Briefing :: Natural Resources, a National Responsibility

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BRIEFING


COMMISSION ON SECURITY & COOPERATION 
IN EUROPE: U.S. HELSINKI COMMISSION

NATURAL RESOURCES, A NATIONAL RESPONSIBILITY 

WITNESSES:
SALEEM ALI,
ASSOCIATE PROFESSOR OF ENVIRONMENTAL STUDIES,
UNIVERSITY OF VERMONT

JOSEPH BELL,
PARTNER, HOGAN AND HARTSON

KARIN LISSAKERS,
DIRECTOR, REVENUE WATCH INSTITUTE

THE HEARING WAS HELD FROM 11:00 A.M. TO 12:30 P.M. TIME IN 2325 RAYBURN, 
WASHINGTON, D.C., [SHELLY HAN, POLICY ADVISOR, CSCE], MODERATING 

THURSDAY, APRIL 15, 2010



MS. HAN:  Good morning, everyone.  I’d like to welcome you to the Commission on 
Security and Cooperation in Europe’s briefing on the Natural Resource Charter.  
The commission has the mandate to monitor implementation of the Helsinki 
Accords, which were signed 35 years ago this year.  

And those accords focus on three dimensions:  security, economics and the 
environment and human rights.  At the commission, we tend to focus our efforts 
on issues that cut across all three dimensions.  And in the case of the 
extractive industries, it’s a natural focus for us because we can see where the 
impact of the oil, gas and mining sectors have implications for security, 
implications for economic development, implications for the environment and 
implications for human rights.  

The Natural Resource Charter is aimed at giving countries the tools they need 
to fully develop their natural resources for the good of the whole country.  As 
it was launched last year, I was struck by how far we’ve come in terms of 
bringing the sometimes very difficult conversation of extractive industries 
into the lexicon of world leaders.  But I was also struck by how much farther 
we need to go to achieve real progress on development and improvement of human 
rights.  

In today’s briefing, I hope we can accomplish a couple of things:  First, I’d 
like to come away with a good understanding of the charter itself – how it’s 
being used, how it’s being developed and how it’s actually going to grow in the 
future.  And second, I hope that we can have a candid conversation on what gaps 
remain and specifically what steps the commission itself, the U.S. Congress, 
the State Department, international organization and others can take to address 
those gaps.

Fortunately, we have an expert panel that will make what would otherwise be a 
daunting task a walk in the park.  The full bios of our three witnesses have 
been distributed, but let me introduce them briefly.  First, we’re going to 
hear from two people who were instrumental in developing the charter from its 
inception.  

On my right here is Mr. Joseph Bell, who is a partner at Hogan and Hartson and 
an experienced advisor to developing countries particularly in the extractive 
industries.  And then on my left is Ms. Karin Lissakers, the director of the 
Revenue Watch Institute, who spent a number of years as the U.S. executive 
director at the IMF, as well as a luminous career at the State Department and 
on the Hill.  

We are pleased that we have Dr. Saleem Ali joining us via videoconference from 
the University of Vermont.  Dr. Ali is a professor of environmental studies and 
is actively involved in U.N. projects and most recently published a book 
titled, “Treasures of the Earth:  Need, Greed and a Sustainable Future.”  

I’d like to note for the audience that we will have an opportunity for 
questions from the audience at the end of the statements here, so if you’d like 
to prepare in your mind some questions, you’ll have an opportunity to address 
the witnesses at that time.  So Mr. Bell, if you could start us off with your 
testimony.  Thanks.

JOSEPH BELL:  And the fact that I’m sitting here has nothing to do with 
alienation.  (Laughter.)  It’s simply I cannot fill the seat of the person who 
was here without having my chin on the table.  (Laughter.)  In any case, thank 
you for the invitation to talk about the resource charter.  My colleague, Karin 
Lissakers, who will discuss how the charter was developed and its current state 
and how it fits in with other international initiatives.  I will touch upon 
some of the just basic substantive principles incorporated into the charter.  
And the full document is part of the record.  

As we all know, natural resources – oil, gas, minerals – have been the source 
of many conflicts, much corruption and on occasion great environmental damage.  
Even today, competition is fueling conflicts in the Eastern Congo, the Niger 
Delta and elsewhere.  But natural resources also provide an opportunity to 
support growth and development.  There are successful cases:  Botswana, Norway, 
even the history of the United States.  

Now, resource management can be a thickety challenge for developing countries 
with weaker institutions, with limited human resources and where such resources 
can bulk very large in government revenue.  But success is possible and that 
success is not only a benefit to the country and its citizens, but also to the 
international community in reducing conflict, overcoming poverty and, we hope, 
producing a more stable international environment.  

The charter enhances the likelihood of success by trying to draw together what 
we know about the wise development of natural resources and to provide that 
information in a useful format to governments and societies in resource-rich 
countries.  It’s organized around 12 principles.  The first 10 are really 
directed to citizens and governments in countries having natural resource 
wealth and the other two are directed to the international community and home 
governments – that is, governments that host the companies that do the 
exploitation.  

Furthermore, the charter is actually elaborated at three different levels.  
There’s the general principles, which are about one sentence long.  There is a 
second level of explanation, which is a slightly longer elaboration.  And then 
there’s a rather important third level, which is much more extensive, pulling 
together experience in various countries and elsewhere.  It is a work in 
progress.  We are still receiving comments from many different groups and so 
the final product is still a ways out there.  

Now, under the Extractive Industries Transparency Initiative (EITI), probably 
known to most everybody in this room, there has been much focus on one 
important aspect of resource development:  the transparency of payments to the 
government by private entities or by – not necessarily private entities – by 
producers.  Now, the resource charter reinforces the EITI, especially with 
respect to the importance of transparency, but it goes beyond EITI by looking 
at the entire value chain from the decision to develop or not to develop, the 
development process itself and very importantly, how to use the resulting 
revenues.  

Outside the Anglo-Saxon tradition, natural resources are the property of the 
nation.  And the principles begin with the basic notion they should be used to 
secure the maximum benefit for the citizens of the host country.  The 
implementation of this, simply stated – an unexceptional idea – is, in fact, 
not easy.  It requires many difficult decisions.  Oil, gas and mining projects 
are technologically complex, capital intensive, usually have very long 
investment lives and are affected by highly volatile commodity markets.  
Moreover, if not properly managed, they can impose very significant social and 
environmental costs.  

Getting these decisions right in any country requires good processes, good 
technical knowledge and, in the end, good judgment.  A number of the precepts 
actually involve the technical issues of resource management:  What is the role 
of competition?  What are the options for the fiscal regime?  What basic 
principles should guide state-owned companies?  What are the social and 
environmental risks and how can they be mitigated?  These tools emphasize the 
use of competition to maximize value to the country and the adoption of fiscal 
regimes that have flexibility to adjust to changing economic and social 
conditions over the long periods typically required for resource extraction.  

