Missing the Peace for the Trees

BY ARTHUR BLUNDELL, EMILY HARWELL — Natural resources play a role in nearly half of the world’s conflicts, but when it comes to ending wars, they’re almost always forgotten.

It has been more than a decade since warring parties signed a deal to end Liberia’s bloody conflict. Fueled by the pillaging of the country’s rich natural resources — diamonds, gold, iron, and timber — the two civil wars that raged across 14 years left more than 250,000 people dead and displaced more than 1 million others. When the final peace deal was signed in 2003, however, the resources that had sustained the war for so long were not mentioned at all. The oversight, though common, has often proved disastrous for countries trying to break free from years of violence.

According to a new report by the international nonprofit Forest Trends, which analyzed more than 800 peace agreements signed since 1945, fewer than 15 percent mentioned natural resources. Even fewer take the necessary steps to prevent these resources from being used to sustain — or even restart — fighting. It is a glaring omission considering that the U.N. Environment Program estimates that at least 40 percent of conflicts have a link to natural resources. About half of all peace agreements fail within five years, often because the warring factions exploit resources in order to fuel the return to conflict.

As globalization drives growing markets for more commodities and a changing climate upsets existing patterns of resource use, the international community must take the governance of natural resources much more seriously — simply as a matter of peace and security. Restarting resource extraction post-conflict before rebuilding broken governments not only fails to deliver on promises of a revitalized national economy — often a primary goal in rebuilding war-torn countries — but also threatens the peace. And without the safeguards of governance, unregulated extraction risks returning countries to conflict by reviving the unsustainable and inequitable practices that fueled grievance in the first place.

Of all conflicts, those associated with natural resources are twice as likely to relapse within five years. Natural resources serve as the catalyst when rebels fight for territory in order to control commodities and the associated revenues; warring parties in turn use this revenue to fuel further conflict; companies bribe corrupt politicians and bureaucrats for access to the resources; locals are often displaced by land-grabbing; and the companies themselves get involved in arms trafficking and use their security forces as private militias, which commit human rights abuses in order to maintain access to the resources.

Liberia is a classic example. As part of the U.N. Panel of Experts between 2003 and 2011 tasked with monitoring sanctions in Liberia, we witnessed the impact of the unregulated exploitation of diamonds and timber on the relapse into civil war. The Liberian Truth and Reconciliation Commission (TRC) documented how rebel groups fought to control areas rich in resources, either to exploit the diamonds and timber themselves or to extort “taxes” from the miners and loggers. They used this money to buy guns and pay fighters, and in some cases the logging companies themselves trafficked in weapons and other materiel.

Once elected, President Charles Taylor’s government forced logging companies to employ his former militia commanders as “security” — and it is alleged that these militia forcibly displaced, looted, and committed mass atrocities against local communities. The associated corruption undermined any hope of Liberia establishing functioning state institutions. Similar dynamics played out in the mining sector — the TRC documented how Liberia’s diamonds even attracted the attention of al Qaeda in 1998. For this role in fomenting armed conflict, the U.N. Security Council sanctioned the international trade in Liberian diamonds and timber.

Despite this recognition, the 2003 Comprehensive Peace Agreement only mentions natural resources in order to divvy up control in the transitional government among the warring parties. One of the rebel groups, MODEL, got control of the Ministry of Lands, Mines, and Energy, the Ministry of Agriculture, and the Forestry Development Authority. The other factions were awarded control over other state functions like the ports, petroleum import, and telecommunications — lucrative opportunities for graft. The agreement essentially treated natural resources as war booty for the combatants, an arrangement that did not bode well for good governance.

After the war, the Security Council kept sanctions in place until reforms had been established.

However, even with the U.N. Security Council behind them, maintaining sanctions to leverage governance reform wasn’t easy. Many in government and the donor community thought that immediately restarting extraction was the best way to jump-start the war-torn economy and provide low-skilled jobs, a particular concern for ex-combatants who might become spoilers of the peace. The International Monetary Fund argued that if sanctions were simply lifted, GDP growth would triple, to more than 17 percent. The pressure to get going was intense.

There were a number of reasons not to, however, among them the uncertainty associated with post-conflict countries. As former Secretary of State Colin Powell once noted, “capital is a coward” — that is, responsible investors shy away from such high-risk environments. Companies willing to take the risk often use “cost-saving” practices that degrade the environment, inflame tensions with local communities, and exacerbate corruption.

Also common in immediate post-conflict situations are speculators who lack technical expertise but take advantage of corruption and weak institutions to trade on their crony networks to get licenses without any intention of actually operating. The resultant failure to generate the expected jobs and government revenue undermines poverty reduction strategies and degrades citizens’ trust in their new government — what little trust there is after years of violence, oppression, and deprivation.

