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Paul Collier backs European transparency law
Guest post from Paul Collier, author of ‘The Plundered Planet: How to Reconcile Prosperity With Nature’ and member of ONE’s Africa Policy Advisory Board.
The ‘resource curse’ is one of the most persistent paradoxes of international development. For decades the natural resources of poor countries have been plundered: the few expropriating what should benefit the many, and the current generation squandering what should also benefit future generations. The current global boom in commodities provides many poor countries with an unprecedented opportunity to escape poverty, yet the default option is for history to repeat itself. One of the most pressing issues in the fight against global poverty is how to prevent this repetition.
Repetition is not inevitable. For example, Germany learnt from hyperinflation. But to avoid a repeat of the resource curse the pressures for plunder must be faced down. Some of the necessary actions must be taken by the governments of resource-rich countries, but we ourselves need to take complementary actions.
Fortunately we are now at a moment of opportunity, and Germany’s support will be crucial. The European Commission has published proposals that would oblige all European extractive industry companies to become more transparent in their operations abroad. If enacted, these companies will have to publish the payments they make to the governments of every country where they operate. The legislation aims to go at least as far as ground-breaking US legislation that was passed in 2010. This means that a global standard for legally binding transparency in the extractive industries is within reach for the first time. The French President is in full support of this initiative. Even Britain, where more extractive companies’ are headquartered than in any other EU-member state, used a G20 finance ministers meeting to express unequivocal backing. It is unsettling that the German government, a champion of extractive transparency in years past, is silent at this historic moment.
The draft disclosure requirements will provide the perfect complement to actions taken within the poor countries themselves. Citizens need the data that would be made available by these companies to better hold their governments accountable for the money they receive for the country’s natural resources. Over 600 civil society organisations worldwide have signed up to the ‘Publish What You Pay’ coalition. Citizens, many of whom have risked arrest to fight embezzlement, will be newly empowered with the tools they need to force positive change. As the Arab Spring so ably demonstrated, ordinary citizens care deeply about transparent and accountable governance.
Of course transparency is only a means to an end. The prize is the better use of huge resource revenues, enabling a dramatic improvement in social and economic development. In 2008 exports of oil, gas and minerals from Africa were worth roughly nine times the value of overseas aid ($393-billion versus $44-billion), creating considerable government income through licences and taxes. In many countries those revenues account for the vast majority of government revenues – more than 80% in the case of Angola. Even if enhanced transparency were only to improve the efficiency of natural resource revenue spending incrementally, it would easily yield more than Germany’s entire aid program for sub-Saharan Africa.
In a time of economic austerity across Europe policies like these which help African governments to mobilise their own resources for development are even more important. Aid budgets are now under pressure. In the long-run, fostering greater reliance on taxes can help develop cohesive states and reduce aid dependency.
The discussions on the detail of the new European legislation are now critical. For the new legislation to effectively empower citizens in situations like this, it needs to include the disclosure of financial information at the project level. Only these disaggregated figures give citizens and local communities the information to hold government accountable. In addition, financial information only at the country level will not help citizens curtail the official under-pricing of national assets, such as the case of the Democratic Republic of Congo where contracts have officially been sold for a sixteenth of the market price – an indication that kick-backs are taking place.
Project-level disclosure is also a way to improve the functioning of the natural resource market and therefore makes good business sense: wide discrepancies in the valuation of assets can be hidden by aggregating data at the country-level. A more efficient market system can operate if this secrecy ends. It is no coincidence that major investors successfully joined hands with civil society to have project –level disclosure included in the ground-breaking US legislation.
The good news is: the current draft of the European Commission includes project-level disclosure and both the French President Sarkozy and the British Premier Cameron support this critical detail.
Germany has been a strong champion for extractive transparency ever since the Heiligendamm G8 summit. This is evidenced by the long-standing support Germany gave to EITI, a voluntary multi-stakeholder transparency initiative that has worked well in resource rich countries that showed the will to improve their transparency. However, it is for those countries which ignore EITI that the new legislation is needed and Germany can reinforce its role as an international leader on extractive transparency by supporting the new law.
