportunity for CUSLAR activists to engage. I will offer two but there are others.

Oxfam5

Free Prior and Informed Consent or (FPIC) is the notion that any community should have the right with sufficient advance warning to say yes or no to the presence of a large extractive project in its midst. For years, mining companies simply made deals with governments and assumed they could bully communities out of their way with government support. No longer the case!

Over the last ten years and in the face of numerous conflicts the industry has had to concede to the activists that this approach is counter-productive and undermines their ability to secure social license to operate.

Absent this formal consent, their billions of dollars of capital investment are worthless. Activists have forced most of the major global mining companies to adopt FPIC as policy.

This process was aided by a famous case in Tambogrande Peru, in which a community referendum indicated 98 percent disapproval of major project by Manhattan Minerals and the Peruvian government respecting the referendum withdrew the company’s license to mine, costing them millions in lost share value.

 

Oxfam6

Photo: David Stubbs, Oxfam America

A second front in the battle with companies is around the issue of revenue transparency. Revenue transparency allows citizens access to a true accounting of the financial benefits accruing to their community and to the nation from EI projects as well as enabling them to hold their governments accountable to invest these profits into critical national development priorities. Until recently, this kind of data was unavailable to citizens.

As a result of work of Oxfam and other INGOs, legislation was passed as part of the Wall Street Reform Act requiring all EI companies registered on the NYSE to disclose all financial dealings with any country where they have projects anywhere in the world.

Sued by Oxfam, the SEC issued tough rules to enforce this these new regulations. The American Petroleum Institute is fighting back trying to kill it but losing ground quickly as similar legislation has been enacted with Oxfam support in the UK, the EU, Norway and Canada—a major victory for activists that companies are now acknowledging by moving voluntarily to full reporting. There is still much to be done to fully realize the benefits of this important regulatory victory.

Nonetheless, it now raises the ante with governments for sound fiscal governance and proper investment of national income in the welfare of their citizens. And for citizens this provides yet one more tool to be used in demanding an end to corruption and poor governance.

The wider significance of these victories is the fact that they are occurring at a moment when it is clear that the days of abundant foreign aid are over. Foreign aid is flat-lining and donors are now looking to national governments to share the burden of financing their own development.

Critical to this will be governments building the institutional capability to take on this responsibility seriously and for citizens to hold their leaders accountable for doing so. The recent collapse of the government in Guatemala largely on corruption charges is a good example of what under the best of circumstances can happen.

One precipitating factor in this transition was a number of protracted conflicts between mining companies and indigenous communities. It was these conflicts that lead indigenous communities to join forces in an unprecedented coalition with the urban middle class in calling for the President’s resignation.

 

Oxfam8

Photo: Emily Drees, Oxfam America

My message to CUSLAR activists is that this is an area to give attention to. Much has been achieved in a very short time in terms of significant reform and much more is possible in other areas like indigenous and human rights policies for companies, decentralization of revenue to affected communities, mandated beneficiation to name a few.

 

In closing, I would note we are meeting at a very auspicious moment.

The UNGA is meeting this week in NYC to endorse a set of Sustainable Development Goals that set important benchmarks for addressing a wide array of social and economic challenges. They are meant to be universal and in that sense are meant to be an agenda for the promotion of human dignity and progress for all nations, ours included.

The Pope has chosen to come to the UN and give an unprecedented speech to world leaders, challenging them to embrace the moral challenge these goals represent. It is rare that we see moments when moral values are forced upon political leaders so boldly and unashamedly.

CULSAR-friday_10

Raymond Offenheiser at CUSLAR celebration. Photo: Rebecca Dearden.

This is a moment that all of us who were part of the solidarity moments of yesteryear should cherish and those of you who are members and CUSLAR followers today should see as a sign of hope and enormous opportunity. I hope we can collectively grasp it.

Thank you very much.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s