Implications for conflict prevention and termination

Abstract A generous endowment of natural resources should favour rapid economic and social development. The experience of countries like Angola and Iraq, however, suggests that resource wealth often proves a curse rather than a blessing. Billions of dollars from resource exploitation benefit repressive regimes and rebel groups, at a massive cost for local populations. This Adelphi Paper analyses the economic and political vulnerability of resource-dependent countries; assesses how resources influence the likelihood and course of conflicts; and discusses current initiatives to improve resource governance in the interest of peace. It concludes that long-term stability in resource-exporting regions will depend on their developmental outcomes, and calls for a broad reform agenda prioritising the basic needs and security of local populations. Acknowledgements The author gratefully acknowledges support and comments from Richard Auty, Karen Bakker, Mats Berdal, Paul Collier, Charmian Gooch, Terry Karl, Morlai Kamara, David Keen, Eric Leinberger, Mike Moore, Gilberto Neto, Jenny Pearce, Michael Ross and Jonathan Stevenson. Notes 1 Christopher J. Gilbert, ‘International Commodity Agreements: an Obituary Notice’, World Development, vol. 24, 1996, pp. 1-19. 2 Interview with Andrea Mogni, EU Commission, Brussels, November 2001. 3 For short-to medium-term horizons, derivative markets-in the form of futures, options, or swaps - can hedge commodity price risk. Yet these are complex and mostly accessible by international buyers, banks and brokers, rather than small producers, and do not cover long-term risks. ‘New Options for the Poor?’, The Economist, 19-25 August 2000. 4 Africa-Caribbean-Pacific-European Community Partnership Agreement signed in Cotonou, Benin, 23 June 2000. 5 ‘The President's Comprehensive Corporate Reform Agenda’, White House Press Release, 9 July 2002. 6 Thomas I. Palley, ‘Combating the Natural Resource Curse with Citizen Revenue Distribution Funds: Oil and the Case of Iraq’, Foreign Policy in Focus (Silver City, NM: Interhemispheric Resource Center, December2003);MartinandSubramanian, ‘Addressing the Natural Resource Curse’. On direct cash disbursements, see J. Hanlon, ‘It is Possible to Just Give Money to the Poor’, Development and Change, vol. 35, no. 2, 2004, pp. 375-83. 7 Paul Toyne, Cliona O’Brien and Rod Nelson, The Timber Footprint of the G8 and China: Making the Case for Green Procurement by Government (Gland: WWF International, 2002). 8 Based on a survey of 22 armed conflicts involving resources between 1989 and 2004, see Philippe Le Billon, Natural Resources and the Termination of Armed Conflicts: Share, Sanction, or Conquer? unpublished manuscript, January 2005. 9 Security Council resolution S/RES/1295 (2000), para. 27. 10 Charles Recknagel, ‘Oil Smuggling Produces High Profits’, RFE/EL, 21 June 2000. 11 Steven L. Myers, ‘UN Concludes, Fining Shell, That Tanker Carried Iraq Oil’, New York Times, 26 April 2000. 12 Interview with Ambassador Mahmoud Kassem, Chairman of DRC expert panel, New York, December 2001. 13 Interview with Ian Smillie, Ottawa, March 2002. 14 Gregory Mthembu-Salter, An Assessment of Sanctions Against Burundi (London: Action Aid, 1999), pp. 18–19. 15 Executive Order No. 13067, http://www.ustreas.gov/ofac/t11sudan.pdf; S.180 EAH, House of Representatives, 15 November 2001. 16 Community Aid Abroad, ‘Submission to the Joint Parliamentary Committee on Corporations and Securities inquiry into the Corporate Code of Conduct Bill 2000’, December 2000. 17 http://www.eitransparency.org/ 18 Blain Harden, ‘A Black Mud From Africa Helps Power the New Economy’, New York Times, 12 August 2001. 19 Interview with former Oryx employee, London, November 2000. 20 John Harker, ‘Human Security in Sudan: the Report of a Canadian Assessment Mission (Ottawa: Canadian Ministry of Foreign Affairs, 2000). 21 The Coltan Phenomenon (Goma: POLE, 2001), p. 4. 22 Many companies register themselves in Liberia or other so-called ‘offshore’ territories - to benefit from corporate legislation and low-level taxes; however, they do pay some minimal taxes, such as a registration fee, hence the ‘corporate registry’. 23 UN Security Council resolution S/RES/1408 (2002), art. 10. 24 Korinna Horta, Questions Concerning The World Bank and Chad/Cameroon Oil and Pipeline Project (New York: Environmental Defense Fund, March 1997). 