But while the German government has indicated its general support for this EU legislation some European partners have noticed that a number of German ministries remain sceptical of the key feature described above: project-level disclosure. In line with its excellent track record on improving extractive transparency, Germany should now endorse the current strong legislation. Improved accountability in the natural resource sector leads to more stability in resource rich countries and better markets – both central aims of the German resource strategy.
We are now at a rare moment: we know that some legislation will be enacted. But as with all legislation, the devil is in the detail. Lobbyists for the interests of continuing plunder and irresponsible business practices are attempting to dilute key features while paying lip-service to noble objectives. If we permit the lobbyists to win we become complicit in frustrating change: remember, the default option is for the current resource booms to be the biggest missed opportunity for poverty reduction in history. Germany needs to decide now whether it is happy to be complicit in frustrating this chance for change or if it wants to join the fight against a repetition of the hugely destructive resource curse.
This post first appeared in the Handelsblatt newspaper.
ONE final push
As leaders gathered in France today for the G20 Summit of wealthy nations, they brought with them the voice of hundreds of thousands of ONE members.
We’ve been campaigning hard this month to highlight the food crisis in the Horn of Africa and call on world leaders to ensure they break the cycle of famine. Our petition has had a phenomenal response now totalling over 400,000 signatures. So we wanted to make sure our members’ voices were heard loud and clear in the corridors of power.
On Monday as President Sarkozy prepared to leave Paris to host the G20 Summit in the south of France, we broadcast a huge video projection on the side of the city’s iconic Hotel De Ville. The film loop included the powerful celebrity F-word video “famine is the real obscenity”, the message that by then, over 360,000 ONE members had called on leaders to take action, and a scrolling list of members who had signed the petition. Strong media coverage of the event ensured the message was seen far and wide across France.
On Tuesday a group of ONE members joined our European Director delivering the campaign to the UK Government. With the G20 looming and a surge in the number of people signing up, the petition total had jumped to a staggering 400,000 by that afternoon – requiring a large trolley to deliver it!
On Wednesday ONE’s team in Berlin, pictured here in their “Nicht Mehr Hungrig” (“Hungry No More”) t-shirts outside the Chancellery Building, handed in the petition to the German Government. Along with pressure from our staff and members across the United States, this ensured the leading G20 powers have felt the pressure to act going in to today’s Summit.
We’ll be updating here about the Summit’s progresses, and stay tuned for a post early next week giving an overall assessment.
Remind Germany to Fight Poverty
On September 22, the Pope will visit Germany to meet the Chancellor and give a speech at the German Bundestag, and we must ask him to remind the German government to keep its word and increase the fight against poverty.
As early as 2006, the Pope stressed to the German Chancellor the importance of poverty reduction, saying: “…The goal of eliminating by 2015 the extreme poverty is one of the most important tasks of our time…this goal is inseparably linked to achieving world peace and global security.”
The current famine in the Horn of Africa shows how desperately we need investment in development — to save lives in the present crisis and to prevent future famines. And the Pope’s word can make a difference.
Regardless of your faith, please ask the Pope to remind the German government of its commitment to the people living in poverty when he visits Germany on September 22.
You can take action (in German) on the ONE.org/de website, or (in English) on the Care2 website.
Sharing the Proof in Germany
Last week, Living Proof was finally launched in Germany. Living Proof focuses on the success stories and the amazing progress we can see thanks to smart aid – because despite all the bad news we hear from Africa and other developing countries, there is real progress in the fight against extreme poverty! We have strong evidence and proof for that – and we want to share this “Living Proof” throughout Germany. To this end, we have selected 20 amazing Youth Messengers, who will help us do just that over the next few months. The messengers are from all over Germany, extremely committed and many of them have even been to Africa and seen the challenges and successes for themselves.
