Environmental issues for developing countries arising from liberalized trade in the mining industry

This review analyses some of the environmental and economic implications of current trade policies and changes in the world trading system for mineral producers and consumers. A principal factor which determines environmental performance is whether firms have the resources and capabilities to undertake innovation. We therefore place particular emphasis on the anticipated effects of liberalized trade on innovation and competitiveness at the firm level. Evidence indicates that improvements in environmental management would be expected to occur irrespective of the country hosting the investment. Due to the opening investment climate and relatively large quantities of mineral reserves, we expect these effects to be positive for many mineral producing developing countries. One difficulty which may arise is whether policy measures to promote production efficiency and develop innovation in mining and mineral processing operations could be interpreted as protectionism. The creation of new lines of credit, to promote, but not subsidize, technological and organizational innovation, may be the best way forward for developing countries .     

Institutional reform in the Andean irrigation sector: Enabling policies for strengthening local rights and water management

For centuries, local and indigenous water rights and rules in the Andean region have been largely neglected and discriminated against. The process of undermining local communities’ water access and control rights continues up to today and not only is it headed by powerful local, national and international water‐use actors encroaching local rights — it is also a direct consequence of vertical State law and intervention practices, and the latest privatization policies. Recognition of and security for the diverse and dynamic local rights and management frameworks is crucial for improving rural livelihoods and even national food security in Andean countries. At the request of the Government of Ecuador — in which at that time the indigenous movement had its political participation — a research mission was organized to formulate a proposal for institutional reform, aiming at the strengthening of the national irrigation sector. In this article, some basic mission results are outlined and analyzed within the scope of four concepts (institutional viability, political democracy, equity, and water rights security), and practical elements for institutional reform are suggested, not only for the Ecuadorian irrigation sector but also other settings. The complementary roles of central Government, local governments and water user organizations in water resources management are emphasized as is the need to strengthen enabling legal and policy frameworks. The importance of translating constitutional recognition of local and indigenous rights and common property systems into practical procedures and institutional structures is also stressed.     

Ghana: revival of the mineral sector

After almost two decades of decline, Ghana's mineral sector has rebounded significantly and is currently the main foreign exchange earner. Gold mining is the principal activity within the sector and accounted for 41 percent of total export earnings in 1996. This paper presents an overview of Ghana's mineral industry and covers mineral resources, production and reserves; mining investments; the role of mining in the economy; and the structure of the industry. An overview of the national mineral policy is also presented to depict the current regulatory and fiscal environment in which the industry operates. The spectacular reversal in mineral sector performance can be attributed to the adoption of World Bank recommendations in a new national mineral policy, the 1986 Minerals and Mining Law, aimed at revitalizing the sector.     

Japan's develop-for-import policy

Much of the world's remaining mineral resources lie within the underdeveloped nations of the Third World. The current crisis of confidence characterized in international investment and trade in extractive resources has become detrimental to both the resource-rich developing countries and the resource-hungry industrialized countries. Japan is one nation that has developed a strategy to foster mutual trust and to restore confidence in the international extractive industries. This paper examines Japan's develop-for-import policy, ‘kaihatsu yunso’, and its design, implementation and effects on securing foreign resources supplies.     

Harnessing the bonanza: economic liberalization and capacity building in the mineral sector

Over the past decade many developing and transition economies have liberalized their investment regimes for mining and privatized formerly state-owned mineral assets. In response, these economies have witnessed increased foreign investment in exploration and development, growth in the number and diversity of mineral projects, and the opening up of new channels for harnessing increased economic and social benefits from development in the minerals sector. The restructuring of fiscal and regulatory regimes to encourage foreign investment, and the associated influx of mining capital, technology and skills, is transforming traditional relationships between mining firms, local communities and the government. This transformation necessitates a re-evaluation of the most effective policy approaches to capture increased economic and social benefits from mineral production. This article considers effective mechanisms for improving the capacity of developing and transition countries to maximize the economic and social benefits of mineral production. Common challenges associated with minerals economies are reviewed. Consideration is given to the opportunities for harnessing foreign direct investment and the possibilities for creating new partnerships between local communities, industry, government, and multilateral development agencies through social investment projects. The article concludes with a series of recommendations for the design and implementation of policy approaches towards harnessing mineral production for economic and social benefit following the liberalization of investment regimes for mining.     

