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United Nations Secretary-General António Guterres will convene leaders and ministers of 18 countries heavily dependent on extractive industries to a roundtable on Tuesday. The leaders’ meeting comes as the world continues to suffer from the severe social, environmental and economic impacts of COVID-19. On the table are options to transform the sector to support sustainable development and a just transition to the green economy.
“This sector can avoid exacerbating inequalities by ensuring the equitable distribution of the benefits of the development of the extractive industries, in accordance with the right to development,” said United Nations Secretary-General António Guterres. “We need to improve the governance of extractive resources through more effective rules and enforcement linked to environmental sustainability, transparency, inclusive decision-making, accountability, access to information and compliance. and the protection of human rights. ”
Many developing countries that depend on extractive industries face severe budget deficits from COVID-19 and have rolled back social and environmental safeguards to attract investment and boost their economies in the short term.
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Often these countries are rich in the commodities needed for the renewable energy revolution and clean technology, including lithium, graphite, manganese, cobalt and essential raw materials, providing a window of opportunity to take advantage of this growing demand.
The production of some of these minerals could increase by nearly 500% by 2050 as the use of clean energy technologies increases, while the carbon footprint associated with their production will account for 6% of emissions generated by clean energy. fossil fuels.
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Aligning the sector with sustainable and circular practices is a necessity.
Currently, mineral resource extraction plays a dominant role in the economies of 81 countries which account for a quarter of global GDP. Yet these countries are also home to half of the world’s population and almost 70% of those living in extreme poverty – a glaring sign that extractive industries are not contributing to poverty reduction or the SDGs. Governance and mismanagement of revenues, corruption and illicit financial flows continue to undermine these collective efforts.
The over-reliance of many economies on extractive industries has raised awareness of the need for greater diversification and redistribution of income to build inclusion and resilience.
It is also necessary that communities and vulnerable segments of the population, such as women, indigenous peoples and youth, receive adequate support to benefit from the sector and have access to recycling when necessary to ensure a successful energy transition. .
The roundtable will examine how countries, the private sector, civil society and other stakeholders can come together to address a range of issues in the extractive industries sector that affect economic and social development and environmental protection. .
New United Nations Guidance Note on Extractive Industries Transformation
In a new guidance note released today, “Transforming the extractive industries for sustainable development”, the Secretary-General noted that the abundance of raw materials had often, counterintuitively, locked many developing countries into patterns that hindered long-term economic development.
“The extractive industries,” he said, “have immense potential to stimulate growth, support sustainable development and reduce poverty in developing countries. Yet the actual contribution of extractive industries to sustainable development in commodity-rich countries has often been bogged down by financial, economic, governance, social and environmental concerns, leading to the so-called resource curse or the paradox of l ‘abundance.
A change of mindset is needed
A shift in mindset is needed to shift from short-term economic considerations to long-term financial risks and the broader benefits associated with a just transition to a net zero future, which takes into account social, environmental and cultural externalities.
Member States are urged to establish an Extractive Industries Working Group to lead international efforts to transform the extractive industries to support sustainable development and to implement the results of this initiative at the national level.
The guidance note presents 18 recommendations in six areas that include development finance; governance and revenue management; the green economy; a just transition to sustainable systems; technology, innovation and circular economy; and regional and global collaboration.
Financing for development
- Offer debt suspensions for commodity dependent countries.
- Establish a long-term debt swap mechanism for debt-climate / nature swaps.
- Channel Special Drawing Rights (SDRs) to commodity dependent countries to provide liquidity to transform extractive industries.
- Strengthen direct income and property taxation to strengthen the fiscal resilience of the sector.
Governance and revenue management
- Harmonize national standards and further strengthen clear regulatory frameworks to ensure oversight of all companies.
- Strengthen anti-corruption laws and law enforcement.
- End tax havens as vectors of illicit financial flows in the extractive sector.
- Create a common ESG taxonomy and principles to increase ESG funding.
- Reduce the risk of sustainable investments through better coordination between the private sector, multilateral development banks and governments.
- Create tax incentives to encourage sustainable practices in the extractive sector.
A just transition to sustainable systems
- Investing rents from extractive industries in the sustainable development of local populations.
- Establish clear national industrial visions, strategies and policies to support a just energy transition and achieve a circular economy.
- Systematically include civil society, women, indigenous peoples, local communities and those affected by the green transition, in the design, implementation and monitoring of all extractive operations.
Technology, innovation and circular economy
- Reduce barriers to trade and intellectual property, abolish protectionist policies, facilitate technology transfer.
- Make global data collection technologies available, including satellite imagery, to ensure that all countries effectively address climate change.
- Adopt policies that assess the upstream and end-of-life impacts of clean technologies.
- Implement an integrated and sustainable resource management framework based on shared principles.
Regional and global collaboration
- Create or improve regional frameworks aligning the extractive industries with the Sustainable Development Goals, the Universal Declaration of Human Rights, the Convention on Biological Diversity, the Minamata Convention and the Paris Agreement.
- Adhere to and support the implementation of existing frameworks, such as the African Mining Vision and the Escazú Accord.
- Capitalize on the United Nations regional economic commissions strengthen regional coordination and political dialogue on issues, including:
- Harmonize the implementation of carbon pricing and border adjustments.
- Develop a comprehensive framework for traceability and transparency in global value chains.
- Illicit activities, conflicts and cross-border disputes.
- Transparency of exchanges and financial flows.
- Strengthen fiscal frameworks for the extractive sector to encourage added value and economic diversification.
High-level meeting participants
United Nations Secretary-General António Guterres invited heads of state and government, as well as key stakeholders from the extractive industries, civil society, the private sector and United Nations officials. The event will include opening remarks by UN Secretary-General António Guterres and closing remarks by UN Deputy Secretary-General Amina Mohammed. It will be moderated by Sherwin Bryce-Pease, Head of the United Nations Office of the SABC.
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