What is the relationship between minerals (such as oil, diamonds and gold) and conflict, authoritarianism, and poverty? Scholars have spent years studying how the so-called extractive industries – mining and drilling – impact people’s lives, their governance, and the environment throughout the world. How can countries so rich in mineral wealth remain mired in so much poverty? Professors Jeffery Mantz, Michael Ross and Suzana Sawyer discuss these questions with Dr Maria Armoudian.
Jeffery Mantz is a Professor of Anthropology at George Mason University.
Michael Ross is a Professor of Political Science at the University of California, Los Angeles and Director of the Center for Southeast Asian Studies. He is the author of The Oil Curse: How Petroleum Wealth Shapes the Development of Nations.
Suzana Sawyer is a Professor of Anthropology at the University of California, Davis. She is the author of Crude Chronicles: Indigenous Politics, Multinational Oil, and Neoliberalism in Ecuador.
Maria Armoudian: I’d like to start with Congo. It has experienced one of the most brutal conflicts primarily over the mineral coltan, which we use for our cellphones. You made some comparisons, one to blood diamonds, one to sugar plantations by the European colonies in the Caribbean. How do these compare?
Jeff Mantz: Coltan, or columbite-tantalite, is this dense silicate. It’s a very heavy mineral that you find in the ground. You’re able to take the tantalite out of it and refine it into something called tantalum [which] is used as a heat-resisting conductor. What a lot of scientists called the “Holy Grail of the digital age” is that we needed mobile devices and other kinds of electronics that were able to hold a charge for a long period of time. So it took cellphones from being a commodity that was servicing the more wealthy into a different sort of space where this was the kind of commodity that was available to the rest of the planet. Everybody could have a cellphone. And people do. One of the interesting things about the cellphone in Africa and the minerals that come out of the Congo is that you have this coming full-circle. [When] the militia comes over and tries to take over a coltan mine or a village, the first thing they do is confiscate all the cellphones. And they’ve used cellphones in the past to coordinate their attacks on villages and so forth, so there is this sort of circularity to the product. Historically, sugar had an enormous role to play in terms of the transformations that were ushering in industrialisation in Europe and then Britain specifically. So the sugar economies of the Caribbean took sugar from being this kind of product that was servicing the elite. It was originally a spice and then it got turned into this product that was widely available and everybody wanted it in their tea and it became this plebeian type of commodity. So as you can see, it had a similar sort of effect. In the process of becoming this widely consumed commodity it grew these industrial centres like London. You have the same sort of phenomenon happening with the digital age and the sort of economic transformations that are unfolding there. So that is the parallel that one makes to that… [Whereas diamonds] are a luxury item, the difference with these items in the Congo is that the conflict is happening around coltan historically, and the problems that the Congo has faced, including the deaths of millions of people, most from starvation, is a result really of trafficking in a mineral that is essential for a product that most of us own.
MA: When you went to Congo and you studied the process, it was all pretty devastating in terms of how entire communities become swept up into this, the conflict that came out of it, and how the coltan process ultimately ends up in our cell phones. Can you give us a walk through all of that?
JM: There are some government-controlled mines and there are some more formal mining centres and so forth. But most of the people who are involved in coltan production are involved as small scale artisanal miners – there are literally hundreds of thousands of them. The interesting thing about this is as much as one is inclined to demonise the trade, which is precisely what happened with Dodd-Frank, it is actually an important source of labour. But you have many different stakeholders in this. And a lot of it makes its way illegally, or illicitly, mostly out through Rwanda and gets rebranded as some other kind of coltan other than Congolese coltan… Rwanda, according to the [U.S. Geological Survey], eclipses Congo in terms of its coltan production, which is just absolutely asinine. There is no way a small country like that, that is on the wrong side of the geological fault, could really exploit whatever reserves it has. So you have a lot of it being what I call “laundered”. There is a lot of mineral laundering that goes on that contributes to the rebranding of coltan as Rwandan coltan, or as Australian coltan, or as coltan from some other part of the world, and we have had that going on for quite some time now.
MA: Michael, you’ve also looked at extractive industries in Asia. You’ve looked at oil, timber, and diamonds. How does it compare to what we’re hearing from Jeff?