Indonesia's mineral resources: Performance and prospects

This paper discusses the present position and future prospects of mineral exploration and exploitation in Indonesia. It places the industry within the economic and political context of the country as a whole and considers the development of government policy towards the sector. Although the mineral resources of Indonesia are believed to be vast, the performance of the industry in the past has been erratic. The relative political stability of the last few years, combined with rising prices, has encouraged the opening up of new mines, and has also emphasised the need for more local processing of those minerals that are produced. At present, income from oil provides most of the government revenue and consequently the prospects of this sector are critically important for the nation's future. Increased diversification can, however, be expected in the next few years as the resources of tin, bauxite, nickel, copper, coal and many other products are developed. Given a favourable political and economic climate, Indonesia could be one of the world's major mineral producers by the end of the century.     

Project Development in Support of National Energy Strategies

The nature of the technical assistance needed by the energy-importing developing countries to bring energy sector projects up to the implementation stage is discussed. Such projects may be delayed or poorly implemented because the energy-importing developing country lacks the proper infrastructure or the technical/managerial skills to carry them out. Planning helps to identify the resources, financial, technical and managerial, that need to be brought to bear as well as the benefits that can be achieved.     

Environmental policy for sustainable development of natural resources

This paper describes new environmental policies and expanded administrative agencies which in recent years have been adopted by many governments faced with a continuing decline in the quality of their environments. In a number of developed and developing countries, devising a far reaching environmental policy for sustainable development of the natural resources sector is a national priority. Specific environmental policies may be classified according to objectives, timeframe, mechanisms for implementation, whether or not they are binding, and the nature of sanction. This paper provides some generalizations about certain features common to most environmental policies. In the first section an examination is made of some of the most pressing problems which environmental policies relating to natural resources seek to address. The second section discusses environmental policies themselves. The third section, which makes up the main body of the paper, assesses the strengths and weaknesses of a variety of mechanisms available for implementing environmental policies to promote sustainable development in the natural resources sector.     

The Ethiopian mining sector

The Ethiopian Constitution of 1928 vests in the state ownership of all mineral resources. However, the mining code of 1944 recognized the right of individuals and private companies to explore for and develop those resources. The results were quite impressive; Ethiopia became a producer of gold, platinum, copper and other minerals. A revised mining code in 1971 further extended the rights of individuals and companies to develop the mineral resources of the country. In 1974, the newly established revolutionary government eliminated private ownership of mines and established instead state-owned mining companies to develop the mineral resources of the country. In time, the demand for government funding by other sectors of the economy left little for the mining sector and it went into decline. To correct that problem, the Government of Ethiopia in 1989 decided to again make private ownership in the mining sector legal. This paper describes some of the recent initiatives to open the mining sector to private enterprise.     

The Water Poverty Index: An application in the Indian context

For developing countries, the proportion of households covered by improved water resources is conventionally used to assess the water stress situation. However, in a developing country like India with a high population growth rate, water demand and supply are considerably mismatched. An agro-based economy with large variations in socio-economic conditions and changing rainfall patterns across the states imposes greater challenge on water resources. Therefore, there is a need to assess the water situation across the country in a holistic manner. This paper proposes application of the Water Poverty Index as a comprehensive policy tool to assess actual water-stress situation across 20 major states in India. This index covers important socio-economic parameters such as access, capacity, use and environment in addition to water resources of each state. The results and findings are expected to be of use to policymakers and implementing agencies. In view of policy formulation, a state performing well on a Water Poverty Index component can act as a benchmark for another state.     