Certain of the precepts deal with process, especially the importance of 
transparency and public involvement in resource use.  The history of resource 
exploitation is filled with much bad history – secret dealings, private 
enrichment.  The charter emphasizes that these resources are public assets, 
that citizens have the right to information about their development.  Moreover, 
such information is a basic element in getting policies correct and in building 
constituencies that will support such policies over the long term.

On the expenditures side – and this is important – the charter holds that 
resource revenues should be principally devoted to promoting sustained economic 
growth.  Resource development needs to be integrated with the country’s 
long-term development plans.  And the additional revenues should be used to 
accelerate a movement along that plan.  

Now, this may seem an obvious conclusion, but there’s been much debate about 
how natural resource revenue should be saved and how much spent currently and 
on what.  Some have argued that revenue should be deposited in some sort of 
future generations fund with only the interest being spent to support the 
budget.  

While appealing on its face, in fact, the returns on investment and social and 
physical infrastructure within the country should in most cases be much higher 
than the returns available on internationally held funds.  Even more so, when 
one considers the vulnerability of such funds to future rating, particularly 
for poorer countries but also for countries such as our own, it is this 
internal investment that sets the foundation for prolonged and significant 
economic growth – a process which increases the welfare of both current and 
future generations of citizens.  

The charter’s value rely on providing good advice, hopefully wise advice based 
upon experience, as to how a country should go about this critical process of 
converting the wealth in the ground into permanent wealth for its citizens.  
And we will all be beneficiaries where countries are successful in this task.  
Thank you.

MS. HAN:  Thank you, Mr. Bell.  Ms. Lissakers?

KARIN LISSAKERS:  Thank you very much.  Shelly, we really appreciate this 
opportunity to present to the Helsinki Commission on the Natural Resource 
Charter.  My institute – the Revenue Watch Institute – is an independent, 
not-for-profit organization dedicated to promoting effective, transparent and 
accountable management of mineral resources in resource-rich countries.  And my 
team and I have participated in the creation of the resource charter and are 
very much involved in carrying it forward.  

Joe Bell just summarized some of the principal elements of the charter.  I’d 
like to talk to you a little bit about the process and where we go from here.  
The broad goals of the charter are twofold.  The first, as Joe said, is to 
provide a practical guide for policymakers in resource-rich countries, 
particularly developing countries that struggle with the complexities of 
managing valuable, finite, capital-intensive mineral resources and meeting the 
challenges of highly volatile revenue streams these will generate.  

Now, this advice is certainly not limited to developing countries however as 
we’ve seen in the United States with the fight over royalties from minerals 
produced on U.S. federal lands and the difficulty the Department of Interior 
has in collecting those royalties.  The issues we address in the charter are 
widespread and common for mineral-producing regions.

Second objective of the charter is to move the world toward a set of global 
norms for the management of extractive resources that will guide not only the 
producing countries but also extractive companies and their home governments in 
the consuming countries.  That was really the first goal of the charter that 
brought the drafting group together.  All of us – which includes a mix of legal 
experts, tax experts, economists, political scientists – all of us are involved 
in one way or another in advising governments on extractive policy and working 
with parliamentarians and with civil society activists.  

And we found that we kept getting the same questions from the stakeholders:  
How should a country maximize its resource rents without driving away 
investors?  What happens when prices fall?  How much should we spend?  How much 
should we set aside in a savings fund?  What do other countries do?  What are 
the successful models?  

So we decided that it would be useful to try to pull together our answers in 
one concise, but fairly detailed document.  We’ve handed out hard copies.  
They’re also available on the Web site, www.naturalresourcecharter.org.  But 
the level threes, which are the detailed policy prescriptions are still being 
revised, so they are not yet available.  

And as you will see on the cover of the hard copy of the charter, it’s labeled 
a draft for consultation.  That’s because while the group that has been 
drafting the charter has both broad and deep expertise, we know we don’t know 
it all and there’s a wide consultation process underway with industry, with 
civil society activists, with economists, with the various IFIs that have 
expertise in this area.  And there will be a revision and updating of the 
charter in the fall based on all these global consultations. 

Once we have an updated document, the charter group will make a big push to try 
to convince individual countries to use the charter as a policy guide.  And we 
are very clear in making the point that to be really successful over the long 
term, countries can’t just cherry pick one or two features of the charter.  You 
really need to follow best practice in all the elements in each stage of the 
value chain in order to maximize the long-term economic benefit for the country 
as a whole.  

The second goal for the charter, as I said, is to try to develop and bring 
acceptance of global norms for extractive resource management.  Now, they say 
this may sound very lofty and a tad unrealistic, but we don’t agree.  We think 
it is both highly necessary and doable.  As Shelly Han said, there have been 
dramatic changes in attitudes toward resource governance and industry practices 
in the last decade.  And I’ll just give you three examples:

When Tony Blair launched the Extractive Industries Transparency Initiative in 
2002, very few companies were interested in the initiative.  Civil society 
said, nah, no country – serious major producing country is going to volunteer 
or comply with a voluntary initiative.  But as we have seen, there are now 32 
countries in various stages of implementing EITI – not all of them 
successfully, to say the least, but there’s significant buy-in and more 
countries are joining every day.  

Major oil and mining companies strongly support EITI and are actively engaged 
in the process now.  And that’s critically important.  EITI has active support, 
funding and endorsement from the World Bank, the Asian Development Bank, the 
Inter-American Development Bank – all of the regional IFIs and global IFIs – 
the IMF and major governments – the U.S., Germany, France – there is very 
strong buy-in. 

You can also see that companies themselves are trying to move in the direction 
of improving their own behavior and practices.  Probably the most advanced is 
the concerted effort by a group of the 17 largest mining companies in the world 
under the International Council for Mining and Metals, which is developing 
under the guidance of their CEOs, a sustainable development framework for 
mining.  

And these guidelines are binding on all of the companies that are part of the 
council.  The framework falls short, to be sure, in certain areas, but it is 
nevertheless a very ambitious undertaking and a very positive one.  One wishes 
that the oil industry would organize itself along the same lines and try to 
develop some common guidelines.  

Finally, I would say the U.S. Congress has really been a leader in the debate 
on the question of the link between resource governance and resource security – 
security for major importing countries like the United States.  And of course, 
has been moving – at least introducing – some critical legislation in this 
area, most notably, S-1700, the Energy Security through Transparency Act, which 
has bipartisan sponsorship.  And we hope to see a similar bill emerge in the 
House very shortly.  

Now, this bill only addresses one part of the value chain issue – the 
transparency of payments, but it would cover all of the major internationally 
active – virtually all of the internationally active mining and oil companies.  
So it would affect not just U.S. companies but would really help to move toward 
setting clear rules that build on what has been accepted and has been 
recognized through EITI and the various voluntary efforts.