So why are resources so rarely dealt with in peace agreements or in the immediate peace building after the war is done?

The neglect is partly a question of approach (resources can drive economic growth, which in turn can create stability) but also tactics (“power sharing” over resources to entice factions to lay down their weapons). But part may also be strategic; negotiators simply consider cease-fires too fraught to deal with seemingly complex, contentious issues, preferring to kick the can down the road to the peace-building phase. They may be simply unaware of how important it is to reform how resources are managed in order to address the grievances underlying the conflict. They wouldn’t be the only ones: The first donors’ conference after the end of the war in Liberia didn’t even have resources on the agenda — even while the two commodities were still under U.N. sanction.

There is an emerging community around environmental peace building — the practice of incorporating the management of natural resources into post-conflict reforms in order to avoid a relapse into violence — but this approach doesn’t look likely to become mainstream. After conflicts end, and programs and funding abound but coordination is problematic, natural resources are often put on the back burner, behind traditional peace-building concerns of demobilization of ex-combatants, return of refugees, and security-sector reform. This kind of narrow thinking is clearly counterproductive.

There is plenty of blame to go around, however, and commercial interests can sometimes cloud the international community’s vision of the importance of resource governance reform.

Initially, the U.S. Dodd-Frank Act addressed conflict financing of rebel groups in eastern Democratic Republic of the Congo by requiring mining companies to report on the origin of tantalum, tin, tungsten, and gold, and report the minerals as “conflict free” or not. In response, the National Association of Manufacturers sued the Securities and Exchange Commission over the financial burden of such tracing and alleged that the law usurped corporate freedom of speech. The D.C. Circuit Court of Appeals agreed that such disclosure interfered with the First Amendment. Not surprisingly, in 2014, two-thirds of the companies could not even report the country of origin of their minerals. In a further effort to reduce corruption, Dodd-Frank also required oil, gas, and mining companies to report all payments made to governments. Multinationals, through the American Petroleum Institute, sued, in part because transparency could compromise contracts in Angola, Cameroon, China, and Qatar that prohibit such disclosures.

The problem continues to flummox negotiators, but the lessons of past failures can help avoid the pitfalls that derailed other peace deals.

In Myanmar, a successful transition from military rule hangs on the recently signed Nationwide Cease-fire Agreement and the promised political dialogue. Natural resources, or at least the reform of their governance, are virtually absent from the 15 individual cease-fire agreements negotiated with ethnic groups so far. According to the Myanmar Peace Monitor, a project run by Burma News International to track the peace process, only five of the 15 agreements address natural resources at all; and in all five cases, it is only to allow the warring parties to continue their exploitation and revenue collection.

The government has reportedly established, funded, and armed paramilitary groups in the ethnic border regions who also control the illegal commodity trade. Neither these paramilitaries, nor those ethnic armed groups who have laid down their arms in exchange for resource businesses, are party to the ongoing peace negotiations. But their involvement in resource extraction, and the impacts on local communities, are important elements of the self-determination cause of the ethnic groups. Peace negotiators would do well to examine the underlying grievances behind the conflicts and whether agreements that delay — or outright ignore — reform adequately address those grievances over the long term.

Myanmar should address these issues within the framework of the cease-fires’ dialogue. Although there are no targeted U.N. sanctions to provide leverage for such reforms, the government is likely to be motivated by international pressure. And so investors, consumers, and donors alike should encourage such reform.

The international community must own the issue of natural resources in post-conflict countries, in particular where global consumption plays a role in creating demand for these commodities. The default should be that cease-fire negotiations address the link between resources and conflict, if only to establish clear benchmarks on how and when these issues will be addressed post-conflict. Framing natural resources in peace agreements simply as war booty, and in peace building solely as drivers of growth, does not deliver on promises of either durable peace or a revitalized national economy.

Cease-fires may not be the place to deal with the reform of the management of natural resources directly, but peace building surely is. And without durable peace and security, development will remain a far-off dream.

Arthur Blundell is an advisor to Forest Trends and partner at Natural Capital Advisors. He is an advisor to the Indonesian Corruption Eradication Commission and led the Panel of Experts on Liberia monitoring sanctions for the U.N. Security Council.

Emily Harwell is an advisor to Forest Trends and partner at Natural Capital Advisors. She is a human rights investigator and also served as a natural resource expert to the U.N. Panel of Experts on Liberia and lead consultant on the World Bank’s Forests and Fragile States initiative.

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