We are very proud that Federal President Christian Wulff agreed to serve as patron of this program. On the occasion of the German Living Proof launch, President Wulff invited the Youth Messengers to “Bellevue Castle”, where they had the chance to meet the President, his wife, and – last but not least – Bill Gates. The President praised the commitment of the Youth Messengers and the positive outlook of Living Proof. Bill Gates asked the Youth Messengers to share the proof with as many people as possible, and to find creative ways of doing this.
Right after this exciting meeting the Youth Messengers joined Bill Gates for a photo session at the famous Brandenburg Gate. Here, our Youth Messengers were in great demand of the media. Many of them were interviewed and seized the opportunity to share the proof with the readers out there.
After this photo stunt, the Youth Messengers attended the Transatlantic Partnership Award Ceremony in honor of the Bill & Melinda Gates Foundation at the Ritz-Carlton. Bill Gates accepted the award on behalf of the foundation and gave a fascinating speech filled with facts, facts, facts – and featuring a very moving story of an African mother who lost her baby to a pneumonia, an easily preventable disease. Since then, she works with her community to ensure that mothers have their babies vaccinated on time. Indeed, between 2000 and 2009 the death of 5.4 million children was prevented thanks to the effective vaccination programs of the Global Alliance for Vaccines and Immunization (GAVI). Really impressive!
In the afternoon, our Youth Messengers participated in a workshop in which we trained them for their upcoming tasks. Renate Bähr, director of our partner-NGO German Foundation for World Population, spoke about challenges and progress regarding the Millennium Development Goals. MP Thilo Hoppe talked about the role of the German parliament in shaping Germany’s development policies and financial contributions. The Youth Messengers were also invited to visit the Development Ministry and meet with Deputy Development Minister Hans-Jürgen Beerfeltz. He was very proud to report that earlier that day the Development Ministry and the Bill & Melinda Gates Foundation had signed a cooperation agreement to ensure that the Global Alliance for Vaccines and Immunization gets more resources to continue and further amplify their successful work. Last but not least, our Youth Messengers were trained by Julius van de Laar, a leading campaigning expert, on how to combine online and offline tools to share the proof!
As you can imagine, at the end of this long and exciting day the Youth Messengers (and the ONE team) were quite exhausted, but also highly motivated – because this was just the beginning! The actual work starts now, and our Youth Messengers are already organizing Living Proof events and activities to reach as many people as possible. We will keep you posted on Living Proof in Germany.
Homeward bound
How to sum up the last three days in Europe?
Stamina.
Not mine, but Bill Gates’… It’s unreal. He flew in overnight on Sunday, and in just two and a half days travelled to three cities, delivered three powerful Living Proof presentations, lobbied Presidents, Chancellors, and Ministers, gave numerous media interviews and rallied activists. He is a testament to the ability of a committed person to change the world. Of course, he has a few more resources at his disposal than most – but all the more impressive to think he could just be sat on a yacht sipping down piña coladas.
As I expect he himself would say however, Bill Gates isn’t what the trip should be about. What’s important is the impact, did we make a difference? Well, there have already been impressive outcomes from this visit, including France, Germany and the European Commission pledging to increase their funding for vital vaccines. This extra support will save thousands of children’s lives and free up health systems in developing countries to build healthier, more productive communities.
However, the news yesterday on broken promises shows us how fragile our gains can be and reminds me why this is just the start of our Living Proof campaign…
So, if there is one thing you do today please pass on some Living Proof to a friend, colleague, politician, or loved one (you can find plenty of food for thought on our new website), or simply use the widget below, and encourage them to do the same.
As my grandmother always said you catch more bees with honey than you do with vinegar…
Youth Messengers Share the Living Proof in Germany
This morning I travelled with 20 ‘ONE Youth Messengers’ to Bellevue Schloss, the official residence of the German President, to meet with President Wulff and Bill Gates and launch a new programme to Share the Proof with other young people in Germany.
ONE Youth Messengers
The Youth Messengers are a truly inspiring group – many have travelled to Africa and seen first-hand the impact smart aid is having on the ground – and Bill encouraged them to use their long-term vision, to be creative and to get the word out. I can’t wait to see how they get on in the days and weeks ahead.
