Non-European Country Engagement with Resource-Rich Developing Countries

At the start of the century, three agenda for development were emerging; the Sustainable Development Goals, Climate Change and sustainable use of resources and Mitigating the Resource Curse. The 2003 commodity price boom created the opportunity for resource-rich developing countries to capitalize on their natural resource wealth. By 2017, when the resource boom has retreated to more stable price levels, more than a decade of engagements have been completed between the industrial and resource-rich countries. Progress has been achieved in many areas and the issues facing mineral consumers and producers are now clearly articulated. This report documents the engagement by industrial countries, Australia, Canada, China and Japan, normally under Official Development Assistance. Overall, two strands of engagement appear from the analysis. The first focuses on the wider governance agenda, to support resource-rich countries better manage their natural resources. The second strand provides direct support from home country governments to their companies operating abroad. The resource exporting countries (Australia and Canada) are more active in providing support for governance related measures than the resource dependent countries (China and Japan). Australia is further distinguished from Canada, where the former has increasingly moved to funding of other international initiatives (EITI and NRGI for example) to assist resource-rich countries. Canada, while maintaining a strong portfolio of direct project assistance for mineral projects, also provides funding for the wider development agenda. Japan’s presence in this area has been limited, and China is noticeable by its absence. Japan tends to focus more on the business and technical aspects of the mineral sector in its engagements. Through financial and technical support, it directly aids its companies in accessing assets abroad. China, under its Belt and Road Initiative, is also using key investments in infrastructure and energy projects to open up regions for mineral investments. For the EU to play an effective and credible role in the mineral and development agenda, it would need to undertake resource diplomacy as practised by Australia and Canada. The EU can play an important role in institutional capacity building in raw material producing countries, as does Japan. Funding for multilateral initiatives, operated by institutions such as the World Bank and the IMF is an option. This is particularly useful as the EU’s in-house capacity to engage in mining related bilateral projects is limited. It can also fund and support international initiatives such as the EITI, NRGI and IGF that contribute to the acceptance of international standards for transparency and mining practices. The EU can provide support to its own companies in operating abroad, particularly in developing and incorporating responsible mining practices. In addition, it should consider initiating protocols for monitoring of its company operations abroad. The research shows that the government oversight, for many industrial countries, of their mining company operations abroad is weak. This is particularly in holding companies to account for their actions in developing countries, assisting home based companies in acquiring the skills for responsible mining practices and in meaningfully addressing the linkages and industrialisation agenda. The EU can provide the much needed consensus and direction here. The conclusions for the EU from an analysis of its own engagement and that of other industrial countries is clear. The EU needs to take into account the existing instruments available to progress the inclusive growth agenda. It needs to consider efforts already undertaken by others and consider further contributing to such efforts. Working with both the industrial and developing countries, it can make a meaningful contribution to the minerals and development agenda – one from which all parties can benefit