There are serious problems of governance and lack of transparency at the national level in Africa, even “rampant corruption in the system”. Although abundant with various natural resources, the problems of governance are restraining the people to get their share of the profit.
Most countries have rather weak legal and governance frameworks to regulate the exploration. Governments are unprepared to guarantee people’s fundamental social and political rights when planning and making deals on the utilization of their natural resources.
The people of all countries must know where and how their public funds are generated and spent. The principles of good governance must be applied to all the mechanisms of decision-making in society, at workplaces and in the markets, including the private enterprises.
By supporting transparent and efficient policies we can pave the way for a society in which the management of natural resources is sustainable, resource-efficient and democratic and the revenues benefit the country of origin and are dispersed throughout the population.
Cooperation between Nordic and developing countries has had many dimensions over the last decades. Joint research, development cooperation, policy dialogue and trade have generated exchange of views and sharing of experiences on development.
The Nordic Africa Institute (NAI) has been one vehicle with its relevant research and vibrant networks in Africa that has increased knowledge and fostered dialogue between Nordic countries and their Southern partners. I congratulate the Institute for having given the Nordic-Africa dialogue a venue for already 50 years.
Today, when many African countries struggle with dilemmas of turning the threatening resource curse to green future opportunities, we partners in the North can again play a role.
Through its research cluster Rural and Agrarian Change, Property and Resources, NAI continues to generate evidence based information on natural resource governance and land use that can serve as a basis for better informed policy making.
Openness and accountability
But what are our experiences that could be useful to our Southern partners? To anchor my points into practice, I will start with a short memory from my trip to Tanzania last June.
In Mufindi, Tanzanian peasant Mr. Lunyungu showed his plantings of pine to our Finnish delegation. To secure his right to the plantings and its return, Lunyungu had applied for a certificate to the land from the village. But the local process is slow and tangled – and Lunyungu was afraid that before he gets his certificate neighbors will steal and sell his trees.
The previous day, the Minister for Natural Resources, Professor Khamis Kagasheki, had conveyed to us that in his sector, there are serious problems of governance and lack of transparency at the national level, even “rampant corruption in the system”.
The country seems to be abundant with various natural resources but the problems of governance are restraining the people to get their share of the profit.
In addition to Tanzania, this example could, more or less, be from quite a few other African countries. While this new treasure hunt is going on, most governments are quite unprepared to guarantee people’s fundamental social and political rights when planning and making deals on the utilization of their natural resources.
Countries have rather weak legal and governance frameworks to regulate the exploration. Thus, deals are made in secret and corruption, for its part, prohibits people to participate – and get their share of the revenue.
This leads me to one experience we want to share with our Southern partners: transparency and sharing of information is inherent to a democratic, inclusive society.
All Nordic countries are leading in international rankings of non-corrupt states. This is largely due to the introduction as early as in the 18th century of the right of the public of access to information and thus transparency of the public authority.
Openness, right to information and access to decision-making are fundamental principles of the rule of law and good governance. The people of both developing countries and donor countries must know where and how their public funds are generated and spent.
The principles of good governance must be applied to all the mechanisms of decision-making in society, at workplaces and in the markets, including the private enterprises.
In addition to states, this demand for accountability, openness and transparency concerns all non-state actors. In this sense, the importance of accountability, openness and transparency of the enterprises operating in the natural resource sector cannot be stressed enough.
They are promoted, for instance, by the EU Forest Law Enforcement, Governance and Trade Programme (FLEGT), which aims at preventing the illegal felling of timber, and the Extractive Industries Transparency Initiative (EITI), which should be extended to cover renewable resources as well.
We also welcome the new FAO Voluntary Guidelines on Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of Food Security, VGGT, that aim to protect land ownership needed for food security. These voluntary action and mechanisms can be a good start for accountability by inspiring legislation. Enterprises must in fact be responsible to society for the economic, social and environmental impacts of their operations with respect to the entire supply chain.
I am content that corporate social responsibility is increasingly part of enterprises’ core business, not least because business involves new risks. In addition to voluntary corporate social responsibility, the international standards and guidelines should be strengthened.
Finland promotes corporate social responsibility jointly with enterprises and will seek to bring about concrete procedures that benefit the most progressive actors. Finland supports, among others, the United Nations Global Compact and the OECD Guidelines for Multinational Enterprises as well as the UN Guiding Principles on Business and Human Rights.
Another answer lies in the strategic partnerships with civil society. As regards natural resources governance, civil society is also an important actor and strategic partner in the implementation of human rights-based approach.
Civil society demands accountability from the government, public authorities and enterprises and in so doing strengthen democracy and development owned by the people. They can provide the sometimes needed 3rd opinion in creating socially equitable land use practices, when disputes between governments and companies need to be solved.
Finland notes that developing countries need assistance in improving their tax systems so that their revenue collection as well as its allocation to development can be intensified. Yet, this must be combined with global action to uproot tax evasion and curb the illicit capital flight, including the prevention of transfer mispricing.
Stability, transparency and accountability of global financial markets must be increased, for example by adopting international financial transaction taxes. Revenue accumulated this way can be directed to development and climate change financing.
I also support country-by-country reporting for multinational companies that is currently being discussed within EU within the new Tranparency and Accounting Directive, as the basis for informed decision making in taxation and domestic resource mobilization is accurate information.
This new treasure hunt is, however, not just a threat but also an opportunity. It can bring new resources to tackle challenges of development that are now ever more acute when the new post-2015 development agenda starts to shape, while we are still working hard to achieve the MDGs. Better domestic resource mobilization adds ownership in practice, and democratic ownership must be accompanied by good policies and increased accountability by governments and markets.
But let me get back to Mr. Lunyungu, whom I told you about in the beginning. What does all this to do with him? The answer is this: Development cooperation and global policy must be able to identify and address problems Mr. Lunyungu and his fellow peasants in the South are facing.
By supporting his minister to set up transparent and efficient policies we can pave the way for a society in which the management of natural resources is sustainable, resource-efficient and democratic and the revenues benefit the country of origin and are dispersed throughout the population.