So all of this movement is really going in the same direction.  And that’s why 
we think that it is – it will be possible with the right diplomatic outreach 
and activist engagement and congressional encouragement to reach a global norm. 
 And while there’s been a lot of progress, there’s also I think a very big 
threat that many of these gains will be reversed as competition that we see 
already intensifies to control scarce nonrenewable mineral resources.  

And not all the players are playing by the same rules.  That’s very clear.  And 
we could very easily see a race to the bottom again, as the access to supply 
overrides concerns about proper governance and the long-term damage that 
abandoning a best practice will produce.  So with the help of a prominent 
oversight board, we will be pushing very hard to have the governance of 
extractive resources taken up by the G-20, which is becoming the leading forum 
– international forum for globally important economic issues.  

It happens to include all of the major producing countries, both mining and 
oil, petroleum – the major home base of the extractive industries and the 
minerals importing countries.  So it is an ideal forum in many ways.  And we 
have been talking to member governments about taking up this issue and using 
the charter as a framework for these discussions.

Now, we’re very often asked whether the charter could become an international 
convention.  That would be, I think, pretty far down the road.  We don’t know 
if it will become a reality, but what we do know, as Joe said, is that it is a 
matter of vital and mutual interest for producing countries, for consumers, for 
investors that there be international norms for management of the nonrenewable 
minerals resources upon which every modern industrial economy depends.  The 
commission titled today’s briefing, “Natural Resources, A National 
Responsibility.”  I would add that this is also an international 
responsibility.  Thank you.

MS. HAN:  Thank you.  Now we have our most eco-friendly witness – (laughter) – 
joining us, teleconference from Vermont.  Dr. Ali, go ahead.

SALEEM ALI:  Thank you so much.  Respected commissioners, congressional staff 
and participants, we are convening this briefing in the shadow of the worst 
mining disaster to befall our country in 25 years.  The failings of 
government’s mechanisms to ensure accountability of natural resource 
enterprises is painfully evident to the communities in Appalachia.  Not only do 
they exemplify the occupational and environmental hazards of resource 
extraction, they also show how poverty can persist despite an abundance of 
resource wealth.  

However, my aim here is not to berate resource extraction but to deliberate on 
how to make resource economies work most effectively for mineral dependent 
communities.  Minerals are undoubtedly an essential ingredient in developing 
modern economies and consequently a security priority as well.  

The mandate of the Helsinki Commission provides an opportunity to consider 
efforts at reforming governance systems around natural resources at multiple 
levels.  Principle VII of the accords, which led to the establishment of this 
commission under U.S. law, support the, and I quote, “respect of human rights 
and fundamental freedom,” unquote.  This principle coupled with the mandate to 
promote humanitarian activities as stipulated in Basket III of the accords has 
collectively led to the application of a so-called “human dimension” to this 
commission’s activities. 

The commission is thus in an appropriate position to provide the impetus in 
moving its 55 signatories towards improved governance of natural resources and 
promoting this vision more broadly at the international level.  Two recent 
initiatives to promote better governance of natural resources deserve our 
attention today:  the Natural Resources Charter and the Extractive Industries 
Transparency Initiative (EITI).  

Neither initiative has followed the usual path of an international convention, 
but both have merit for greater global accountability if they can be properly 
implemented.  We have heard in more detail about the specifics of the charter 
from the distinguished panelists already and so I will focus my comments on 
some specific strengths and weaknesses of this effort.  

The charter aims to provide a broad framework for considering the role of 
natural resources by outlining 12 precepts and its substantive content is 
backed by a group of distinguished academics.  Each precept has a technical 
document which is open for public comment and review since October, 2009.  

Much of the content in these accompanying documents, which I have reviewed 
assiduously, aims to exemplify best practices in natural resources management 
and derive considerable material from already existing material from the World 
Bank, the International Council on Metals and Mining and the outcomes of the 
Mining, Minerals and Sustainable Development Initiative (MMSD), which was in 
itself a long, deliberative process dating back to around 2000 to 2002.  

It is thus meant to be a synthesis document and does not appear to have any 
pretensions of having direct enforcement impacts as already stated.  As 
described by the Revenue Watch Institute, and I quote, “The charter is a 
rallying point and an advocacy tool to promote natural resource extraction that 
is conducted ethically and to the benefit of the community,” unquote.  Since 
the charter is not aiming to have treaty status at this time, it could perhaps 
be a bit more specific in its goals of achieving these objectives since it is 
less constrained with the imperative of ratification that treaty regimes might 
be encumbered with.  

For example, the precept which grapples with environmental and social aspects 
of resource extraction could consider novel techniques for valuing ecosystem 
services that may be impaired by resource extraction in a cost-benefit 
analysis.  The charter also avoids clear guidance on how contentious legal 
notions, such as free, prior and informed consent of indigenous people might be 
obtained and enforced – something which some mining companies are now even 
willing to consider.  

To their credit, the founders of the charter have said that it is a living 
document which can be independently improved upon and act as a clearinghouse 
for guidance to governments and companies on best practices.  Its independence 
is thus far guaranteed by a funding base from nonpartisan foundations.  And its 
anchorage in the academy would guarantee that to some degree.  I would urge the 
conveners of the charter to capitalize on this independence and be more 
specific and bold in their recommendations for improving natural resource 
governance.  

Interestingly enough, the second initiative which I will talk about has its 
origins with government institutions, but is more specific and bold in its 
oversight recommendations.  Focusing on the precept of transparency, the EITI 
had its origins in the World Summit on Sustainable Development in 2002 when the 
British government launched it.  Subsequently, the effort has been embraced by 
the Norwegian government, who are now providing about a fifth of the effort’s 
funding and hosting its secretariat in Oslo.  

The EITI aims to get as many countries as possible to join the effort through a 
system of candidacy and milestones for achieving compliance with its founding 
principles of revenue transparency.  There is also a process of validation 
which goes beyond the usual concept of an audit and this embraces a far broader 
view of what we may often refer to as the social license to operate. 

 The compliance process for EITI is rigorous and is exemplified by the fact 
that as of April 2010, only two countries have been deemed EITI-compliant.  One 
of these countries is Azerbaijan, which is happily also a member of the 
Organization for Security and Cooperation in Europe and thus part of the 
Helsinki process.  The other compliant nation-state Liberia is an example of 
how a country beset by abject violence caused by mineral smuggling can recover 
within a decade of improved governance.  

The challenge for EITI is that it has to seek membership from individual 
countries with little international clout on its own.  Therefore, some of the 
largest players in the extractive sector – Australia, Canada, the United 
States, Russia and China – are not even candidate countries under the EITI thus 
far.  The Helsinki Commission can help to change this by raising the profile of 
EITI more effectively.  Now, this can of course be done for the Natural 
Resources Charter (sic) as well in terms of encouraging other countries to 
adhere to its mandate.  

