Towards justice in the mining of critical minerals

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Suneeta Kaimal, the president and chief executive of the Natural Resource Governance Institute, talks to Critical Takes about:

• The work of NRGI (to 02:16)
• Being on the UN Secretary General's panel on critical minerals, and what's happened since (to 10:30)
• The challenges for low- and middle-income countries and the need for "strategic neutrality" (to 18:12). 
• Why Publish What You Pay changed its name and mission (to 26:32)

 

Here is a transcript of the interview, which has been edited for clarity.

Diarmid :

Hello, this is Critical Takes on Corporate Power and I'm Diarmid O’Sullivan. As we know, the climate crisis has spurred global demand for so-called critical minerals, which are needed for the energy transition away from fossil fuels.

But as we also know, mining has a long history of profit-driven exploitation in many countries around the world.

So how can we ensure that the drive for critical minerals is just? I'm delighted to be talking about that question with Suneeta Kaimal, who is the president and chief executive of the Natural Resource Governance Institute or NRGI for short.

Suneeta, thanks very much for making time to talk. Perhaps you could start by briefly explaining to listeners what NRGI is and what it does.

 

Suneeta Kaimal:

Absolutely. The Natural Resource Governance Institute or NRGI is an independent not-for-profit organization, and we were founded on the belief that oil, gas, and minerals actually shape the trajectories of society, whether that's their environment, the economy, their politics, even the relationship between citizens and government.

And for people in low- and middle-income countries the extractive sector has been a source of potential for public money, for jobs, for better quality of life, but it's also been a source of false promise, often leading to corruption and conflict, inequality, environmental destruction and poverty.

In fact, 1.2 billion people live in poverty in economies that are dependent on oil, gas, and mining. So at NRGI, we believe that improving the governance of the sector, meaning the rules of the game, who benefits, who is accountable, who actually decides what the future will hold, can have a catalytic effect to build more inclusive, more resilient and ultimately more prosperous societies.

So at NRGI, our focus is on unlocking sustainable development and advancing just transitions for people in low- and middle-income countries.

 

Diarmid:

The UN Secretary General created a high-level panel to consider how to ensure equity and justice in the mining of critical energy transition minerals. And you were a member of that panel, which published its report just over a year ago.

Can you talk about what it was like to be on the panel and, and what its main conclusions were?

 

Suneeta Kaimal:

Absolutely. The impetus for the panel was a concern from the G77 countries that the energy transition basically risked running roughshod over the poor.

And so in response, the Secretary General launched a panel back in December of 2023, and the aim was to develop principles that could support an equitable transition to renewable energies and also harness critical minerals for sustainable development. And that's a really tall order.

The panel was super-unique in several different ways. First of all, it brought together different movements, all of whom are essential for different reasons to the achievement of this mission, whether that's human rights or in the environment, climate, indigenous people's development or labor.

It was one of the very few places where civil society, investors, industry, and also the major players who are involved in critical minerals, whether it's China, the US, the EU and those low- and middle-income producing countries could be at the table all together. The starting point was that equity and justice are essential for, not obstacles to, climate action, which is too often how it's presented.

We had only four months to develop these principles, which is an insane timeline, but in some ways actually that speed served us because we didn't necessarily have the time to debate and deliberate. And that's where the fact that we as civil society showed up prepared and ambitious and pushing hard, really made a difference.

Our starting point as civil society was to make sure this panel did no harm, to really ensure that the gains that we have made over these past few decades were sustained. Our hope was to actually raise the ambition that we felt was necessary for the massive change that's required to upend these longstanding inequities.

The final report is just that, a report, and it contains seven different principles. The principles cover areas that you would expect, first of all, being founded in human rights, the importance of fair trade and investment, a focus on transparency, accountability, anti-corruption, the value of multilateral cooperation, the importance of environmental protection.

But the report also really importantly, emphasizes fostering development through value addition, through benefit sharing, through economic diversification.

One of the innovations of the report, and something that panel members actually agreed on from the very beginning, was that those principles had to be married with actions that could actually bring those principles to life.

So there's a call to design equitable targets on circularity to establish a global mining legacy fund to address derelict or abandoned mines. There's an explicit call for a traceability, for accountability initiative and … specific emphasis on value addition. That's the area that we hear is the priority for low- and middle-income producing countries.

And Diarmid, you’ll love this: it was named the H League. You gotta love the UN with their acronyms, but at least this one made us sound like we are a group of the superheroes.

