International Instruments to Address Conflict Resources

Adapted from a presentation at the Seminar on Natural Resources and Armed Conflicts, UN Headquarters, New York. May 21, 2007.

Patrick Alley*

The international response to addressing the issue of conflict resources –which can, under some circumstances, be very effective – is currently incoherent and piecemeal. A lack of consensus about what constitutes a ‘conflict resource’ has generally led to inconsistent and inadequate responses to the problem. The result of this is increased civilian casualties, destruction, and reconstruction costs.

This paper first outlines the unsettled definition of ‘conflict resources’ and then provides examples of the incongruity of international responses. This is followed by a brief examination of the utility of existing international instruments to deal with the problem. A set of recommendations for the international community serves as the conclusion.

The need for coherence in addressing natural resources and conflict

The phrase ‘conflict resources’ is now widely used at international meetings and in policy documents, but the reality is that it means different things to different people. Is a conflict resource:
 One that is traded by a rebel group? One that is traded by a government, like that of Charles Taylor? One that is traded by an aggressor illegally attacking another country? Or one that is traded by a legitimate government defending itself against an illegal invasion?

Until there is clarity about what we mean by a conflict resource, it will not be possible to address the problem.

International response and action can be very effective, as the UNSC timber sanctions on Liberia demonstrate, but such responses are piecemeal and often too late. Currently, the international community acts on some conflict resources but not others:
 Sanctions were imposed against diamonds in Liberia in 2001, whilst no sanctions were imposed on timber until 2003; two years in which who knows how many people died and how much destruction was wrought. In Cote d’Ivoire diamonds are sanctioned, but no action has been taken against the cocoa trade which, Global Witness estimates, has generated over $38.5 million for weapons expenditure on the government side, and $50.9 million for the Force Nouvelles since 2004. We are not advocating sanctions on the cocoa trade as it is far too important to the lives of millions of Ivorians, but targeted sanctions such as asset freezes and travel bans remain a potential possibility. In the lead up to the UN brokered democratic elections in Cambodia in 1993 (at that time the most expensive UN intervention ever, at $2.8 billion) the UNSC recognised that the timber trade between the Khmer Rouge and Thai logging companies (with the active help and blessing of the Thai Government and military) was having devastating consequences for the environment in Cambodia. To address this a log export ban (crucially – not a timber export ban) was imposed through UN Resolution 792. The result of this action was an immediate proliferation of sawmills in the border region, which allowed (perfectly legal) sawn timber to be exported, with identical negative consequences for the environment. In short, Resolution 792 was useless. In early discussions about timber sanctions on Liberia the UNSC was asked to consider a log export ban – rather than a timber export ban. In short, the lessons that should have been learned from Cambodia had not been. It was probably Global Witness’ intervention that highlighted this shortcoming. The Peace Building Commission (PBC) in Sierra Leone: Incredibly, in a country that was ripped apart by a resource-fuelled war, natural resources are not part of the mandate of the PBC in Sierra Leone. Surely, if natural resources played a major role in the conflict, they will play a major role post-conflict. Whether this role is positive or negative depends on the domestic and international response to it. The 2007 G8 Communiqué on Africa says, “The illegal exploitation of natural resources is responsible for fuelling some armed conflicts in Africa.” Again, this shows confusion and muddled thinking about what a conflict resource is. Many resources traded in conflict are not illegal at all, for example timber coming out of Charles Taylor’s Liberia. He passed a law which made it perfectly legal. Also, many conflict zones are beyond the reach of any law.

International responses

A) Kimberly Process Certification Scheme

A call for an extension of the Kimberley Process (KP) – an internationally recognized certification scheme set up to prevent the trade in conflict diamonds – is often the first response of policy makers discussing international instruments to address the trade in other conflict resources such as gold and timber.

Global Witness believes that the KP is not extendable to other resources for two major reasons:

1. Political will and logistics: The KP is seen as a success story that, for an international mechanism, was implemented amazingly quickly. However, it is unlikely that the international community will devote the time, political capital and assistance necessary to create a new Kimberley Process, or monitorable subsets of the existing KP, for every conflict resource.

2. The circumstances leading to the creation of the KP were unique: There was one major private sector player, De Beers, which controlled over 60% of the global trade in rough diamonds. Diamonds are not intrinsically useful (the trade in industrial diamonds is a tiny proportion of the whole), unlike most other commercially valuable minerals. The KP was created against the backdrop of one of the most brutal and evocative conflicts - in Sierra Leone - the horror of which had captured the imaginations of policy makers and public alike.