Groundwater resource management and environmental protection

Population and economic developmental pressures will continue to put increasing pressure on the environment, especially on scarce water resources. Meanwhile, large numbers of poor families in the developing countries still lack access to safe water. An integrated water resource planning and policy analysis framework is presented that permits the main issues and alternative options to be systematically considered and prioritized, especially problems arising from groundwater pollution. Basic principles of water resource economics are used to illustrate how the neglect of long-term environmental considerations jeopardizes the availability and quality of groundwater resources in the Greater Manila area. This paper contains a brief overview of drinking water and sanitation issues in developing countries, presents a policy-oriented analysis of a groundwater problem of great relevance worldwide, and demonstrates how the study conclusions might be implemented practically in a constrained developing country context.     

Why institutional reforms in forestry? Lessons from international experience

Profound changes have taken place, worldwide, during the last decade. These political, economic, and institutional changes have contributed to redefine the role of the state in all sectors, including natural resources. This article discusses traditional shortcomings of forest departments and new challenges they face arising from the changes in national policies and global concerns. Worldwide trends, such as civil service reforms, decentralization of government, increased local community involvement in resource management, and divestiture of state-owned enterprises impact the forestry sector, already faced with shrinking forest areas, decreased revenues, and government downsizing. To survive, forest departments need to form strategic partnerships with other stakeholders, get out of forest activities where they do not have a comparative advantage, and focus on core functions that governments do best. Examples are given from countries in Asia and the Pacific. Two country case studies are presented discussing Nepal's experience with Forest User Groups and New Zealand's experience with privatization of forestry.     

United Nations mineral exploration activities in developing countries

The purpose of the United Nations' mineral exploration activities is to assist the developing countries in identifying, evaluating and developing their mineral resources as a means of stimulating their economic development. Since 1978, these programmes have been executed by the Natural Resources and Energy Division of the Department of Technical Co-operation for Development (DTCD) with the United Nations Development Programme (UNDP) providing the bulk of the financing. In the past 30 years, more than 450 projects in some 100 developing countries have been executed at a cost estimated at US$600 million. This input has contributed to the discovery of deposits valued at billions of dollars, many of which are now being mined.     

UN Department of Technical Co-operation for Development regional seminar activities in 1989

The purpose of the United Nations' mineral exploration activities is to assist developing countries in identifying, evaluating and developing their mineral resources as a means of stimulating their economic development. Since 1978, these programmes have been executed by the Natural Resources and Energy Division of the Department of Technical Co-operation for Development (DTCD) with the United Nations Development Programme (UNDP) providing the bulk of the financing. In the past 30 years, more than 450 projects in some 100 developing countries have been executed at a cost estimated at US$600 million. This input has contributed to the discovery of deposits valued at billions of dollars, many of which are now being mined.     

POST-GRADUATE TRAINING AND RESEARCH IN APPLIED SCIENCE IN DEVELOPING COUNTRIES: THE CASE OF MINERAL EXPLORATION

If a developing country decides to devote scarce human and material resources to post-graduate training and research in an applied science - based on a realistic assessment that the potential benefits from such an investment are likely to exceed the benefits from alternative investments - several approaches exist. The authors examine these alternatives as they apply to mineral exploration. They argue that if recourse is made to overseas training, programmes should be restricted by aid agencies to universities that will provide applied research subjects in the trainees' own countries. 'Twinning' arrangements between institutions in developing and developed countries may be useful if faculty in the developed country university are interested in and available for overseas work and if university administrations are aware of potential problems. The authors also discuss the provision of short-term non-academic fellowships in applied research, an approach which has not been used to extent it deserves.     

Towards a grand deal on subsidies and climate change

Recent studies have identified public subsidies as a principal cause of unsustainable development. Worldwide, governments are spending up to $U950 billion a year on subsidies. Many of these public subsidies fail to serve their purpose and in fact, often turn out as policy failures as they further distort trade and cause environmental harm. The energy sector is among the most subsidized sectors in the world, receiving over $U240 billion per annum of public subsidies. This article highlights current energy subsidies and their implications. The article examines: (i) the global size and distribution of energy subsidies in industrialized and developing countries; (ii) the impact of these subsidies on the economy, equity and the environment and their role as barriers for sustainable development; (iii) the political economy behind public subsidies and the various political and institutional barriers and lock-in mechanisms that cause subsidies to become entrenched in economic and public structures; and (iv) proposals for effective subsidy reform in energy policies, suggesting a global strategy to eliminate energy subsidies. OECD governments are in a position to take the lead, and the UN Framework Convention on Climate Change presents an excellent opportunity of striking a political grand deal and linking the reform of energy subsidies to a meaningful participation of developing countries to the Kyoto Protocol. Moreover, if sinks are to be included in the clean development mechanism (CDM), it is crucial to include the removal of forestry subsidies in the grand deal.     