 

Diarmid:

What was the H League?

 

Suneeta Kaimal:

High level Expert Advisory Group.

 

Diarmid:

Someone had fun coming up with that!

 

Suneeta Kaimal:

Yeah, exactly. But the point of the H League at its core was to really maintain these unique elements of the panel, including the fact that you had a civil society voice alongside these voices of other stakeholders around the table, and mindful that we only had four months to develop the report to really ensure that we had a path to ensure that we could follow up on the work of the panel.

 

Diarmid:

Almost the first thing that the report says is to emphasize the centrality of human rights. Was there any difficulty in coming to those conclusions, as in, were there people from the governments or industry who had to be persuaded to go along with certain language, or did they go along with it fairly easily?

In which case I might be a little bit questioning how, if they went along with it easily, how strongly they actually held [those beliefs]. Was that a difficult one to get people to agree on?

 

Suneeta Kaimal:

At the end, the co-chairs of the panel said that they knew that we would be successful if everyone around the table was a little bit uncomfortable and no one really got fully what they wanted. And I think that that was really true.

Again, that's where the speed served us. One of the things that I am most proud of is that we brought together this unusual and unlikely coalition of civil society organizations that continues even today, and we were able to agree a common set of principles within civil society that was endorsed by over 300 different organizations.

That served as the backbone of the report. I think that clarity of purpose and thought then helped to shape that discussion with the other stakeholders. And of course there were disagreements and deliberations at different points in time, but the fact that we showed up when it mattered and were part of every discussion and kept pushing those key points, and again, had clarity on those key points made a big difference.

But one year on from the launch of the report, implementation hasn't gone exactly as we had hoped. Just recently at Climate Week in New York, we held a round table with one of the former co-chairs, Ditte Juul Jørgensen, who's DG Energy [head of the Director-General for Energy at the European Commission]. And we also gathered many of the non-state actors in the UN agencies to just like take stock of what has happened in the past year.

And I'll say that the upshot is a lot is being done. There's a lot of action happening in different corners. But the UN 80 reforms [a reorganisation of the United Nations] have really slowed the possibility of new multilateral initiatives, even ones that feel like they're at the very heart of the UN mandate on peace and security and development.

Now, there are glimmers. UNIDO, for example, has launched a multi-stakeholder alliance for critical minerals that could serve as a future forum for these kind of discussions. The EITI (Extractive Industries Transparency Initiative] and OECD are working on a new standard around traceability. The Columbian government has just tabled a resolution for discussion at in December on a binding agreement to address illegal mining and the governance of transition minerals and a number of civil society organizations, including NRGI, are pushing for the inclusion of justice and equity and mineral supply chains in the COP 30 agenda. And this was a point that was raised also in the recent Addis Declaration after the Africa Summit.

So there is momentum and action, but I think there's still this question of whether it's going to add up in the way that sees the kind of change that justice and human rights and the centrality of these principles and their uptake really requires.

 

Diarmid:

If I can play devil's advocate for a moment: we know that the context is going to be increasing demand for these minerals from the big economies. There's the mining countries whose governments need revenue. Some of them are in debt crisis and they need revenue sooner rather than later. Of course, there's the mining companies which exist to maximize their profits.

And then on the other side we have civil society, whose role is to provide counter-pressure on behalf of society or nature in the long term. But civil society is obviously under a lot of financial and political strain in many places at the moment.

So how do you think this is going to play out ? Or to put it a different way: are there strong enough voices within governments and industry who are prepared to do more than pay lip service to those principles that you've elaborated?

Because of course one can talk a good talk, but if the reality is that what really matters is to get the mineral out, then everything just becomes mitigation after the fact.

 

Suneeta Kaimal:

I think the global context presents a number of possibilities in a positive sense, and also in terms of obstacles to the successful implementation of these principles. They are only principles, and it requires action on the part of governments, companies, civil society, multilateral institutions, to bring them to life.

We are seeing an increase in more overt resource nationalism by those consumer countries, particularly but certainly not only in the US, and there's also these heavy kind of yo-yoing tariffs on mineral imports in mineral-producing countries, which is a significant impact. And of course the Trump executive orders and the weakening of due diligence.

There's been a general pushback on regulation [being seen as] as actual hurdles to mining and to mineral processing instead of enablers. And more generally, as you said, there's been this move away from good governance and from multilateral engagement. Of course you have the gutting of USAID, which funded a lot of extractive industry governance [work].

