What’s next for Latin American civil society as the supercycle of high commodity prices recedes in the rear-view mirror? And what are the most interesting trends in the extractives sector in the region?
The Natural Resource Governance Institute (NRGI), the Ford Foundation and partner organizations like the Red Latinoamericana sobre las Industrias Extractivas and Foro Nacional por Colombia focus on these questions daily. A regional forum on extractive industries on Monday and Tuesday in Bogotá probed complex sector dynamics and shifting global transparency and accountability trends, and their drivers.
Pro-extraction regimes throughout Central and South America have centralized decision-making and pushed development through oil, gas and mining, NRGI Latin America director Carlos Monge said. Civil society’s input, meanwhile, has often been disregarded in the process.
Monge said extractives investments in Latin America continue to expand despite commodity price declines. Production has also climbed. This isn’t by accident: a set of policies throughout the region have lowered environmental and social standards in favor of big investments. This process, often known as a “race to the bottom,” favors investment over other priorities and is common throughout the region, as well as in sub-Saharan Africa, Southeast Asia and Central Europe.
Extractives decision-making is increasingly centralized—civil society and local decision-makers have less say in development choices because big companies deal directly with national governments. Aspects like free prior and informed consent consultation for indigenous populations becomes subordinate to the investment promotion policies.
Meanwhile, the movement toward transparency in extractives has been materially affected by political developments in the United States, NRGI president and CEO Daniel Kaufmann said.
Following U.S. President Donald Trump’s election in November, a new kind of state capture is developing, Kaufmann said. What this means for civil society around the world is a probable shift to a “super-extractivism” coming from the United States.
“Super-extractivism” comes at the expense of environmental safeguards and transparency, according to Kaufmann. With the upending of a U.S. Securities and Exchange Commission rule implementing the bipartisan Cardin-Lugar extractive industries payment transparency provision, the U.S. has officially stepped away from its leadership role.
On a global scale, however, Kaufmann said there are reasons to remain hopeful. The global transparency movement is registering wins in beneficial ownership, environmental and social disclosures; anticorruption; and access to information. A recent NRGI report shows extractive contract disclosure laws are becoming a trend, with 22 Extractive Industry Transparency Initiative (EITI) countries having enacted legislation in that regard. More citizens than ever now have access to the contracts and agreements that govern the extraction of resources that are rightfully theirs.
Going forward, forum participants said, it is crucial that EITI, the Open Government Partnership and the Economic Commission for Latin America and the Caribbean help advance civil society demands for policies that ensure real participation for the populations affected by extractive activities.
Alonso Hidalgo is a Latin America program assistant with the Natural Resource Governance Institute (NRGI).