25 Interview with SPLA official, Nairobi, November 2001. 26 Interview with Charmian Gooch, Global Witness, London, June 2002. 27 James Boyce, Investing in Peace: Aid and Conditionality after Civil Wars, Adelphi Paper no. 351 (Oxford: Oxford University Press for the International Institute for Strategic Studies, 2002), p. 73. 28 Interview with Alex Vines, UN expert panel member, London, February 2001. 29 John Bray, No Hiding Place: Business and the Politics of Pressure (London: Control Risk Group, 1997). 30 Dick Cheney was chairman of oil servicing company Halliburton, cited in Petroleum Finance Week, 1 April 1996. Ironically, this argument would suggest that the US, and the state of Texas in particular, are undemocratic. 31 See Jane Nelson, The Business of Peace: The Private Sector as a Partner in Conflict Prevention and Resolution (London: The Prince of Wales Business Leaders Forum, 2000); Damien Lilly and Philippe Le Billon, Regulating Businesses During Armed Conflicts (London: Overseas Development Institute, 2002). 32 Thomas Waelde, ‘Legal Boundaries for Extraterritorial Ambitions’, in John V. Mitchell (ed.), Companies in a World of Conflict: NGOs, Sanctions and Corporate Responsibility (London: Royal Institute of International Affairs and Earthscan, 1998), p. 178. For a story of the oil industry, see Daniel Yergin, The Prize: The Epic Quest for Oil, Money and Power (New York: Simon and Schuster, 1992). 33 See Pierre Baracyetse, ‘L’enjeu geopolitique des Sociétés Minières Internationales en République Démocratique du Congo (ex- Zaire)’, mimeo, December 1999. 34 Cited in Ali Aïssaoui, Algeria. The Political Economy of Oil and Gas (Oxford: Oxford University Press, 2001), p. 49. 35 Interview with Oxford Papuan Rights Campaign, 2001. 36 Daniel Buckles (ed.), Cultivating Peace: Conflict and Collaboration in Natural Resource Management (Ottawa: IDRC, Washington DC: World Bank, 1999). 37 Nelson, The Business of Peace: The Private Sector as a Partner in Conflict Prevention and Resolution, p. 1. 38 Jim Lobe, ‘Attorney-General Attacks Key Law’, Inter Press Service, 15 May 2003 39 See www.un.org/law/cod/finterr.htm. War criminals are included in the broad definition of the original convention but the EU, among others, greatly narrowed it; interview with Anthonius de Vrie, EU commission, Ottawa, March 2002. 40 Edward Jay Epstein, The Rise and Fall of Diamonds (New York: Simon and Schuster, 1982). 41 For a full definition, see Kimberley Process Working Document no. 1/2002, Ottawa, 20 March 2002. The definition is problematic insofar as it does not define ‘legitimate governments’. 42 ‘Campaign Launched To Stop Billion Dollar Diamond Trade From Funding Conflict In Africa’, Fatal Transactions Campaign, 3 October 1999. 43 Francesco Guerrera and Andrew Parker, ‘The Changing Face of the Diamond Industry’, Financial Times, 11 July 2000, p. 16. 44 François Misser and Olivier Vallée, Les Gemmocraties: L’Economie Politique du Diamant Africain (Paris: Desclée de Brouwer, 1997). 45 Interview, Sir Marrack Goulding, former UK Ambassador to Angola and former head of the UN Department for Peace Keeping Operations, Oxford, October 1999. 46 Neil Cooper, ‘Conflict Goods: The Challenges for Peacekeeping and Conflict Prevention’, International Peacekeeping, vol. 8, no. 3, 2001, p. 28. 47 Interviews with De Beers officials and HRD, London and Antwerp, 1998 and 2001. On identification, see Possibilities for Identification, Certification and Control of Diamonds (London: Global Witness, 2000). 48 Adapted from the Kimberley Process Working Document no. 1/2002. 49 Interviews with residents and diamonds traders near Punduru, Sierra Leone, April 2001. 50 Interview with Alimami Wurie, director of Ministry of Mines, Freetown, April 2001. 51 Christian Dietrich, Hard Currency: The Criminalized Diamond Economy of the Democratic Republic of Congo and Its Neighbours, Occasional Paper no. 4 (Ottawa: Partnership Africa Canada, 2002), p. 35. Additional informationNotes on contributorsPhilippe Le Billon Philippe Le Billon is Assistant Professor at the University of British Columbia with the Department of Geography and the Liu Institute for Global Issues. He wrote this paper while a Research Associate at the IISS in 2001–02. The Ford Foundation provided funding for the project.

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