Region’s Governments Advance towards a Compact on the Governance of Natural Resources, with ECLAC Support

Santiago, January 21, 2015.- Authorities from several Latin American and Caribbean countries and ECLAC advanced towards creating a regional agenda leading to a compact on the governance of natural resources, at a meeting held at the headquarters of this United Nations regional commission in Santiago, Chile, on Monday 19 January.

Ministers, Under-Secretaries and experts from international agencies took part in the high-level roundtable ““Towards a LAC Vision on Natural Resources Governance for Equality”, organized by ECLAC in conjunction with Norway’s Ministry of Foreign Affairs.

Participants were informed about Norway’s experiences in social and political compacts to harness the benefits of exploiting natural resources, and asked ECLAC to keep on working on such an important subject of the development agenda arranging an exchange between the national authorities of Latin American and Caribbean countries to create a common vision and a reflection forum about the compact on natural resources governance.

The meeting was attended by Ministers, Under-Secretaries and senior representatives from Brazil, Chile, Colombia, Dominican Republic, Ecuador, Norway, Peru, Uruguay and Venezuela, as well as officials and experts from the World Economic Forum, the World Bank, the Extractive Industries Transparency Initiative (EITI), the German Agency for International Cooperation (GIZ), the United Nations Economic Commission for Africa (UN-ECA) and the Economic Commission for Latin America and the Caribbean (ECLAC).

The event was opened by Alicia Bárcena, Executive Secretary of ECLAC, who stated “We need to make definitive progress towards greater and better governance and use of natural resources, so that the latter can contribute to a more diversified economy that is more environmentally sustainable, and that creates synergies in terms of employment, well-being and sustainable long-term economic development for the region”.

Ms. Bárcena said that ECLAC’s governance proposal sought to govern ownership, appropriation arrangements and the redistribution of productivity gains, so that all of society benefits from the endowment in natural resources.

The Executive Secretary added “Improving the governance of natural resources in the region requires countries to build the political consensus and compacts needed for States to capture and channel investment from resource income efficiently into achieving their goals of sustainable and inclusive development”.

Ms. Bárcena explained that Latin America and the Caribbean was rich in natural resources, and some of its countries are among the world’s main producers of copper, iron, silver, molybdenum, lead and tin, while in 2012 it had the world’s second largest tested oil reserves (after the Middle East) - with 20% of the earth’s total - and 52% of the world’s soya production (16% for meat and maize and 11% for milk). The region also has a third of the earth’s freshwater reserves and 15% of the planet’s farmable land, as well as being a major source of biodiversity.

Norway’s Ambassador in Chile, Hege Araldsen, described her country’s experiences in ensuring that the benefits from exploiting natural resources were enjoyed by the entire population.

According to the Ambassador “Achieving this objective necessitates an inclusive and democratic system, robust and competent public institutions and a society that effectively controls its energy resources”.

At the round table, ECLAC presented its vision on natural resource governance and highlighted the following elements required to build a compact in this area: creating a long-term State policy and strategy to ensure that extraction industries contribute to development goals through productive diversification, structural change and social inclusion; updating countries’ tax frameworks to achieve greater progressivity in State participation; institutionalizing long-term mechanisms for the stabilization, saving and investment of this income; and bolstering the capacity of public institutions to manage socio-environmental and labour disputes associated with the development of extraction sectors.