I also want to continue on a theme I began last night, about the unexpected. This morning I was reminded that there are people who work in politics who care just as passionately as any of us about the injustices of extreme poverty. Take Georg Schmidt, the German President’s Head Africa Development Policy. Now, at this point I have to admit that my German is a little sketchy, but he really was extremely compelling – sharing his own experience of Africa, having lived in Mali for three years, and the positive progress he had seen on the ground. He wasn’t jaded and he still had the fire in his belly (in a buttoned up way), which we hope he will continue to use to fight on behalf of the world’s poorest people.
Bill Gates and ONE members in Berlin
After the meeting it was on to Berlin’s famous Brandenburg Gate for the unveiling of my favourite Living Proof artwork yet. It was great to see such an important message flanked by ONE members who will ensure other people get involved and that together we share the proof.
The voice of over a quarter of a million ONE members delivered to the German Government
Over a quarter of a million ONE members have spoken out for a world in which no child is born with HIV by 2015. Last month, our British colleagues delivered the signature to the British development minister Andrew Mitchell, and last week it was Germany’s turn!
We delivered the signatures to Gudrun Kopp, State Secretary at the Development Ministry. She thanked ONE members for taking action and promised that the development ministry will pay special attention to mother and child health. She announced that the target group of women and mothers will be considered more strongly in programs supported by the German development ministry. In addition the ministry wants to deploy more ambulant health workers and train them as midwifes, to make sure that women in rural areas have better access to health services.
Making a nod to the upcoming decision about the German development budget for 2012, the State Secretary stated that the development ministry wants to use more aid more effectively in order to improve the health situation of mothers and children in developing countries. As ONE, we can second this. It’s an easy equation: more aid + more efficiently = more saved lives.
The German ONE team will now monitor closely if and how the development ministry makes good on these promises. We’ll keep you posted!
You can check out more pictures from the handover on the German ONE Facebook page.
Touring with Alive & Swingin’
Have you ever heard of Xavier Naidoo, Michael Mittermeier, Rea Garvey and Sasha? No? Well, then you are obviously not from Germany, because these four are really BIG in Deutschland.
Normally, they perform solo, but a few weeks this year they joined forces and went on tour together, playing 19 completely sold out shows in Germany, Austria and Switzerland. And they invited ONE to join them and sign up new ONE members on the tour. So we packed our bags…
The show was designed as a tribute to the Rat Pack, the famous group of actors from the 1960s including Frank Sinatra. It was an extremely entertaining mix of the all time classic swing songs and Michael Mittermeier’s hilarious comedy. Appropriately enough, the title of the tour was Alive and Swingin’ – and this inspired our message. We used the tour to spread the word about the millions of people who are alive today thanks to investments in smart aid. Most of the time, we tend to focus on problems and challenges, but it’s equally important to remind ourselves of the successes in the fight against extreme poverty – that’s what gives us energy and encourages us to keep going.
Now the tour is over, and we want to thank the artists for taking us along with them. Last but not least we say Dankeschön to our fantastic volunteers. They did a great job at spreading the good news and signing up new ONE members in the fight against extreme poverty
Check out our pictures of our volunteers at the Alive & Swingin’ tour
Transparency and extractive industries – Chances for development or a resource curse?
Anna Nordmann from the ONE team in Germany reports back on an event held recently in Berlin.
Transparency in the extractive industries. It’s a topic that is quite specific and complex. But fortunately the invited experts and politicians at ONE’s event at the Berlin-Brandenburg Academy of Sciences last month were able to provide some valuable insights.
More than 140 guests were told by State Secretary Pfaffenbach from the Ministry of Economy and Technology about steps the German Government has already taken in the field of transparency: Germany supports the Extractive Industries Transparency Initiative (EITI) and is also pushing forward the transparency issue at the EU level. As an example he mentioned the certification process of tropical timber.