AGRICULTURE, WATER AND ENVIRONMENT IN BOTSWANA: A PROBLEM OF POLICY

In many countries, an increasing amount of attention is being paid to the economic and environmental repercussions of mineral resources development, and in particular to the problems of industrialisation of an agricultural society. In Botswana, the discovery of and planning for the development of nickel deposits is an important element of national policy. However, often overlooked is the basic and continuing role that has to be provided by the agricultural sector. The pressure of people and of livestock on the land, and the extension of cultivation into increasingly fragile environments where the availability of water is a critical constraint, pose serious problems for policy makers. The author examines the dilemma in a case study of Botswana, showing how changes in the agricultural sector have precipitated problems of water supply and of environmental stress. The need for inter-disciplinary approaches to policy making is underscored, together with detailed and integrated studies of the dimensions of these inter-related problems. The problem of the availability of water in adequate quantities and of appropriate quality has become a serious policy concern. Later this year the United Nations Conference on Desertification will address the broad scope of the relationships between man, land and water. This article examines one example of these changing relationships.     

Linking climate policy across economic sectors: A case for green growth in Nepal

While the energy sector is the largest global contributor to greenhouse gas (GHG) emissions, the agriculture, forestry, and other land use (AFOLU) sector account for up to 80% of GHG emissions in the least developed countries (LDCs). Despite this, the nationally determined contributions (NDCs) of LDCs, including Nepal, focus primarily on climate mitigation in the energy sector. This paper introduces green growth—a way to foster economic growth while ensuring access to resources and environmental services—as an approach to improving climate policy coherence across sectors. Using Nepal as a case country, this study models the anticipated changes in resource use and GHG emissions between 2015 and 2030, that would result from implementing climate mitigation actions in Nepal's NDC. The model uses four different scenarios. They link NDC and policies across economic sectors and offer policy insights regarding (1) energy losses that could cost up to 10% of gross domestic product (GDP) by 2030, (2) protection of forest resources by reducing the use of biomass fuels from 465 million gigajoules (GJ) in 2015 to 195 million GJ in 2030, and (3) a significant reduction in GHG emissions by 2030 relative to the business-as-usual (BAU) case by greater use of electricity from hydropower rather than biomass. These policy insights are significant for Nepal and other LDCs as they seek an energy transition towards using more renewable energy and electricity.     

Regional development benefits of mineral projects

This paper discusses the development impact of mining and mineral processing on the regions in which they are located. The discussion is organized so as to be of relevance for policy formulation in resource-rich developing countries which consider the exploitation of their mineral wealth. The hypothesis is that mining technology, interpreted in a broad sense, has undergone a profound change since 1900. In consequence, experiences of mineralbased regional development in the industrialized countries around the turn of the century are of little relevance to the Third World in the 1980s. Contemporary mineral ventures have very weak regional development repercussions in the absence of forceful policies specifically directed towards the regional development goal.     

Dynamics of state mining enterprises during the 1980s and the outlook for the 1990s

This paper examines the evolution of the control by the state of mining and smelting from 1975 to 1989. In 1950, there was little state-owned mining capacity outside the centrally planned economies. A wave of nationalizations of mine assets swept over the developing countries in the late 1960s and early 1970s. State control continued to rise, in developing countries as well as in the developed market economy countries, until the mid-1980s, when the trend reversed. At present some 20% of Western world mineral production is state controlled. The level of control is highest for those minerals mined mainly in the developing countries, and lowest for those minerals mined mainly in the developed market economy countries. The current trend is toward privatization of state-owned mining enterprises in developed countries and it is expected that as the 1990s progress, privatization of such enterprises will also begin to take place in developing countries.