Michael Ross: There are a lot of similarities, particularly in Indonesia and in Myanmar, where you have both countries very fragmented ethnically – dozens and dozens of different ethnic and linguistic groups. And often there is a lot of resentment about foreign companies or outside companies coming in and digging up local resources and making a huge profit over it, especially when the profits go to the government or to some company, and the local people are stuck with all of the environmental and social harm done by some very large and often very dirty money operations. In Indonesia you see this all across the vast archipelago, from Aceh in the west to West Papua in the far-east, and the dynamics seem to be very similar to what Jeff was describing in the Congo.
MA: Do you mean in terms of the conflict and the corruption, and the kind of laundering?
MR: I think probably the closest comparison in Asia would be in Myanmar where you have central government not really controlling that much in the peripheral parts of the country. And in those peripheral regions you have sometimes economies that are built around the extraction of minerals, often controlled by some warlord or whatever faction has the most weaponry, the most kind of brute force. And people can labour away under brutal conditions and make almost no money from it.
MA: And when they don’t they can also get punished by the people controlling that?
MR: That is right. Perhaps what is remarkable and distinctive about the Congo case that Jeff was describing is this is sort of transnational connection to the devices that so many of us carry around, and that it’s so central to the modern information economy that gives everybody a kind of intimate link to this almost scandalous extraction process going on, on the other side of the world.
MA: Oil, also an extractive industry, seems different for obvious reasons [as it is] controlled by multinational corporations most of the time. Suzana, you’ve studied this in Latin America, particularly in the Amazon area, and you found some exploitations there that contrast. How would you compare these?
Suzana Sawyer: I think there are some differences, especially with the work Jeff’s been involved in, where he is looking largely at coltan as coming from artisanal mining for the most part, which is very different from large scale multinational oil exploration and extraction. At least in the Amazonian area my researchers looked specifically at the conflicts that have emerged between multinational corporations and indigenous peoples in the Amazon region. For the most part the largest [and] most significant effect of those operations has been the environmental degradation and contamination that has resulted. There are at times during exploration and extraction some benefits that local communities can encounter, depending on the types of arrangements that get built, mediated, [and] negotiated with local communities. But they’re often very short-term. They’re often [not] based on a full understanding on the part of indigenous peoples of what is at stake. And for the most part they end up collapsing and coming back to haunt many people who have engaged in them.
MA: I remember a couple of lawsuits, one in Burma, one in Nigeria against some of these oil giants, and I know there is also been one in Ecuador that I think you’ve been following. In Burma, one resulted in a very large settlement for the indigenous people in the region. Nigeria did not turn out that way. In Myanmar/Burma it was Unocal, Chevron was Nigeria, and the Ecuador one is also Chevron, is that right?
SS: That is correct. The lawsuits are different. They’re not necessarily directly comparable, although they are with oil companies. But the one in Ecuador has specifically to do with the long-term effects of oil operations initiated by Texaco, the corporation that merged with Chevron. So now it’s a lawsuit against Chevron for environmental contamination and then the health effects of that contamination. It’s been a really long standing [and] very complex lawsuit, but it resulted in Ecuador, in a ruling against Chevron, finding it has a $9 billion liability that essentially, should it ever be recuperated, would be used for largely environmental remediation.
MA: I understand in mid-December a Canadian court has said that they should be able to collect this.
SS: It was an Ontario court of appeal that said that the Ecuadorians did have a right to use Canada as a jurisdiction through which they could then make a claim for the enforcement of the Ecuadorian ruling. So that was a court decision that was overruling an [Ontario] lower court decision. It was an appeals court decision that was really paving the way for them to think of Canada as a jurisdiction through which they could enforce the Ecuadorian ruling.
MA: So what we’ve got here are several different scenarios, but all of them resulting in a kind of exploitation. Michael, you’ve been studying the relationships between some of these extractive industries; problems such as conflict, corruption, and authoritarianism. Let us start with conflict and the relationship that you’re finding between extractive industries and civil war or other kinds of violent conflicts. What are the conditions?
MR: There are maybe fifty countries around the world that extract a significant amount of oil or gas. Many of them are exporters and the number is growing as there has been new investment, new exploration particularly in sub-Saharan Africa, but also parts of Latin America. Yet when you look around the world and you look at these fifty or so countries you find that they have unusually high rates of civil war. Often these wars seem to be around these oil facilities. I think the most common pattern, one that we have already touched on, is that when oil is found in the territory of a group that feels disenfranchised [or] marginalised they get resentful. The government or companies may be anticipating this. It may be especially repressive in those regions. I think we saw that in Sudan and Indonesia at one point, and it may be that there are local insurgencies or independence movements that use this kind of as a rallying cry: “They are stealing our minerals. They are stealing our wealth. If we were getting our fair share we would be much better off now”. Countries that think they’re going to get this sort of leap forward in wealth and development from discovering oil often seem to find themselves mired in these endemic conflicts where a lot of the profits just get squandered on long-running insurgencies and repression.