Mr Pfaffenbach also praised ONE as being a driving force behind transparency initiatives, as well as compulsory transparency regulations along the lines of those in the US. He said it was still uncertain however whether Germany will adopt the US model on a one-on-one basis since the discussion process was still in the early stages of development. But despite this, he said that he believes that steps towards legally binding legislation will certainly happen. As you can imagine, hearing this from the State Secretary made the team from ONE very happy!
But why is transparency so important? Professor Dr. Reisen, from the OECD Development Centre, explained that countries with little resources often prosper while those with huge commodity resources are economically depressed. Why is this? The truth is that money from commodity trade often stays in the hands of corrupt politicians and is not being spent on the countries’ development. By publishing processes and payments, corruption could be prevented, says Prof. Reisen. But he goes one step further: He calls for a determination by independent appraisers of the market value of exploration ventures, in order to identify license payments that are too small. If the license payments are extraordinarily small, it is very possible that bribes are flowing through other informal channels.
Fortunately, Dr. Stormy-Annika Mildner, from the German Institute for International and Security Affairs – SWP, summarized the “Cardin-Lugar-Amendement”, the US-law that came into force in summer 2010. Concretely, this means that every commodity company listed on the US stock market is obliged to publish payments to the governments of those countries where resources are exploited.
In the debate on transparency, many businesses often raise the argument that transparency initiatives are counterproductive for the development of commodity rich countries, because companies might back away from investing in them. The experts on our panel did not see this danger however. Joseph Williams from Publish What You Pay, a global network of organisations that has been campaigning on this issue for years, made the point that investors share this interest in extractive industry transparency as they will be better able to assess risk in the highly volatile natural resource sector. As far as companies are concerned Shell supports, in principle, a ‘fit for purpose’ mandatory global reporting rule for all companies across the globe. Shell is listed on the US stock market and therefore will have to comply with the new US law. For competitors who are only listed on European stock markets this does not apply yet.
Overall the evening offered many insights and I’m curious to see what will happen next in Germany in the coming months. We’ll keep you posted.
German development assistance receives a check-up
Approximately every five years the OECD Development Assistance Committee (DAC) puts its member states’ development assistance practices to the test. And this year it was Germany’s turn to receive the DAC Peer Review. Starting in early spring experts from Australia, UK and the OECD have studied German development policies, talked to decision makers, and interviewed aid recipients in Zambia and Morocco. Then they sat down with the development ministry to compile a final report including concrete suggestions on how to improve German development assistance.
First up the good news: Eckhard Deutscher, head of the OECD-DAC, confirmed that Germany had indeed started a critical reform process: The number of partner countries had been reduced from 84 to 57 to allow for better division of labor and focus. And the plan to merge the implementing agencies InWEnt, GTZ and DED in a new entity was a “step in the right direction”.
However, the report also notes that of Germany’s bilateral aid only 40% went to the 57 partner countries. The peer review is therefore critical of the continued strong support of large emerging countries such as China or India. Africa in particular had barely benefited from increases in bilateral funds – out of the 50% that were promised only a fraction had actually reached the continent. ONE had come to the same conclusion in the 2010 DATA Report.
And the OECD is worried that Germany might not reach the target of aid as 0.7% of Gross National Income by 2015. So they’re suggesting Germany commit to a timetable to still reach the goal. The UK could serve as a model here. Only this year the new British government announced how – despite the current financial situation – they intend to reach the 0.7% goal by 2013.
The government in Berlin has itself maintained that increased aid effectiveness was among the issues they wanted to focus on during their term of office. In 2011 donors will be meeting in South Korea to discuss whether development assistance had in fact improved enough since the Paris Declaration was signed in 2005. Until then the German government should prove that increased effectiveness is indeed dear to its heart. With the new DAC Peer Review they have now been provided with a blue print.
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The International ONE Blog is a daily log of the anti-poverty movement. The site is operated by ONE staff, with guest contributions from ONE volunteers, members and allies.
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TAGS: Africa, Corruption, European Union, Germany, Transparency