The commission can also play a role in making such legislators within member 
states pay more attention to revenue flight in countries with which their host 
corporations and interests engage.  With the growing influence of globalization 
on national policies, some of the fears of resource dependency and its 
connection to corruption may be assuaged.  

For example, consider Equatorial Guinea, which has been under the same ruler 
since its independence from Spain in 1968.  The country has now signed up to be 
a candidate country within the EITI, partly because of international attention 
to its governance that was highlighted by its natural resource wealth.  

After the discovery of oil in the mid-1990s, the international community became 
more engaged with this tiny country.  The United States reopened its embassy in 
Malabo in 2003 and the State Department asserts, and I quote, “that the U.S. 
intervention has resulted in positive developments,” unquote, such as – and as 
an example, an office to monitor the human rights situation in the country.  

The viability, however, of such a mechanism as a means of initiating positive 
change in Equatorial Guinea was tested by a U.S. Senate hearing and an 
investigation by the office of the comptroller of currency on siphoning of 
funds from oil revenues to private banks in 2004.  None of this would have 
happened if the salience of Equatorial Guinea had not been brought to the 
world’s attention by oil imports which the U.S. makes from that country and the 
worthy efforts of civil society groups to bring those issues to light.  So 
trade is probably good as long as it is used with accountability.

The United Nations Security Council undertook a similar effort at vigilance 
when it convened special panels to investigate the linkage between mineral 
wealth and the ongoing dreadful conflict in the Democratic Republic of the 
Congo and in Liberia to some extent.  Yet the onus for exerting positive 
influence once corruption is exposed still lies with the international 
community, which needs to push for reform through scrutiny of natural resource 
wealth.  Without a unified stance against violations of agreements at the 
international level, ad hoc accountability arrangements such as those initiated 
by the World Bank in the case of the Chad-Cameroon pipeline can still fail 
despite their noble attentions.

In conclusion, I would state that minerals are an important and perhaps 
essential part of the development path in many countries.  However, the 
international community needs to realize that these resources must be governed 
with great care and a long-term planning horizon.  Natural resource endowments 
are an accident of geography and they can certainly be an essential tool for 
spurring economic activity. 

Even though the extraction itself may be nonrenewable timescales, it can be a 
catalyst for capital flows that can provide for lasting development.  Efforts 
at improving the vigilance of natural resource economies urgently need 
strengthening and should be considered not only as a humanitarian effort but as 
a vital security priority.  Thank you. 

 MS. HAN:  Thank you.  I’d like to note we have been joined by Congressman 
McIntyre.  Thank you for joining us.  Would you like to say something or you 
want to chime in when you’re ready or – (inaudible)?

REP. MIKE MCINTYRE (D-NC):  We’ve got so much happening today, I’ll be here for 
a few minutes, but I wanted to come by because our natural resources are such 
an important responsibility that we all have and that benefit all and should 
not be the province of just one group or one concern.  And so I’m appreciate of 
the commission holding this hearing and wanted to come by to show my support 
for having an open dialogue about this and especially thank our panelists who 
are with us today and our other guests who are represented here.  Thank you, 
ma’am. 

MS. HAN:  Thanks for joining us.  Before we get into some of the more 
philosophical questions that the charter raises and those issues and some of 
the questions I think that Dr. Ali raised in his testimony as well.  I’d like 
to get just a couple of questions on the – of how the charter is actually 
operating right now and in terms of who is controlling – you know, who actually 
is the charter right now?  

And is there a specific location or is it people spread out?  And then what 
type of support are you getting from the international lending institutions or 
other groups in terms of incorporating what the charter is doing into their 
efforts?  If you could talk a little bit more about the charter format.

MR. BELL:  This is Karin’s bailiwick.

MS. HAN:  Okay.  (Chuckles.)

MS. LISSAKERS:  Well, the charter is, to some degree, a virtual exercise.  
There is a group of like – I can’t even remember how many of us – led by 
Professor Paul Collier, who is probably the pre-eminent scholar and expert and 
policy advisor on resources, economic development and conflict; we have a Nobel 
laureate; we have an international tax expert from North Carolina, Professor 
Robert Conrad of Duke University; Joe Bell, who has helped many countries 
negotiate extractive deals; Michael Ross, who is a political economist and 
expert on conflict and extractive resources and so on.  

So there’s the core drafting group, but we have broadened the group that is 
actively engaged – or we are in the process of doing so – to do two things.  
One is to have a more diverse and prominent group of champions for the charter, 
which is an oversight board that is chaired by professor and former president 
of Mexico, Ernesto Zedillo.  Mo Ibrahim, the prominent African entrepreneur and 
philanthropist is a member of the oversight board.  

There are a couple of other people who we are not ready to name yet but who 
will be joining shortly.  And we are also creating a technical expert group to 
review each of the precepts to make sure that they are really right.  And Dr. 
Ali mentioned some weaknesses in the environmental and social precepts, for 
example, and we are very conscious, as I said, that there are issues in the 
number of the precepts, so we want to pull together more targeted expertise to 
address those.  And that group is still in the process of formation.  

We’ve had a lot of interest from the World Bank because the World Bank has 
something they’re calling – well, the nickname anyway is EITI Plus Plus, which 
is to move beyond the transparency payments to other issues around the value 
chain.  And the World Bank has been using the charter as a reference point in 
their discussions on EITI Plus Plus.  

We’ve had a very good response from the U.S. and U.K. and Australian 
governments about raising these issues in the G-20 and possibly using the 
charter as a framework.  We hope to take this forward in discussions with the 
government of Korea and with – which will be chairing the fall summit – talking 
to some people in Canada about it.  So it’s a matter of building interest.  The 
U.K. government’s development arm is actually funding some of the consultation 
and dissemination process to build on the contribution we got from the Bill and 
Melinda Gates Foundation to get the project started.  So I think there’s a lot 
of interest.  

I think there is recognition of a need to have a broader international dialogue 
around these issues.  And as I say, we think that the framework is a good 
reference point, precisely because it doesn’t have any institutional identity.  
It’s not ideologic (sic).  It’s an attempt to compile, as we say, best practice 
that’s been developed by various groups and stakeholders and experts.  

MS. HAN:  Thanks.  And I’m wondering if we could continue and comment more 
directly on a couple of things that Dr. Ali mentioned because I think he brings 
up a point – and I have to confess that I have not read all of level two of the 
charter.  I have looked at it, but I haven’t absorbed it at the same degree of 
specificity as you have.  But you know, for example, he does raise the issue of 
because right now you don’t necessarily have the political need to be so broad 
that so many countries or companies would be associated with it.  

So are you working on addressing things like clear guidance on – he named 
specifically free prior and informed consent – those types of issues, which 
perhaps now you could afford to be a bit more specific?  And is that part of 
the technical working group that you all are – if you could just address that 
question, that would be great.