B) Extractive Industries Transparency Initiative

Though the Extractive Industries Transparency Initiative (EITI) was not created to deal with conflict resources, the fact that it deals with resource governance and corruption makes it a useful tool to address some of the underlying problems which could lead to conflict. However, a major flaw in the EITI is that it is a voluntary instrument, and the countries that probably most need to be part of it – the most corrupt – de facto are the least likely to want to join. In addition, it is likely to be useless in the context of a major conflict as extreme circumstances make it improbable that warring factions would sign up to or to abide by the EITI.

C) Other Instruments

Other international responses include the OECD Guidelines on Multi-National Enterprises, which have proved to be hard to apply and in any event are toothless. Similarly, the Global Compact allows companies to gain kudos without seriously committing to improving their corporate behaviour, as is evidenced by examples such as Siemens, currently at the centre of a corruption scandal in Germany, and Deutsche Bank, whose Frankfurt branch contains Turkmenistan’s gas revenues – some $3 billion – which was under the control of the late President Niazov, and the fate of which is still unclear.

Both the KP and the EITI show that the international community can act together to address major issues; that is what needs to happen with conflict resources.

Global Witness campaigns led to the creation of both the KP and the EITI, and we have worked in many conflict zones; this is not corporate ego, but an illustration that we have the experience and credentials to play a role in this issue. We also know that at the beginning of any such process there is usually resistance both from within the private sector and from governments, but a few years down the line it is hard to believe that these mechanisms weren’t in place earlier.

Post Conflict Reconstruction

Post Conflict countries continue to face challenges, not least of which is that, as professor Paul Collier has outlined, 50% of them are likely to return to conflict within a decade of the ending of the previous conflict. Again, international attention to this issue is inadequate. Recent contracts signed by Mittal Steel and Firestone in Liberia were inequitable and weighted heavily against the government. These deals illustrate that some governments of resource-rich developing countries need help in negotiating with extractive companies. These deals often start with the preconception that a strong negotiating position will frighten off investors. Many governments simply cannot afford the lawyers that the companies can deploy: Lakshmi Mittal’s personal wealth is 295 times greater than Liberia’s annual budget! There should be some internationally funded Legal Assistance Centre to act on behalf of developing countries. Transparency of Access to resources is the logical next step to EITI.

Recommendations
 
1. There should be an expert grouping within the UN system to advise various bodies – including the UNSC; DPKO; PBC; UNDP; and industry - on issues such as where and how to operate in conflict and pre and post-conflict situations, and in peace-building.
 
2. The UN should create a Permanent Panel of Experts, not to replace the current model of individual panels, but to provide a coordinating body to, amongst other things, capture the institutional memory of the different panels and to maintain a pool of experts to deploy to individual panels as and when required.
 
3. A UNGA endorsement of the EITI, to give it international credibility and therefore bring countries such as China on board.
 
4. There needs to be a common understanding of what a conflict resource is – a definition if you like. A definition based around the circumstances in which a resource is traded, rather than around the type of resource or the different warring factions, would allow a coherent and timely response to different conflict situations, and would have the following advantages:It would allow the UNSC to act quickly, but without taking sides.It would not ‘judge’ good or bad resources, just the circumstances in which they’re traded.It could be based around existing humanitarian laws and sit neatly under the Responsibility to Protect.It could trigger existing international mechanisms such as targeted sanctions – it would not require new mechanisms or enforcement models.Lastly, a definition would act as a major deterrent to businesses operating or considering operating in conflict zones. Legitimate businesses carrying out usual due-diligence would be warned off from investing or trading in conflict zones, making enforcement unnecessary. Illicit trade would, of course, need to be tackled by existing legal mechanisms.
 
5. Ending impunity: currently, very few people or companies face prosecution for their activities in war zones. For example, given the scale of atrocities and the role of conflict resources in the DRC, virtually no one has been brought to trial. The Dutch prosecution of Gus Kouwenhoven for arms trafficking in Liberia was a welcome exception, but no one has been prosecuted for trading in conflict resources, because this trade is not illegal. This has to change. There need to be laws to deal with this issue, and for there to be laws, there needs to be a common understanding of what a conflict resource is – which brings us back to the need for a definition.
 
6. The UNSC needs to acknowledge that conflict resources are an issue.

7. There should be a Secretary General’s report on the issue of natural resources in conflict and a PRST.
 
8. Finally, it is essential that the international community, through the good offices of the UNSC, addresses the issue of conflict resources in a coherent way. Currently, other than the Kimberley Process, nothing has changed in the international architecture to deal with this issue. What happened in DRC could happen again tomorrow. There is nothing to stop you, me or anyone else going into a conflict zone and trading resources with warlords – essentially giving them unfettered access to the world markets; that has to change. 

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