Search

1101. Beneath the Surface: The Case for Oversight of Extractive Industry Suppliers

Author:
Robert Pitman and Kaisa Toroskainen
Publication Date:
09-2020
Content Type:
Special Report
Institution:
Natural Resource Governance Institute
Abstract:
Large oil, gas and mining projects are usually associated with a few big names such as Shell, Exxon, Rio Tinto, Gazprom and Codelco. These are rights holders—companies that receive licenses from host governments to extract resources. Typically, however, lower-profile companies do much of the work to take natural resources out of the ground. These are suppliers—companies that provide the goods and services that make extraction happen. They range in size from multibillion-dollar international conglomerates to specialized or local firms that may only have a handful of employees. This report makes the case for greater oversight of extractive industry suppliers. It explains the economic significance of extractive industry suppliers and identifies the main stakeholders involved in supplier governance. It considers policy areas where the impacts of poor supplier governance play out and reviews how governments, rights holders, state-owned enterprises (SOEs) and suppliers are beginning to share information on the economic impacts of suppliers, how these disclosures feature in global transparency and reporting initiatives and what more can be done.
Topic:
Corruption, Natural Resources, Tax Systems, Coronavirus, Industry, COVID-19, and Revenue Management
Political Geography:
Global Focus

1102. The Practice and Potential of Blockchain Technologies for Extractive Sector Governance

Author:
Natural Resource Governance Institute
Publication Date:
09-2020
Content Type:
Special Report
Institution:
Natural Resource Governance Institute
Abstract:
Important questions are being raised about whether blockchain technologies can contribute to solving governance challenges in the mining, oil and gas sectors. This report seeks to begin addressing such questions, with particular reference to current blockchain applications and transparency efforts in the extractive sector. It summarizes analysis by The Governance Lab (GovLab) at the New York University Tandon School of Engineering and the Natural Resource Governance Institute (NRGI). The study focused in particular on three activity areas: licensing and contracting, corporate registers and beneficial ownership, and commodity trading and supply chains.
Topic:
Science and Technology, Governance, Currency, and Blockchain
Political Geography:
Global Focus

1103. Holding to Account: How Publishing Facts about Foreign Corruption Creates Accountability

Author:
Aaron Sayne and Melanie D. Reed
Publication Date:
01-2020
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
The complex, secretive nature of foreign corruption calls for a collaborative, all-hands-on-deck approach. Corrupt actors go to great lengths to hide their wrongdoing, using layers of legal entities, transactions, secrecy jurisdictions and middlemen. No one response can detect and prevent every bad act, and different anticorruption actors have their own unique interests, mandates and abilities. In many cases, they may struggle even to learn the facts of what went wrong. Prosecuting a corruption crime generates reams of valuable information. This can include the names of bribe takers and payers; the industries, countries and public institutions involved; how the proceeds of crime changed hands; and who facilitated or turned a blind eye. Who should get to see this information? Thought leaders on anticorruption, from Transparency International (TI) to the Organization for Economic Cooperation and Development’s Working Group on Bribery (OECD WGB), have long endorsed greater transparency in foreign corruption cases. They argue, for example, that access to information raises awareness, gives guidance to anticorruption practitioners, encourages cooperation with prosecutors and boosts confidence in law enforcement. Conversely, opacity in corruption cases can weaken the deterrent value of prosecutions, open doors for prosecutorial misconduct and thwart efforts to make victims whole. These concerns are particularly keen in cases that settle via tools like deferred prosecution agreements (DPAs) or plea bargains. Many governments share evidence from corruption cases confidentially, through formal legal instruments and close working relationships. But how does public disclosure of facts from corruption cases, whether by courts or other law enforcement bodies, aid the broader fight against corruption? Put differently: At a time when enforcement of anticorruption laws remains low in many countries, could more transparency help anticorruption efforts by regulators, companies, the media, civil society and others? To answer this question, the authors of this briefing analyzed materials from foreign corruption cases that have arisen since the inception of laws banning foreign bribery. During the past four years, they also conducted over two dozen interviews with experts government, the private sector, civil society and the press. From this work, they found instances in which other anticorruption actors used published facts from court cases to do their jobs more effectively. Although they undertook this research as part of the Natural Resource Governance Institute’s (NRGI’s) programming aimed at reducing corruption risks in the oil, gas and mining sectors, they did not limit themselves to cases in the extractive industries. Accordingly, their findings and recommendations apply broadly to corruption in other sectors.
Topic:
Corruption, Government, Economy, and Accountability
Political Geography:
Global Focus