MA: Jeff, would you say that this fits with what you’ve seen in the Congo?
JM: In Congo you see some interesting parallels. What I like about what Michael Ross is saying is a refreshing way of looking at it from what typically has been regarded as kind of a “resource curse” hypothesis propounded by the economist Jeffrey Sachs and others about the tendency for countries that are wealthy in resources that are sure to be at the bottom end of the economic chain in terms of the benefits that accrue to their society from having these resources. There seems to be historical evidence for this. But you’re left with this sort of nasty kind of taste in your mouth that it may not be the existence of the resources and the inability to exploit them, but the fact that they’re exploited by outsiders and that there are no appropriate forms of accountability that result from this. That is something that you see very much articulated by Congolese. If you comment to a Congolese person on poverty in the Congo and say, “Wow, this looks poor”, the first thing that they’ll sort of jolt back at you and say [is], “The Congo is a very, very wealthy country”, and be fairly adamant about that in terms of their pride in that, the fact that they have these resources, anything can grow there, and anything that can be found in the ground. They really see the problems they have for what they are… they are facilitated by outsiders who exploit particular kinds of disagreements the people have over land and resources. They exploit peoples’ good will. So I would say “yes…, these ‘resource curse’ kinds of literature sometimes leave you thinking that you kind of forget about the people and how they feel about it”, when Congolese [people] very much have a very real recognition of what the political economy is… They are not naïve to it at all. Where they choose to direct their energy is precisely at those points of conflict.
MA: Are they speaking specifically of the West or are they also speaking of other African countries?
JM: I think most often they talk about it in terms of Rwandan exploitation. Rwanda and Uganda in particular have exploited the situation in the Congo to their advantage. The governments have, and a number of individuals in Kigali and Kampala who are now part of the Kigali and Kampala elites have made themselves very wealthy off of this conflict. That is, I think, where they see most directly the connections there. The West is a bit more indirect. The French and Americans are sometimes picked on specifically by the Congolese, but that is largely because we have these close diplomatic connections to Rwanda and provide a lot of aid for them. That produces a lot of rumours and mysteries… But it’s not like you have American companies going directly into the Congo and setting up shop. This more elaborate chain takes place. So they are taking raw minerals out and they work their way through Malaysia, Beijing, or any number of other places, and eventually it ends up in an iPhone or something like that. People understand the commodity chain, but the sort of proximate kind of wrath is more directed at their neighbours.
MA: Suzana, what about in Latin America?
SS: It is slightly different with respect to oil and, I guess, also with respect to mining somewhat. Historically, yes, there have been large insurgency movements in Latin America, but more recently in the last two decades there has emerged a lot of conflict around resource extraction. But the forms of conflict that have emerged are not armed, so they’re not local insurgencies in the same sense. They are large multinational operations definitely directed towards the outside, to some extent, but also very much around national legislation and the national government… A lot of indigenous organisations who have built collaborations with large environmental groups and with progressive entities within different countries have built strong alliances for rewriting constitutions, for rewriting mineral laws, [and] rewriting hydrocarbon laws. You see this in Ecuador, you see this in Bolivia, to some extent Peru seems [like] a whole different form of wanting to imagine what development might look like otherwise. These are actually discussions that are taken seriously. They are not seen as they were maybe thirty years ago when it was fairly peripheral, but now they’re part of the mainstream conversations around extraction. And it largely has to do with questions of the environment, of indigenous rights, in the case of Ecuador and Bolivia, of the rights of nature around global warming. So there is a different conversation that is also being generated through these conflicts.
MA: One of the things that you had written in one of your pieces, was about a paradox that had emerged and that had to do with these constitutions and laws all over the world that were supposed to be protecting the rights of indigenous people. And yet they’re still experiencing similar exploitation. Do you think that has turned a corner? Because it sounds like you’re saying it has.