MR. BELL:  Well, it’s, as we said, of course it’s a work in progress, but there 
are these various levels.  Obviously in one-sentence summaries, you’re not 
going to get in great depth.  But you know, just take an issue like free prior 
and informed consent.  It’s not a simple issue.  

There are many people who have very strong feelings about it, but it’s also 
clear that there are some very complicated issues underlying this in terms of 
the interests of the citizens – you know, the country as a whole versus the 
citizens that are in the impacted areas and how those rights ought to be sorted 
out.  And I think in certain instances, the best thing that the charter can do 
is to point out very carefully what the considerations are that need to be 
taken into account and thought through.  And moreover, particularly in issues 
such as that, it very much is circumstance-specific.  

Obviously, one needs to pay a great deal of attention to indigenous communities 
and if there is relocation or changes, there is a lot that’s already in the 
charter about how that – what types of things ought to be considered and done 
if it is undertaken.  And that’s the kind of detail, I think, that needs to be 
elaborated.  But certain of these issues don’t lend themselves to a very neat 
black/white universal answer.  

MS. HAN:  I’m going to ask another question or maybe two more and then we’ll 
open it up for the audience.  One of the things that – this is more of a – also 
more specific – but how you talk about the difference between the federal level 
and the local levels and the idea of, you know, how revenue sharing works or 
who has control of the resources.  And we see that as a big issue in places 
like Nigeria or even in Canada or the U.S. or somewhere else – (chuckles).  How 
does the charter currently address those types of issues?

MR. BELL:  Of course, Revenue Watch itself is doing a lot of work on revenue 
sharing and perhaps Karin might want to just say a little bit about that and 
then I might say a word or two. 

MS. LISSAKERS:  Yes, this is a significant issue in many countries – Peru, 
Indonesia, Nigeria of course for a long time – had decentralized both 
government decision-making and revenue distribution from extraction.  So there 
is a revenue-sharing formula.  The charter, I don’t believe – it doesn’t now 
and I don’t believe it will take a position on what the formula should be.  

What is critically important in our view is that whatever sharing be done be 
completely transparent and that the management of the resources at the 
sub-national level where governance in previously highly centralized states 
tends to be extremely weak, that the management of those revenues be 
transparent and accountable to the communities and the citizens of those 
regions.  

We are working in four countries currently with sub-national projects, working 
with a governor in the Niger Delta and with mayors in Peru and in regional 
governments in Indonesia and in Ghana to create a public monitoring process for 
the revenue streams that they get from extraction.  

I would just make a sort of general point here in response to something Dr. Ali 
said about how important it is that the international community sort of push 
countries to do the right thing.  That’s certainly true, but building political 
support and pressure in the producing countries, I think, is the most important 
determinant of whether countries will have successful economic and political 
management or not.  And dealing with the sub-national issues is part of 
building that process.  So the key is accountability, not to an IFI or some 
external organization, but government accountability to the people themselves, 
to the citizens themselves. 

MR. BELL:  I just say, I mean, like the distribution issue, it is a very 
complicated issue.  Things that on the face may sound appealing may not work.  
I mean, Peru has this canon which gives a substantial percentage of the revenue 
directly to the affected municipalities, but this has also led to a situation 
in which you have a number of resources going into areas that haven’t been able 
to absorb it and then other areas in Peru that are totally bereft of resources 
and so that you have a great inequality developing in the country in terms of 
development potential.  

These are not – and that’s reason I say it’s much better to have something that 
sets out some of the concerns and the things that have to be addressed and how 
you have to think through it rather than black or white answers.  And then 
secondly, just underscoring what Karin has said, you have to have a process 
that’s informed and one of the principal issues is to make sure that the 
information is available to the citizens so that they can participate in that 
process and have political resolutions which are consistent with that citizen’s 
desires.  Dr. Ali may still want to say something.

MS. HAN:  Yeah, Dr. Ali, would you like to chime in at this point on any of 
those issues?

MR. ALI:  Yes, I certainly appreciate the limitations.  And the approach I take 
is a very pragmatic one.  I mean, I’m not one of those sort of activist 
academics who are just out there to lobby for a particular stance.  All I’m 
saying is you need nuance within the way these issues are presented.  

And if you look at an issue like free prior and informed consent, there could 
be discussion of the jurisprudence around it which exists within national and 
international law.  There is the U.N. Permanent Forum on Indigenous People 
(sic), which has already been working quite hard on this.  I was at a meeting 
in Manila last year where specifically the issues of extractive industries were 
being discussed and there were clear guidelines which were being proposed.  

So I’m saying we should follow a process absolutely, with care and nuance, but 
that, you know, it’s tempting to also just relegate that to the national 
governments.  The reality in many developing countries is 70, 80 percent of the 
budgets are run by international donors.  So the amount of clout there is 
enormous.  And to just play the sovereignty card very easily on that account, I 
think, is tempting, but will not reach the objectives we are trying to reach.  

The other, if we do have precedents in international law in terms of dealing 
with some of these issues even at a, sort of, this nomenclature of a charter.  
For example, the energy charter, which had been – eventually became a treaty, 
is something that maybe the Natural Resources Charter should look into and see, 
you know, are there some lessons to learn as you evolve this institution 
further? 

MR. BELL:  Let me just say, Dr. Ali, I certainly agree with you that something 
like the free prior and informed consent we definitely, particularly in the 
level three discussion, need to point to a great deal of work that has been 
done on this in the international community and the conventions.  And I 
certainly didn’t mean to leave the impression that we were just going to say, 
well, this is a national – it concerns a nation to decide it by themselves.  

Indeed, the very value of this exercise is to try to provide information to 
that national process.  And so by its very nature, it’s not just saying, well, 
turn this over to the country.  Ultimately, these are political decisions that 
have to be made by the country.  Our role here, though, is to try and provide 
as much information to the citizens and to the governments to inform these 
decisions as well as we can.  And your point about having more exposition on 
these is very well taken.  

MS. LISSAKERS:  I would just say also, I mean, I took your comments on, for 
example, free prior and informed consent very seriously because it is certainly 
not the intention of the drafters to go for the lowest common denominator by 
any means.  And if that’s where we are on some of these issues – and thus we 
may well be – that’s not where we want to be.  

On the, you know, some of the economic issues, for example, we are as a group 
very critical of the very conservative stance taken by some of the IFIs in 
advising governments that most of the money should be put away in U.S. 
treasuries or invested abroad.  When you have an acute need and a low level of 
capitalization in the country and our message is very clearly, first priority 
should be to spend the money, invest the money at home, taking account of 
volatility.  So are very open to changes, proposals for changes.  And I hope we 
can continue this discussion.  Thank you.

MS. HAN:  A couple of things you all said were very – dovetailed into some 
questions that I’ve had myself on this whole process, not just the Natural 
Resource Charter, but EITI and many of these transparency efforts.  Mr. Bell, 
you raised the issue of national processes and you mentioned the lowest common 
denominator.  And you know, the reality is, a lot of these countries that we’re 
talking about in this conversation range from the barely functioning to the 
somewhat functioning – (chuckles) – to the pretty solid, but have a lot of 
issues countries.  

