Extractive Industries Monitoring

Natural Resources

Afghan mine and hydrocarbon sector is considered to be one of the potential sectors that could contribute a high percentage of revenues to the Gross Domestic Product of the country and provide the state with wherewithal to embark on developmental projects based on its own assessment of national priority. According to British Geological Survey, Afghanistan has over 1400 mine occurrences across the country, which includes some of the largest copper, Iron and off late lithium deposits besides huge presence of hydrocarbon and gem stones. This could elevate the status of Afghanistan among the mineral rich countries of the world, brightens its economic prospects and hopes for transition towards stability. However there are numerous challenges before exploiting the resources in a sustainable manner. The security situation around some of the mine sites is inimical for investment and the state increasingly finds it difficult to extend and maintain sovereignty over them. In order to avoid “resource curse” defining the new conflict situation in the country, it is key to promote and insure that extraction and management of resources is carried out with integrity.

Integrity Watch Afghanistan (IWA) did its first report on the threats and opportunities associated with the first ever biggest private investment in the Afghan Mining sector in 2007. The report was much appreciated by the Afghan government and the international community as IWA pioneered interest in the field in Afghanistan. It set the tone for more work in the sector. The Aynak Copper Contract is one of the best, an in-transition post-conflict state like Afghanistan could achieve.

IWA follows a three-phase strategy to improve integrity in the extractive industry. The first step is to research and write background papers on specific mine and then identity gaps and carry out monitoring. IWA is also member of EITI and part of informal forum which consists of eleven NGOs with interest in mining sector. It consistently engages with the World Bank and other agencies working on the natural resource sector of the country.

Research approach

The research was carried out with the general study of countries that were naturally endowed, with further study of the countries that used their resources in responsible manner and attained development. States which were not allowed to draw proper and inclusive policies for the mining sector and consigned their states and societies to protracted social contract were examined. The new Afghan laws that were specifically designed to create investor friendly environment and other reports by World Bank, Revenue Watch, Global Witness etc.

The research is based on numerous research and policy papers, over 40 in-depth qualitative interviews with members of local communities, government officials, elected members of provincial assembly, World Bank experts, NGOs employees, academics, political analysts, foreign and local advisors placed within Ministry of Mine and Ministry of Finance. Most of the interviews were semi-structured. The author during the course of research developed a healthy relationship with the local communities and won their confidence to the extent that they even shared copies of their property deeds. Though it was difficult to interview women but the male members shared some of the issues that were touching their life seriously.

IWA is writing a Special Report for United State Institute of Peace (USIP) on potential of natural resources in stabilizing the country. The report looks at peace-building through the human security lens and provides best and worst case scenarios.

Background Research Paper

Integrity Watch Afghanistan is conducting research to write a general background paper on mining sector, assess the situation and use the paper to devise monitoring mechanism and work towards ensuring that the extraction right is actually is implemented as per the content of the contract and International Best Practices in the mining sector. The philosophy behind the approach for IWA is to become independent sources of data.

The Background research paper will highlight the changes adapted by the Afghan state to create an enabling environment for private investment through serious and large scale amendments in old laws and creation of new ones. It will look at the capacity of state institutions, coordination among various line ministries, the role private sector can play and the space Civil Society Organizations could fill to see that extraction benefits all stakeholders without marginalizing and jeopardizing anyone’s interest.

There will be specific background research papers carried out for Aynak Copper Mine and Hajigak Iron Mine to look into communities’ perception, expectations, entitlement claim to land and challenges before private investors. IWA plans to have soil and water sample from the region and analyze them to use them for comparison once after a fixed period. The baseline to be objective will select another site with similar demography sans mine to see the impact of extraction on the communities living in close proximity to mine.

Baseline Report

The planned base-line report will draw from the background research paper and define indicators that would help us assess social, environmental changes to the closest degree of accuracy, health issues, social tension, water issues, economic development, private sector evolution, social investment and social capital to name some. It will identify areas of concern and mobilize support to seek reform and protections.

Monitoring Approach

Integrity Watch Afghanistan will build on the work it has initiated and will draw monitoring mechanisms founded on the base line research to see that company compliance is of the international standard in extraction and commercial production of copper from Ayank so that there is limited adverse impact on the environment and social set up around the site and population living downstream. The monitoring will be conducted around the year by team elected by the local communities from among them, through a fair and transparent process. The team will comprise of qualified person of integrity who will flag incidents or environmental changes on time so that avoidance and mitigation plans can be drawn to save lives and environment. It will advocate that state apparatus are put to effective utility in delivering services to communities and monitor company’s activities.

What Next?

IWA has devised plans to organize different forums with government of Afghanistan, companies and civil society organizations to generate more interest in the sector and take an early and active start in checking deviational steps and seek timely intervention through deliberative process. This is believed to strengthen momentum for better management of the natural resources of the state and to avoid resource conflict.