1104. Building a Sustainable Electric Vehicle Battery Supply Chain: Frequently Asked Questions

Author:
Patrick Heller, Ethan Elkind, and Ted Lamm
Publication Date:
04-2020
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
The global transition from fossil fuel-powered vehicles to electric vehicles (EVs) will require the production of hundreds of millions of batteries. The need for such a massive deployment raises questions from the general public and critics alike about the sustainability of the battery supply chain, from mining impacts to vehicle carbon emissions. Growing demand for the mineral inputs for battery production can provide an opportunity for mineral-rich countries to generate fiscal revenues and other economic opportunities. But where extraction takes place in countries with weak governance, the benefits expected by citizens and leaders may not materialize; in some cases extraction might even exacerbate corruption, human rights abuses and environmental risks. Many EV proponents and suppliers are aware that supply chain governance problems pose a challenge to the evolution of the EV industry, but outstanding questions remain about how these challenges materialize. This brief, jointly published by UC Berkeley School of Law’s Center for Law, Energy & the Environment (CLEE) and the Natural Resource Governance Institute (NRGI) provides basic information on the EV battery supply chain and key battery minerals, such as cobalt and lithium, and addresses the following questions: What does the supply chain for EV batteries comprise? How do carbon emissions from EVs compare to traditional internal combustion engine (ICE) vehicles? What are the most significant challenges in managing the mineral extraction necessary for the EV supply chain, and what sustainability and human rights initiatives apply?
Topic:
Civil Society, Corruption, Government, Human Rights, Natural Resources, Governance, Regulation, Legislation, and Supply Chains
Political Geography:
Global Focus

1105. Coronavirus, Oil and Latin America: The Urgency of Economic Diversification and Energy Transition

Author:
Carlos Monge
Publication Date:
08-2020
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Key messages: Companies are demanding temporary bailouts, requesting that governments subsidize them with breakeven prices over sale prices, and allow them to postpone tax and royalty payments and agreed investments. Such actions may be necessary to preserve jobs and ensure domestic energy supplies. Governments are considering lowering social and environmental standards, fast tracking procedures and providing long-term subsidies to support ongoing projects and to attract new investments. For an industry already facing its twilight, these actions are not justified. Governments must urgently move ahead with economic diversification and energy transitions to ensure the availability of jobs, energy and fiscal incomes that the oil industry currently provides.
Topic:
Energy Policy, Oil, Diversification, Renewable Energy, Coronavirus, and COVID-19
Political Geography:
Colombia, South America, Central America, Mexico, and Peru

1106. Coronavirus, Mining and Latin America: A Baseless “Race to the Bottom”

Author:
Carlos Monge
Publication Date:
08-2020
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Mining companies are asking governments to make consultation and environmental procedures more flexible to mitigate production risks and attract new investments. However, there is no real reason to slacken regulations in order to promote mining in Latin America. Conversely, the region should strengthen these standards to prepare for a possible new mining cycle fueled by the transition to clean energy. In the event of a new mining cycle, governments should safeguard against overreliance on commodity exports and the use of fossil fuels. Instead, governments and companies should explore ways in which the mining sector can contribute to economic diversifications and energy transitions. Demand and prices for minerals produced in the region have fallen as a result of the global recession. Logistical issues resultant from pandemic-related lockdowns have slowed internal production. Consequently, mining taxes and royalties will likely fall this year. Prices have not fallen enough to threaten the commercial feasibility of current projects, the global investment budget remains robust, and the region is attractive to mining investors. Furthermore, the global transition to clean and sustainable energies will most probably increase the demand and prices for the critical minerals (copper, silver, lithium and others) produced in the region.
Topic:
Energy Policy, Commodities, Mining, Coronavirus, and COVID-19
Political Geography:
Latin America

1107. A Race to the Bottom and Back to the Top: Taxing Oil and Gas During and After the Pandemic

Author:
David Manley, David Mihalyi, and Colin Fleming
Publication Date:
10-2020
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Earlier this year as people around the world responded to the coronavirus pandemic, their demand for oil tumbled. At the same time, OPEC and Russia initially failed to agree to coordinate supply cuts. Consequently, the price of a barrel of Brent crude oil fell from $60 in December 2019 to $20 in April 2020. As of this publication, the price is $43. If the price stays low, and if oil executives expect the price to remain low, companies may lobby governments to reduce taxes and other costly regulations. Payments to governments are often larger than costs for a company, so there is pressure on governments to reduce taxes to keep projects viable. This briefing considers the following key questions: Where will the oil price go next? What is the impact on currently operating projects, undeveloped projects, and those that are yet to be discovered? How should governments respond in changing oil and gas taxes? Will governments try to “race to the bottom,” but then lose a race back to the top? Key messages: There’s no certainty over future prices. Some rise is likely in the next few years, even if an energy transition results in a structural decline in the oil price in the longer-term. Governments must consider this uncertainty and probable rise when taxing oil and gas. Tax breaks on most currently operating projects are likely a waste of public money. Some governments may be pressured into reducing tax on projects awaiting development. But they must identify which projects would become viable with lower taxes, and which do not need a tax break. If in doubt, governments should consider whether a project that needs a tax incentive really will provide value for the country. For most countries, relative to total oil and gas produced, the production from projects that could be delayed or cancelled is small. But not so for the “new producer” countries like Senegal and Guyana. Changing taxes to make a country more attractive has the most impact before companies have invested – e.g., in attracting investment in licensing rounds. But setting low taxes now could force a government to raise taxes later if prices rise again. If a tax break is unavoidable, governments could use a “sunset clause” to limit the duration of the tax break. Ideally, governments should set progressive tax regimes that respond to changes in profit. But as many taxing authorities struggle to measure profit, governments could set simpler tax regimes based on sales revenue or prices – but must prepare to change tax rates in the future, and be prepared for the repercussion for a government’s credibility with investors. Governments should disclose contract terms detailing tax changes, tax exemptions, incentives and estimated break-even prices of projects to help government auditors, local think tanks, and the public check and support tax policy decisions.
Topic:
Oil, Natural Resources, Gas, Tax Systems, Commodities, Coronavirus, and Revenue Management
Political Geography:
Global Focus