And one of the things that we struggle with a lot is, how do you – you know, 
we’ve got these standards, and we seem to be holding – particularly in EITI, 
we’re holding these countries and asking them to participate pretty much at 
equal levels, even though we know that countries are not at equal levels 
politically, socially, in terms of any of the sort of precursors – the things 
that they need to have in place to make these things work.

And so how do we address that?  You know, sort of the, if they don’t have the 
basics of a civil society, or even a government that has – you know, we were 
talking about Liberia earlier – if they don’t have the basics in place of 
people in their parliament who can read a law and pass it and know what they’re 
doing and government officials who know – you know, the level.  And I know that 
the international community is working with a lot of governments to up their 
capacity.  

But how do we address that?  I mean, or should it not be addressed in these 
efforts, but maybe in other efforts, and then sort of gradually take these 
countries to this place?  Or do we sort of hold it all back until – I mean, I’m 
not sure; it’s kind of a philosophical question that I’ve been struggling with. 
 Wondered if you wanted to weigh in.

MR. BELL:  Let’s talk about our capacity to – 

(Cross talk.)

MS. LISSAKERS:  I mean, the EITI has been struggling with this issue.  In fact, 
just now, today, right now, there’s a big debate in the EITI international 
board about the validation process, because countries, while EITI is a 
voluntary process, once a country signs on, the rules are pretty strict about 
what you have to do and when you have to do it.  And there’s a deadline to have 
all your processes reviewed – inspected, basically, and reviewed for compliance 
with the EITI rules.

And a number of countries have not met the deadline for filing their validation 
reports.  Now, is that a matter of lack of capacity, or is it lack of will or – 
and the rules say that there have to be circumstances beyond the government’s 
control, in order to have an extension.  Otherwise, you will be delisted as a 
number of a countries.  And my guess is, when we wake up tomorrow, we will see 
that several countries – or a number of countries will have been delisted 
because they didn’t meet the deadline.

There are obviously great cases – I mean, Liberia has certainly limited 
capacity, but it has delivered.  It’s done a very ambitious EITI process.  It’s 
fulfilled the validation, and so on.  So that’s an example to other countries.  
But the fact is, that if you work – we work a lot in Sierra Leone, for example 
– you can see very clearly that at the moment, the capacity of this government 
in Sierra Leone is much lower than that of even neighboring Liberia, even 
though they had pretty much the same starting point.

So it’s very tricky.  The key is capacity building – is to have clear rules, 
clear guidelines, and back that up with capacity building.  I mean, the Revenue 
Watch Institute spends an enormous amount of effort working with 
parliamentarians to understand the petroleum and mining law and the issues that 
will come before them for approval.  We work with civil society and with the 
press in resource-rich countries to try to help them get a better understanding 
of the issues.  

We provide technical assistance to government officials.  Joe Bell has done a 
lot of work in countries.  And as part of the charter exercise, since there are 
a lot of academics involved, as you can see, we’re actually creating formal 
courses around the charter – both the front – the upstream issues of contract 
negotiation and tax structuring and so on and the macroeconomic issues.  So 
there will be a package of courses, and there’s already enormous demand from 
governments for these kinds of trainings.  The World Bank Institute is 
designing courses around the EITI Plus Plus.  So there’s certainly growing 
recognition about the need to give a lot of expert and capacity support.

MR. BELL:  It does seem to me that the charter is useful in two ways.  First of 
all, for governments that do want to try to do a better job, but have capacity 
limitations or experience limitations, it’s a starting point.  It’s a very – 
and you know – (chuckles) – it’s the first thing that somebody can start, so 
that, to the extent that it is a useful exercise in providing information to 
the willing, that’s one part of helping with that capacity.  The other aspect, 
of course, is, it’s a tool for civil society and for building their education 
and for them to, frankly, be able to utilize as they organize political 
constituencies in support of better resource management.

I mean, one of the problems we all know about resources is, exploitation is a 
very long-term process, and we spend a lot of time in countries where they 
started out badly, locked themselves into bad deals, and now are trying to 
clean them up.  And hopefully, in processes like this, people can see, up 
front, these problems and do a better job in doing it.  So I think that there 
are ways that this will interact with these very basic development problems.  
But obviously, it’s just one of many different initiatives and activities that 
have to take place.

MS. HAN:  Dr. Ali, did you want to say anything on that issue, or –

MR. ALI:  Well, I think most of the issues have been covered.  I’m eager to 
hear what the audience also has, in terms of questions.  So I don’t want to 
take their time.

MS. HAN:  Yep, that’s where we’re going to go now.  If there’s anyone who has a 
question, there’s a microphone at the end of this dais.  If you could come up, 
state your name and your affiliation and a brief question, that would be great. 
 Yeah.

Q:  My name is Pat Korovsky (ph).  I’m an oil-cursed citizen from an oil-cursed 
country, representing – 

MS. HAN:  Just one second.  Can you hear, Dr. Ali?

Q:  My name is Pat Korovsky.  I’m an oil-cursed citizen from an oil-cursed 
country, representing an NGO called Petropolitan (sp), that fights for oil 
revenue sharing.  And I appreciate much all the efforts of EITI, the Resource 
Charter – all that.  But when I – (inaudible) – that states very clearly, the 
extractive resources are public assets.  And the – (inaudible) – exploitation 
are subject to informed public oversight, but places that completely within the 
realm of the government, I must object.  Because I don’t see anywhere here the 
alternative that it would be the citizens managing the revenues or the raw 
extractive industries.  

The USA – the oil is private.  It was used in the U.S. as private.  And it’s 
really surprising for me to visualize something here that we are trying to 
support – gather support for oil thugs to control those resources.  And there 
is some things there that we have to try to say, no to.  Thanks.

MS. HAN:  Thank you.  Mr. Bell or Karin or Dr. Ali?  I know, Mr. Bell, you had 
actually, in your testimony, mentioned something about Anglo-Saxon law 
tradition on that.  (Chuckles.)  Maybe you want to comment on that?

MR. BELL:  Let’s start at the beginning.  (Chuckles.)  You know, some countries 
do have private ownership of resources.  Some countries, like ourselves, have 
mixed ownership.  Obviously, much of the public resources – natural resources 
in the United States are on federal lands, have been treated as public 
resources.  They have been auctioned off to private developers for payments to 
the public.  

And so they have been managed in a public process, sometimes pretty well and 
sometimes, perhaps, not so well.  So even in the United States, we have a very 
mixed system.  Obviously, if the resource is committed to private ownership, 
it’s in private parties.  In most of the civil law countries – in fact, all of 
them that I’m aware of – underground resources are considered the property of 
the nation.  Usually in the constitution itself, it starts out that as a basic 
principle.