And in the US you've seen things like the pause and then renewal of the Foreign Corrupt Practices Act. It was reinstated in June, but with much fewer resources and seemingly more focused on investigating foreign firms rather than on the US.

And you're also seeing this super-transactional approach. You look at the Ukraine “minerals for security” deal, the [Democratic Republic of Congo] raising its hand for the same, even with the EU’s Critical Minerals project.

So there's a lot of factors there that would seem to pull us away from this possibility of bringing the principles to life. But at the same time, the demand and what's behind it, not just the energy transition, but the race for dominance in AI for defense and the desire [of Western countries] to break China's dominance in the sector means that there is leverage for these low- and middle-income countries.

The question is, how do they take advantage of that leverage in negotiation with these big powers. Fundamentally, governments still need to assess what are you gaining and what are you giving up in any deal. I was reading the other day that the South African minister for mineral and petroleum resources said if the US imposes high tariffs, [they will] look for alternative markets, right?

So strategic neutrality is really key for these countries not to get swept up into this geopolitical jockeying, but there's also the possibility to use regional collaboration or coordination for leverage. We've seen this a bit more in the African continent with the African green mineral strategy.

Latin America hasn't yet developed as much regional coordination, but there certainly are discussions underway. I do think that it's still possible to leverage these multilateral processes. For example, the African group of negotiators is currently pushing hard for the inclusion of transition minerals and language based on the principles that are in the UN panel report on the COP 30 agenda, as part of this outcome document.

And in general, countries are pushing more to move up the value chain and away from that pit-to-port model.

 

Diarmid:

People talk about how Indonesia has been able to restrict nickel exports as a way of forcing companies to process the minerals in-country. That's sometimes cited as an example of a country which is acting more autonomously.

But Indonesia is quite a large and prosperous middle-income country which has had stable government for quite a long time. Not all lower-income countries have either the scale or the confidence or the bureaucratic capacity to be able to do something like that.

So when we look across the global South, the capacity of different mining countries to achieve that strategic neutrality and negotiate for their own interest without being bullied by bigger powers is going to vary very much from one country to another, isn't it?

 

Suneeta Kaimal:

It is. And value addition is a really tricky beast. It's all the rage at the moment and in some ways it mirrors the discussions on new discoveries where there's this risk of overpromising and under-delivering at the end.

In Ghana, we recently did some analysis on a proposed lithium refinery and it showed that they could build a refinery, but it would cost the government hundreds of millions of dollars through subsidies or potentially even lost revenue. And at the end of the day, that's money that could go to other priorities for the public.

Now that hit on the public finances could be worth it if ultimately it would generate more jobs or stimulate other industries. But instead it was projected that this refinery, at the end of the day would lead to about 200 jobs.

So it's that kind of cost-benefit analysis that is really essential to inform value-addition priorities. Chile, for example, is closing one of its copper smelters just due to the environmental and public health impacts and there’s a study that the environmental and social harms of Indonesia’s nickel smelting, which you mentioned, could ultimately outweigh the economic benefits.

The potential is there for this value addition to bring greater economic benefit, but the precise shape of that potential has to be really carefully weighed and rigorously scrutinized to understand the shape of the market and the trade-offs. And that work really requires creativity to look across regions at what regional collaboration could look like, to look across sectors, to build really coherent plans.

And ultimately, all of this has to be subject to public dialogue so that the people know what they're signing up for and why.

 

Diarmid:

That seems like a good moment to talk about Publish What You Pay. It’s civil society organisations which are in some cases doing the analytical work, as you do [at NRGI], but are also trying to generate that discussion within society and apply counter-pressures to governments or companies that want to push ahead with mining without thinking about all these complexities.

Publish What You Pay has been a global civil society coalition, which many listeners will probably have come across, or may be part of, which has been working for more than twenty years to promote transparency and accountability – and I should mention to listeners that I worked with Publish What You Pay for for some years when I was at Global Witness.

But last month the coalition changed its name to the Resource Justice Network and broadened its mission beyond transparency and accountability to talk about securing justice and equity in the energy transition. Very similar language to the UN Secretary General's panel report.

As someone who's known that coalition for a long time, what's your take on that change of name and and mission? What does it tell us about the world of resource extraction?

 

Suneeta Kaimal:

I should reveal my bias as well, which is that NRGI is of course a member of Publish What You Pay, now the Resource Justice Network. I actually served as the first chair of the global council and we have a very long-standing partnership.