1108. What next for NATO? Views from the North-East Flank on Alliance Adaptation

Author:
Michal Baranowski, Linas Kojala, Toms Rostoks, Kalev Stoicescu, and Tony Lawrence
Publication Date:
06-2020
Content Type:
Commentary and Analysis
Institution:
International Centre for Defence and Security - ICDS
Abstract:
NATO leaders have invited Secretary General Jens Stoltenberg to present proposals at their next Summit for measures to reinforce Alliance unity, increase political consultation and coordination between Allies, and strengthen NATO’s political role. To support his reflection process, the Secretary General has appointed a group of ten experts. Only one of these represents the 14 of 30 Allies who have joined NATO since 1999. In this policy paper we set out issues, concerns and expectations about NATO’s future adaptation from the perspective of the three Baltic states and Poland, based on a series of interviews with several senior officials and members of the expert community in each of the four states. While not identical, the views of our interviewees were close. They broadly agreed that while NATO faces a multitude of threats, Russia is by far the most serious. In response, NATO should prioritise—and enhance—its core task of collective defence. However, they recognised, it is essential for NATO to maintain a balance between the security interests of all Allies. They support the 360-degree approach and are ready to back and participate in efforts to deal with threats from other regions too. NATO should also retain its core tasks of crisis management and cooperative security. The Covid-19 pandemic suggests that NATO should re-calibrate the crisis management task to better reflect the need for collective support to the civilian authorities in large-scale efforts to deal with crises on Alliance territory. Our interviewees were generally cautious about otherwise expanding NATO’s roles and responsibilities, arguing that the Alliance should consider where it can add value, while avoiding overreach. They saw, for example, only a modest role for NATO in dealing with the challenge from China. They were, however, supportive of the Alliance developing further its global network of partnerships, both with states such as Australia, Japan and South Korea, and with other international organisations, notably the EU. NATO should also continue its cooperative security efforts with a focus on states in the immediate neighbourhood. And while further NATO enlargement is unlikely at present, the door should certainly remain open. Interviewees in all four states expressed concerns about the tensions within the Alliance and the lack of US leadership. While these tensions persist, it is probably unwise to consider drafting a new strategic concept. Nonetheless, the internal challenges might be eased if the Allies are prepared to use NATO to a greater extent as forum for consultation on a wide range of security issues.
Topic:
Defense Policy, NATO, Regional Cooperation, Alliance, Deterrence, and Interview
Political Geography:
Poland and Baltic States

1109. Volunteers in Estonia’s Security Sector: Opportunities for Enhancing Societal Resilience

Author:
Ramon Loik
Publication Date:
06-2020
Content Type:
Special Report
Institution:
International Centre for Defence and Security - ICDS
Abstract:
This policy paper assesses the involvement of volunteers acting in the public interest under Estonian law in the development of key characteristics of a broad security concept and reflects the main ongoing discussion points for widening their potential for ensuring collective security and public safety.
Topic:
Security, National Security, and Resilience
Political Geography:
Estonia

1110. Stabilising the Sahel. The Role of International Military Operations

Author:
Kalev Stoicescu
Publication Date:
07-2020
Content Type:
Special Report
Institution:
International Centre for Defence and Security - ICDS
Abstract:
The key question of this analysis is whether EU and/or NATO allies, including Estonia, would be willing and able to continue to support international efforts in Sahel (including military operations and missions – MINUSMA, EUTM and Barkhane), in particular following the Covid-19 pandemic. It is addressed to civilian and military decision makers and experts, especially in the countries that contribute to international military operations and missions in the Sahel.
Topic:
Defense Policy, International Cooperation, Terrorism, Military Affairs, and Counter-terrorism
Political Geography:
Africa and Sahel