And you know, we have governments for the purpose, then, of making decisions 
about how to manage those resources.  Now, some governments are good 
governments; some governments are bad governments.  But we can’t pretend that 
they don’t exist, and there’s no way to take that asset in the ground and 
suddenly have it in every citizen’s pocket.  It has to get there, either in the 
form of cash or in the form of services, through some governmental process.  
And I don’t see how you get beyond that.  What we want to do is to get 
governments to act wisely in that respect, in terms of how they manage that so 
that the citizens see a long-term benefit.

MS. HAN:  Dr. Ali?

MR. ALI:  Yes, so I think this question goes back to what the level of national 
identity is for the country in question.  So if you have a very strong national 
identity, there will be more willingness to have a situation where the state 
has ownership of the minerals.  But in cases where – like Nigeria, where the 
national identity has been fractured since the country came into being, it’s 
going to lead to conflict.  And that’s why you have the situation where you 
will want to have some disproportionately, you know, higher level of income 
going to the place where the oil or mineral is being extracted, in order to 
quell that level of conflict.

I think you need a hybrid system.  You will definitely need to adapt 
accordingly.  Sovereign wealth funds are an important mechanism to do that, in 
terms of how that can be managed when the wealth comes through.  In the U.S., 
of course, we have the example of Alaska, with a very unique system of how the 
sovereign wealth fund has been managed, where every citizen of Alaska gets a 
check.  In other places, that may not work out.  You may need somewhat of a 
hybrid mechanism.  But I think there is – (inaudible, background noise) – for 
us to ponder over.

MS. HAN:  So Karin, do you think it makes a difference, then, in terms of, if 
you’re looking just at it purely from a transparency or anti-corruption 
standpoint, as to who controls or who has the reins over the resources?  You 
know, if we’re talking about local levels, or whatever level, do you think if a 
government decides to disaggregate this, do you think it would make a 
difference in terms of the ability to control the corruption or control the 
transparency?

MS. LISSAKERS:  Well, who controls and what their motivations are certainly 
make a difference.  I mean, we see huge variations from, you know, whether 
it’s, you know, Nigeria or Venezuela or Iran or Russia or the U.S.  There is a 
whole line of argumentation that the nature of extractive income to the state, 
by itself, undermines democracy and accountability because the government is 
independent of the people.  That is to say, whoever controls the government in 
a country where the resource is, by law, the state property, has an independent 
source of income and doesn’t need to answer to the people through taxation.

Now, some people would argue that the way to solve that is to distribute all of 
the resource rents to the individual citizens and then tax some portion back to 
recreate that accountability mechanism.  There are others who would argue that, 
well, if you did that in the case of Nigeria, you know, the resource rent, 
divided among all the citizens as individual income, would do very little for 
the citizens and would deplete the government coffers.  And not even Alaska 
distributes all of the rents.  But there’s certainly, you know, an interesting 
argument around that issue. And some sharing of the rents with individuals may 
have – will certainly make citizens pay more attention.  

I mean, one of the phenomena we have seen until the EITI mechanism in, let’s 
say, Cameroon, for example – the civil society groups we work with say that in 
the past, it never occurred to any Cameroonian that they could or should ask 
what was happening with the oil money because it was all abstract and had 
nothing to do with them, because they never saw any information; they never had 
any sense of a control.  

Once the EITI numbers came out, there was an empowerment in the sense of 
feeling they should ask, and say, well, where is the money going?  Even the 
Cameroonian parliament has asked the government, well, why don’t we have any 
money for X, Y and Z?  I mean, it hasn’t changed, yet, the economic trajectory 
or development trajectory of Cameroon, but it has started a process, a dialogue 
that was completely missing before.  So that’s why we have so much emphasis on 
– 

MR. BELL:  One other quick anecdote on that:  Even in Nigeria, once the 
ministry of finance began to make public the amounts that were actually going 
to each of the states, there was a much greater demand for public services in 
those states by the citizens of those states.  I mean, transparency doesn’t 
solve everything; that’s for sure.  But without it, it’s practically impossible 
to get the forces right.

Q:  Good afternoon, Saleem.  My name is Jeffrey Davidson (sp).  I’m from Rio 
Tinto, an international mining company with headquarters in London, U.K., and 
Melbourne, Australia.  I have a process question regarding the Natural Resource 
Charter.  I was at the World Bank in March of last year when Paul Collier 
announced publicly this initiative.  But it’s been a largely, kind of, 
invisible initiative to certain elements of the broad, international community. 
 So people who know about it presumably have participated in it, and some 
communities of interest know more about it than others.  

And other groups that presumably have a relevance and a direct interest don’t 
know a lot about it.  So for example, even I got an e-mail not so long ago – 
(chuckles) – from people in London saying, has anybody heard about this thing 
called the Natural Resource Charter?  So my question is, you know, I know that 
on the Web site, you have a mechanism for people to comment; well, who’s 
commented?  Who’s participated in the discussion?  Does it represent – is the 
discussion representative of the broad community, or have only certain elements 
participated?

MR. BELL:  Well, Karin can say a lot.  In fact, I mean, this is a concern, and 
one of the issues has been to reach out and try to bring into this discussion.  
To speak very parochially, the ICMM, which represents the major mining 
companies, including Rio Tinto, actually has been involved.  And Kathryn 
McPhail, in fact, saw early drafts of this and participated in seminars with 
the group to discuss these various issues.

Having said that, though, I think it is a very important point.  And indeed, 
Karin and others have been working, with some activity – not depending upon a 
Web site – but to go out to these various groups and get comments.  We’ve 
circulated it very specifically to civil society groups that we know are active 
and interested in these areas and asked for their comments.  We have, as I’ve 
indicated – there has been involvement with industry groups.

There have been a number of involvements with people in the regional bank and 
the other international institutions.  The World Bank and the IMF have both 
taken a look at it and written comments.  And Karin, you’re much closer to the 
process than I am, but I just – the point’s well-taken, but it hasn’t been 
ignored.

MS. LISSAKERS:  No, and I would say – we were talking about capacity 
constraints – I mean, that’s been the issue.  We now have a full-time 
coordinator to organize schedules and develop events and so on.  So it’s been a 
bit ad hoc and off-again-on-again, because of the nature of the group that’s 
pulled this together.  We will have a much more systematic approach to 
dissemination and public presentations and so on once we have the full 
oversight board in place and the full technical advisory committee.  But point 
well-taken, and we’re conscious of it, but maybe not as conscious of this 
shortcoming as we should be.  Thanks.

MS. HAN:  Isabelle?

Q:  Hi, I’m Isabelle Munilla.  I’m director of the Publish What You Pay United 
States coalition.  I had a three-part question, and it’s related to audiences.  
I think this approach is really interesting, and I think it’s really practical. 
 But I was wondering, what does success look like?  It’s a bit of a three-part 
question.  So from your perspective, for the Natural Resource Charter, what 
does success look like, in terms of governments?  Is it public policy forums to 
talk about the charter’s recommendations?  What do you think looks like success 
from a government’s perspective?