The headline for me is that this evolution is timely, it's necessary, and frankly, it's spot on. And in my view, it's the latest evolution in a series of evolutions in the natural resource governance movement, reinventing itself to be relevant and to be impactful.

And you'll recall Diarmid, as you mentioned earlier, you were at the the heart of this movement twenty years ago. It was the birth of a global movement: the Extractive Industry's Transparency Initiative, Publish What You Pay. There was this focus on transparency of payments and the development of this idea of the decision chain, trying to capture good practice on what it would look like to advance governance across the value chain.

That was the first decade, this narrow focus on transparency and payments in particular. Then there was this second evolution or second wave where we moved the transparency agenda beyond revenues to focus on disclosure of contracts of beneficial owners of commodity sales, of state-owned enterprises and more.

We focused increasingly on the use of that data for accountability and for policy reform in particular. We started to become more mindful that there was this gap between policies that were being developed and ultimately practice. That was the second wave.

Then came 2020. You may not wish to remember those days! This was waves of populism and the closing of civic space. Again, the rise of China. All of this exacerbated by the global pandemic that gave rise to the first increase in global poverty since I think 1998. Those really increasing debt levels for low- and middle-income countries. We saw a deepening in equality, radical geopolitical shifts and on top of all that, of course, an accelerating climate crisis.

And so frankly, radical changes needed to happen. And we are seeing radical changes in the funding landscape for resource governance as well. This was a really tremendous moment of inflection, not only because of what was happening in the resource governance space, but also because we are seeing transformations in other movements: the transparency, participation and accountability movement, and also in decolonizing development.

Now, transparency, participation and accountability was a movement founded on the premise that these approaches were essential and potentially a kind of shortcut for democratic governance. But around this time in 2020, there was some fatigue around the work, maybe a growing awareness by funders and also partners that despite the gains that we've made on transparency and accountability and participation, they hadn't necessarily translated into greater equity or greater benefits for citizens, which were really at the core of what we were trying to do.

This doesn't discount the value or necessity of transparency or participation or accountability, but it does call for some like reconceptualization of the field to meet those initial and persistent aims around addressing equity.

And as I mentioned, this wave also coincided with momentum for global organizations to decolonize development. And with that, a very explicit focus on power, political economy analysis and on systems change. So. All of these waves have required reinvention, and that is what we as NRGI, but also what Publish What You Pay has done.

Our work collectively has shifted to helping countries to navigate and define the energy transition as an opportunity, not just a loss for people in low- and middle-income producing countries, and to help them to chart their own economic and energy future.

And this newest evolution of our work requires different partners, like the kind of coalition we were able to develop under the UN panel. Bringing the knowledge of resource governance to different communities, to demystify what just transition means to the climate community, for example.

And so this rebirth, in my view, is much needed, but we're still finding our footing. I think what's different Diarmid is that twenty years ago you and I and many, many others were building a movement. It was the basics of knowledge around oil, gas, and mining, the basics of transparency and good governance. But now, twenty years on, we actually have the opportunity to leverage this cadre of really sophisticated, knowledgeable civil society and government and company partners and reformers to meet the challenges of today.

 

Diarmid:

I've thought a great deal about the old days and the role that I played and what our assumptions were. And of course the assumptions that I and my colleagues were working were quite different from NRGI, which always had quite a sophisticated and holistic view of natural resource governance. Whereas for us it was primarily a moral problem.

But I think, yes, civil society in all its diversity is going through a bigger evolution now towards thinking about structural change. Clearly the structures that we were trying to influence before aren't working terribly well, so it's necessary to think about what other ones would look like.

This has been a really rich and interesting overview, so let me finish off by asking a question that I ask everyone: given all that you've said about the complexities of the challenge and the lessons that people have learned from the past, what makes you optimistic about the future?

 

Suneeta Kaimal:

That is a tricky question these days, but I will say if we don't have optimism, then what's the point and why are we in this business? For me, what gives me that optimism is the strength that I see in civil society and the resonance I see with our agenda. It feels in many ways that resource governance is, to paraphrase Victor Hugo, an issue whose time has come.

What remains now is for us, not only civil society, but also those reformers in government and in industry, to seize this moment and really to make that transformative change to define a new mining paradigm. And I'm confident we can make good progress to do it well.

 

Diarmid:

On that note of qualified optimism,  thank you very much for a very wide ranging and informative interview.

 

Suneeta:

Thank you so much, Diarmid. It's been a pleasure to be here.

 

(This is the end of the transcript)