SS: It really depends on where. In Latin America in particular countries, especially countries that have significant indigenous populations, it’s not that it’s turned a corner. But the whole debate has shifted and it’s not as though there is a victory in any sense from an indigenous point of view, but that the debate has radically changed and transformed. Yet you go to other countries in Southeast Asia, or the Pacific, or Sub Saharan Africa where that is definitely not the case. And often there are spaces in Southeast Asia or Sub Saharan Africa where even the notion of indigenous rights isn’t really clear, even the definition of who actually is an indigenous person is hotly debated. So you see different ways in which this confluence of legislative, constitutional, even UN-mandated [as well as] corporate proclamations and guidelines for taking into consideration indigenous peoples and the environment take shape differently in different places.
MR: I think what Suzana is saying is really important and easy to overlook. Many of us who follow these issues are aware of these stories, like in the Congo [and] Ecuador, of these endemic struggles that seem kind of hopeless. However, particularly [in] the last five years, there has been a whole movement responding to this. We see now even governments, in places where you wouldn’t expect this kind of effort to improve things, really taking this issue seriously. So in places like Mongolia, Mexico, [and] Guinea, suddenly governments are influenced largely, I think, by NGO movements and by other international organisations working on this adopting reforms that really could be meaningful, that really might make a difference. It’s a little bit early to say, but the struggle, which at one time was really all very kind of micro level on the ground around these extraction sites, now is also taking place in the halls of governments in capital cities. That is a pretty interesting and exciting thing.
MA: You’ve led me right into where I wanted to go, Michael, because you’ve also explored some of the policy changes that could have an impact. You’ve talked about, for example, decentralisation being one possible way of approaching a future policy. If you were going to lay out what you thought were the most important changes policy-wise globally [and] locally what would you say?
MR: First of all, I think the first thing that has to be said is that there are no magic solutions. There are no silver bullets here. Everybody in the development world always thinks there is some magic answer if we just implemented it, and I just don’t think that is the case. I think, as Suzana was implying, that you go from case to case, in different local conditions people are struggling to find different kinds of solutions. I think everywhere it’s important, though, that there be a lot more transparency. The minerals industry and the oil industry in particular is vast and dominates large parts of the world and yet it’s extraordinarily opaque. You go down to the gas station on the corner and you have no idea where that stuff comes from. Everywhere else you go to buy something, it has a little country of origin label, but not at the gas station. So bringing transparency, I think, is, if nothing else, the first step in a lot of different situations towards getting policies right, towards fixing some of these problems.
MA: Jeff, you’ve written a bit about some of the policy changes that have already started. For example, here in the US I think [I think you wrote about the] Dodd-Frank Act? How do you see this having an impact, if it is?
JM: There is an interesting difference here in the case of the Congo. You don’t have very many indigenous rights and environmental movements and that sort of formalisation… in the Congo with respect to non-governmental organisations. That has more to do with the fact that until 1996 they were backed by a US-financed dictator who was an enemy of communism and ruled very much with an iron fist. So you didn’t have these kinds of alternative forms of civil society emerging. However, in the case of the Congo you have scores of these organisations that are coming in from elsewhere. [About 10 years ago] they were very concerned about the ecological damage in the Congo… Increasingly they were concerned about the humanitarian damage, particularly around gang rape by soldiers and [the like]. A few of these organisations were responsible for getting… section 1302 added to the Dodd-Frank Act, the financial reform act, and this basically created a sort of stigma around Congolese coltan, as well as tungsten and gold. It basically requires the companies to exercise due diligence in proving that their minerals are not coming from conflict zones. Sounds all great on paper, except there is not really a good way of verifying this. The problem I’ve written about actually is not Congolese coltan. It’s all the other coltan that is laundered everywhere else, that is really where the stigma should be. I really don’t see anything changing there because of the [Securities and Exchange Commission] getting involved in this process. I see it potentially as just a new form of regulation imposing itself on the Congolese that they’ll see as any other kind of colonial/post-colonial sort of apparatus. Where the hope lies I think is in some initiatives that we see on the ground, where Congolese have decided maybe that if they demonstrate transparency in their own mineral process, and use social media to document it, put [radio-frequency identification] tags on bags, and start doing this on their own, then they can have a genuinely Congolese-certified method of demonstrating clean coltan or clean gold… I think that is just good for the Congo in general. I think the Congo’s five hundred-year history of problems is really related to outsiders meddling in it and things the Congolese are perfectly capable of doing on their own. That is where a significant transformation needs to be taking place.