And then, from a citizen’s perspective, I like that the second section is 
called the citizen’s guide.  And I think that’s really interesting, to frame it 
that way.  And what would you see as a success from a citizen’s standpoint, in 
relation to the charter?  How would citizens use it, and then work with it?  
And then the third one, selfishly, from the coalition’s priorities, what do you 
see as the U.S. government’s role in working with the Natural Resource Charter 
in particular, the role of the transparency legislation that’s been introduced 
in the Senate and its ability to influence governments that may be reviewing 
the precepts within the charter?  Thanks.

MS. LISSAKERS:  Well, if you just take some of the transparency features of the 
charter, what success would look like – that major capital markets, from Hong 
Kong and Shanghai to Toronto and Melbourne and New York and Frankfurt and 
London have listing requirements for extractive companies, so that it just 
becomes the rule that extractive companies need to disclose their payments to 
governments.  We would like to see other elements on cost, production and sales 
and so on be part of that package.  

And an international accounting standard would be even better, and that’s 
something we are working on, or at least, would be complementary.  We would 
like to have governments – you know, we have these precepts directed at home 
governments as well.  The export credit agencies from all the major 
capital-exporting countries should have strict rules of compliance for 
companies and governments that benefit from those – that cover the transparency 
components, the human rights components, the environmental components.  

I mean, the IFC has moved in that direction.  The export credit agencies are a 
bit all over the board.  We succeeded in getting legislation for OPIC on the 
transparency piece, but there should also be a rule for ExIm.  The Australian 
export credit agency is already encouraging countries where they are providing 
guarantees and funding to implement the EITI.  

We don’t think there should be a two-track dual standard – one for developing 
countries and one for resource-rich countries.  We think the U.S. should 
implement the EITI, as Norway has done; Canada should implement the EITI; 
Australia should implement the EITI.  We think that extractive companies should 
stop insisting on confidentiality clauses in the contracts, except on a very 
narrow, genuinely commercially sensitive information basis and otherwise accept 
that, since their counterparties are, to a large extent, governments and you’re 
talking about public assets in those countries, contracts governing the 
extraction of those public resources should be made public and disclosed to the 
citizens of the country – citizens who own that resource.

Q:  Good afternoon, Jeff Goldstein from OSI Washington.  One natural resource – 
not an extractive – that’s a source of a lot of tension in certain parts of the 
world today is water.  And I was wondering, do you see any applicability of the 
terms of the Natural Resource Charter to water, or is the dynamic simply too 
different?

MR. BELL:  Yes, go ahead, Dr. Ali.

MR. ALI:  Yeah, I think that’s an excellent question, because ultimately, in 
terms of scarcity, water is going to be, in terms of human needs, probably the 
most important parity issue.  There is that – I think we need to think about 
water on two levels.  There is the dynamic for what one might call – 
(inaudible) – or artisanal wells and so on, which would fall under this 
purview.  But a lot of the other kinds of water – recharged aquifers, surface 
water – there are many other initiatives which we should think about, and using 
those to move forward on this.  

There’s a Human Convention on Freshwater Resources which has been under 
deliberation for several years.  They are still 17 countries short to get that 
moving.  So I think there are efforts on the water front, but with the artesian 
water – that’s an area where it has very similar characteristics as 
non-renewable resources, so it should encompass that.

MR. BELL:  Well, I would point out that there are other resources, such as 
forest and logging, where much of this would be applicable, that are direct 
natural resources.  Much of this actually could be applicable to certain parts 
of agriculture.  I just read the precepts after you asked the question, and 
some would be applicable in a water situation, but I think water also sets up a 
whole set of other issues that are very complicated, very important – I agree 
with the doctor (ph) – less addressed here.

MS. HAN:  Any other questions from the audience, or – okay, David?

Q:  Good afternoon.  My name is David Fu (sp) and I work for the Helsinki 
Commission.  I did some of the preparations for this briefing today.  And my 
question is that, for many countries, a truly economically optimal oil policy 
involves not just domestic reform, but also relations in corroboration with 
neighboring bodies.  The exports of Central Asian countries, for example, rely 
heavily on collaborations with Russia or China for their oil and gas pipelines. 
 Should the charter be addressing in further detail the economic impact of 
resource decisions regarding such international relations?

MS. HAN:  Yeah, and I should say, David did a great job in helping prepare for 
this hearing.  So thank you.  And part of that question, I think, that has been 
discussed before is the transport – you know, transparency of transport – of 
pipelines and et cetera, and so I think it raises a really good question.

MR. BELL:  Well, I think it is an interesting question.  I think we always 
envisioned our targets as being, in a sense, the governments and citizens of 
those countries, with significant resource wealth, and we’ve only addressed in 
two precepts very generally some of the other countries.  

There is, of course, that was already referenced here today already by someone, 
the energy charter, which is, in fact, a convention that’s intended to directly 
address some of these transshipment problems.  It’s had mixed – you know, we’re 
not an adherent to the energy charter.  And so it’s an interesting question.  
Frankly, I’d want to reflect on whether there’s something useful that we could 
say about it.

MR. ALI:  On transport, the energy charter is trying to develop a protocol 
around pipelines, specifically.  And my interest there is specifically how that 
kind of infrastructure can beleaguer (ph) cooperation overall, which would tie 
into the Helsinki Commission’s efforts.  If you’re interested, I have just 
finished a report for the Brookings Institution on the role of oil and gas 
pipelines as a source of cooperation, which will be published in a few months.  
And it grapples with these issues, especially in the Middle East.  So stay 
tuned.  (Chuckles.)

MS. HAN:  Now, the – the Revenue Watch Institute has been very actively pushing 
adding transit revenues to the EITI protocol, and in fact, the government of 
Ukraine committed, last year, as part of an IMF program, that they would do 
exactly that.  Now, we’ll see what happens with the new government, but we 
think that transit revenues – I mean, if you look at the European context, 
obviously a huge security issue.  I was just in Brussels, and that was one of 
the issues we raised with the energy commission and with the development 
commission, and others.

We think it’s both a matter of good revenue management to have this 
transparency, but also as a way of – as an anti-corruption effort, and you can 
see all the opaque pipeline and gas deals that were being cut in Central Asia 
between Central Asia and Europe.  And so we think this would be very – a very 
significant advance.

MS. HAN:  All right, I want to thank everyone for joining us today.  I promised 
to wrap up by 12:30, so I think we’re right on target.  I appreciate everyone 
joining us – our witnesses and our audience – and you can look for a transcript 
of this briefing on our Web site, probably within the next 24 hours.  We’ll 
probably also have a video of the conference as well, so if you’d like to pass 
it along to others who might be interested, thank you.

MR. BELL:  Thank you.  

(END)