Ian Bannon & Paul Collier - Natural Resources And Violent Conflict:Options And Actions

429 Pages·2003·1.9 MB·English

by  Paul Collier, Ian Bannon

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iolent conflict can spell catastrophe r Aut Natural
for developing countries and their a e
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neighbors, stunting and even u
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reversing the course of economic e clo Resources
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growth. Recent World Bank research on the Di
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causes of conflict and civil war finds that the u blic and Violent
countries most likely to be blighted by conflict r u
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are those whose economies depend heavily e
on natural resources. Natural Resources s Conflict

and Violent Conflict: Options and Actions a
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first explains the links between resource d
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dependence and conflict and then considers V ori
what can be done to help reduce the risk of io uth Options and Actions
civil war in these nations. le e A
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In this collection of previously unpublished t o
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essays by experts in the field, contributors Co Dis
consider the risks of corruption, secessionist n blic
movements, and rebel financing. They also f u
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consider the roles played by government, the c
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development community, and the country’s
population and propose an agenda for
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global action. Focusing on what we can do z
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collectively to diminish the likelihood of o
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civil war, contributors to this volume suggest ut
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practical approaches and policies that could be e
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adopted by the international community— s
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from financial and resource reporting Ba scl
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procedures to commodity tracking systems and
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enforcement techniques, including sanctions, on bli
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certification requirements, and aid a P
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conditionality. A fascinating look at the results d

of important new World Bank research, this C
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book represents an important addition to the l
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dialogue on development. e d
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h Ian Bannon and Paul Collier
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ISBN 0-8213-5503-1 s
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Natural Resources and
Violent Conflict

Natural Resources
and Violent
Conflict
options and actions
Ian Bannon
Paul Collier
editors
THE WORLD BANK
Washington, D.C.
© 2003 The International Bank for Reconstruction and Development /
TheWorld Bank
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Washington, DC 20433
Telephone: [phone]
Internet: www.worldbank.org
E-mail: [email protected]
All rights reserved.
1 2 3 4 06 05 04 03
The findings, interpretations, and conclusions expressed herein are those of the
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oftheWorldBankorthegovernmentstheyrepresent.
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ISBN 0-8213-5503-1
Cover photos: Inset—© Peter Turnley/CORBIS
Background—© Adalberto Rios Szalay/Sexto Sol
Library of Congress Cataloging-in-Publication Datahas been applied for.
Contents
Preface ix
Contributors xiii
Acronyms and Abbreviations xvii
1. Natural Resources and Conflict: What We Can Do 1
Ian Bannon and Paul Collier
2. The Natural Resource Curse: How Wealth Can
Make You Poor 17
Michael Ross
3. Who Gets the Money? Reporting Resource Revenues 43
Philip Swanson, Mai Oldgard, and Leiv Lunde
4. Where Did It Come From? Commodity
Tracking Systems 97
Corene Crossin, Gavin Hayman, and Simon Taylor
5. Follow the Money: The Finance of Illicit
Resource Extraction 161
Jonathan M. Winer and Trifin J. Roule
6. Getting It Done: Instruments of Enforcement 215
Philippe Le Billon
v
vi contents
7. AttractingReputableCompaniestoRiskyEnvironments:
Petroleum and Mining Companies 287
John Bray
8. Dampening Price Shocks 353
Patrick Guillaumont and Sylviane
Guillaumont Jeanneney
boxes
3.1 The Azerbaijan ROSC 61
3.2 Highlights of the East Asia FLEG Ministerial
Declaration 63
3.3 MMSD Suggestions Relevant to
Revenue Transparency 74
3.4 Recommendations of Global Witness 77
3.5 Constitutional Basis for the Role of the Auditor
General in Botswana 83
3.6 Control and Monitoring Institutions in Chad 89
4.1 Independent Validation of Legal Timber 116
6.1 Defining Conflict Resources 216
6.2 NEPAD and the G-8 Africa Action Plan 252
6.3 Mandatory Conflict Impact Assessment and Code of
Conduct 259
figures
1.1 Natural Resources and Conflict Risk in Low-Income
Countries 3
1.2 Risks from Natural Resources 5
3.1 Lines of Accountability in the State Oil Fund of
Azerbaijan 85
4.1 Measures to Build Bridges between Related Tracking
Systems 109
4.2 Common Elements of Effective Certification Tracking
Systems 113
4.3 Forest Stewardship Council Chain-of-Custody
Certification 115
contents vii
4.4 Coltan Extraction Chain from Eastern Democratic
Republic of Congo 135
6.1 Economic Supervision Scheme during Peace Processes 253
tables
2.1 Civil Wars Linked to Resource Wealth, 1990–2002 18
2.2 Armed Conflicts in Africa and the Rest of the World,
1989–2001 18
2.3 Civil Violence in Africa by Decade, 1970–99 19
2.4 Resource Dependency: Nonfuel Mineral–Dependent
States and Oil-Dependent States 21
2.5 Mean OECD Tariffs on Processed and Unprocessed
Extractive Products 23
2.6 Mineral Resources and Secessionist Movements,
1949–Present 27
4.1 Major Commodity Tracking Regimes 99
4.2 Forest Product Monitoring Technologies 120
6.1 Overview of International Instruments of Enforcement 225
6.2 UN Security Council Sanctions against Natural
Resource Exports 232
7.1 Companies Deterred from an Otherwise Attractive
Investment by a Country’s Reputation for Corruption,
by Sector 295
7.2 Companies Deterred from an Otherwise Attractive
Investment by a Country’s Reputation for a Poor
Human Rights Record, by Sector 296
7.3 Standards of Compliance among Companies from
Top-10 OECD Exporters, 1999 and 2002 308
7.4 Standards of Compliance among Companies from
Select Non-OECD Countries, 1999 and 2002 309
7.5 How Often Do International Companies Use Political
Pressure from Their Home Governments to Gain
Business Advantage? 319
7.6 How Often Do International Companies Use Tied Aid
to Gain Business Advantage? 320

Preface
RECENTRESEARCHUNDERTAKENBYTHEWorld Bank and others suggests
that developing countries face substantially higher risks of violent con-
flict and poor governance if they are highly dependent on primary
commodities. Revenues from the legal or illegal exploitation of natural
resourceshavefinanceddevastatingconflictsinalargenumberofcoun-
tries across regions. When a conflict erupts, it not only sweeps away
decades of painstaking development efforts but also creates costs and
consequences—economic, social, political, regional—that live on for
decades. The outbreak of violent domestic conflict amounts to a spec-
tacular failure of development—in essence, development in reverse.
Even where countries initially manage to avoid violent conflict, large
rents from natural resources can weaken state structures and make
governments less accountable, often leading to the emergence of seces-
sionist rebellions and all-out civil war.
Natural resources are never the sole source of conflict, and they do
notmakeconflictinevitable.Butthepresenceofabundantprimarycom-
modities, especially in low-income countries, exacerbates the risks of
conflictand,ifconflictdoesbreakout,tendstoprolongitandmakesit
hardertoresolve.
Reflectingagrowinginterestinthelinksbetweennaturalresources
and conflict and the World Bank’s evolving conflict agenda—which is
placing greater emphasis on preventing conflicts—in 2002, the World
Bank’s Conflict Prevention and Reconstruction Unit and the Develop-
mentResearchGroupbegantodefinearesearchprojecttoaddressthis
link. As the Governance of Natural Resources Project took shape, the
discussionmovedtowardpracticalapproachesandpoliciesthatcould
be adopted by the international community. While there is much that
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