MA: Now the war is officially over there, but I understand it’s still pretty heavy in terms of the conflict, and some people argue that the current conflict in the Central African Republic has some similar dynamics. Do you have a sense of what is going on now?
JM: They are two different conflicts. They’re not completely unrelated, but they relate to different kinds of concerns. There are parallel sorts of concerns, there are parallel sorts of dilemmas and problems, [and] there are leadership issues. There are conflicts over land scarcity on the ground that translate into ethnic kinds of disagreements, and there are political-economic dimensions to this involving the trafficking of certain items, most of which goes out through East Africa. The overlap with these two situations is also due to both being in the francophone world. They neighbour one another and then there have been conflicts. Kony is the most famous, which is the Lord’s Resistance Army, which kind of wandered into the CAR after being in the Congo for quite some time. So it is a series of problems that you see, as well as in South Sudan and Chad, and lots of other parts of Africa, that they’re not directly related in a real sense.
MR: I have to say I really don’t know much about the CAR conflict. There is always some resource dimension to most conflicts, particularly as you get to poorer countries and peoples’ living more and more depends on their interaction with natural resources. However, I can’t really say that I know anything about what kind of role, if any, it plays in this conflict.
MA: You have done some work around poverty and resources as well, and you just mentioned the issue of poverty. So I’m wondering if you could help us to understand how this is happening, where in the case of the Congo, you’ve got an essentially rich landscape and yet we’ve got such poverty going on in the country. What is the relationship there? Maybe it’s also tied into the governance question that you also looked at?
MR: I very much think so. I think there is a lot of different kinds of economic activity that don’t depend that much on what the government does. You can have a pretty corrupt government, like you do in say China, but you can still have thriving industries, factories, and retail businesses. The extractive industries are kind of different. The government always plays a central role, partly because in almost all countries of the world, the US being the big exception, whatever that is valuable, that is below the ground, belongs to the government. So the interaction between companies and governments is critical. If the government is corrupt, weak, and unaccountable, then you’re almost certain to see that the money that comes from extracting resources is going to be squandered. You really need an accountable government, a transparent government, a government that is strong enough to stand up to companies and get their fair share, to regulate them properly. You need to have all of the elements of good governance and they become even more important in countries that are based on extractive industries than they are in just your average country.
SS: I just wanted to pick up on what Michael was saying a little bit and bring back his thought about transparency. I absolutely agree with what Michael is saying. [There] is maybe another dimension that we should think about, and that is at least the rules of particular large extractive corporations, their rule in sustaining and generating particular corrupt practices within government so that governance, government accountability, and government transparency is so intertwined in actual corporate activity. It seems that one of the places to really think about transparency, and this is more speculative, would be through imagining of a multiplicity of different actors involved at a larger, maybe even UN-type level of structure. Because to me, in my research both in Latin America, and then other research on the extractive industries, it’s the relationship often between corporations and governments, and the lack of transparency between those two, that is critical also to imagining a more just reality for peoples in countries and across the world. I would just make a plug for the United Nations special representative John Ruggie, faculty member at Harvard, who has done extensive work on the relationship between business and human rights. And the work that the group of scholars that he is engaged with across the world might be a good platform for building larger networks.
MR: Suzana’s points are so salient and so right on. We forget that when it comes to these relationships between governments, particularly in low income countries and these companies, the companies are so much vastly larger than the governments. The entire economy of a country like the [Democratic Republic of the Congo] is only a small fraction of the size of, say, a Shell or an Exxon. These companies have enormous influence in these places and even though international initiatives have focused, up to this point, really on bringing transparency to government companies which are so important, and so wealthy and so influential, has kind of been flying under the radar, and a lot of the stuff just doesn’t apply to them.
MA: Do you think the free trade agreements that have been occurring for the last couple of decades have obfuscated this even more?
MR: Absolutely. There is [a lot of] literature devoted precisely to that question. I think what is most obscuring about this is the fact that people tend to think of free trade in a very assertive digested sort of way. That means the opening up of economies, when actually what it does, particularly in the case of the [World Trade Organization], it creates international administrative legal apparatus that polices different kinds of agreements. And like any kind of legal forum there are certain people that have resources to pursue certain kinds of claims. There are certain kinds of stakeholders that are better litigators than others, and we have to remember that these free trade agreements are between countries not between companies.
This interview was originally aired on the Scholars’ Circle. Find more here.