Natural Resources and Violent Conflict - WaterWiki.net

getting it done 259Box 6.3 Mandatory Conflict Impact Assessment andCode of ConductThe history of international trade relations is replete with practicesperpetuating human rights abuses, corrupt and coercive political rule, aswell as underdevelopment. To ensure that businesses and their home governmentare not contributing to human rights abuses and do not benefitfrom such abuses, a number of initiatives have suggested that prospectiveinvestments and commercial operations should be screened through amandatory conflict impact assessment and, once approved, should followa mandatory code of conduct (see Gagnon, Macklin, and Simons2003).The collusion or incapacity of many local authorities means that alegal framework at an international or home-country level should regulatedubious trade relations. Such regulation should focus on “conflictaffected”or “conflict-prone” countries, a status to be decided by thehome government or an international institution such as the UnitedNations Security Council. The conflict impact assessment as well as amonitoring of the code of conduct could be conducted by a specificagency or working group legally mandated by the home government orinternational institution, such as the International Finance Corporation.The assessment and recommendations of the screening agencies shoulddetermine the availability of trade finance services provided by insuranceand export credit domestic or international agencies. Althoughsuch regulation is unlikely to have any impact on the most dubiousforms of conflict trade involving “resource-for-arms” brokers, it has thepotential to positively influence the impact of capital-intensive projectson governance and conflict prevention. Acting as a potential form ofeconomic sanction, however, such an instrument should itself be subjectto careful independent scrutiny including by civil society representativesfrom host countries in order to foster, rather than deter, investmentscontributing to peace building.The Global Mining Initiative was criticized by some mining specialistsas being an “engineering engagement,” and many critics of themining industry boycotted the initiative. The initiative resulted in thecreation of the International Council on Mining and Metals, whichhad its first meeting in December 2002. Thus it is too early to evaluateits effectiveness.The oil and gas sector has also recently conducted an industry reviewof social issues relating to oil and gas projects (IPIECA and OGP2002). The review was not independent of the sector; rather, it wasconsultative and conducted through the International Association ofOil and Gas Producers’s Social Impact Assessment Task Force. Despite