Trawling the Globe: The Hunt for Natural Resources

July 14, 2011

Barbara Unmüßig

This article is also available in German.

Where do the raw materials for our computers, flat-screen TVs, mobile phones, fluorescent lamps and the countless batteries found in our consumer goods come from? And what happens to them when we decide that it’s time for an upgrade? Where do they come from and where do they go? As a rule, we don’t concern ourselves with these questions. Information and communication technologies, renewable energies, car manufacturing, the high-tech defence industry – all these sectors are heavily dependent on “strategic” resources, as they are now called, with names like indium, tantalum, lithium, rare earths and coltan. These resources are not infinite, and their extraction and disposal are inextricably linked with major ecological, social and human rights problems. New efforts to introduce a governance regime, together with eco-social standards, are therefore required.

The rising resource demand from the industrialised countries and emerging economies is intensifying the competition over fossil fuels such as oil, gas and coal and key traditional resources such as timber, gold, copper, iron ore and bauxite. No wonder, then, that resource governance is no longer a peripheral issue and is moving to the top of the international policy agenda. For a long time, attention was focused solely on the availability of energy resources, but today, these new strategic resources are in the spotlight as well. Securing the supply of raw materials is the top priority in government policy discourse – in Europe, Germany and China alike. Environmental and development challenges, on the other hand, are treated as secondary concerns.

Resource governance and ecological transformation

Some modern technologies which are regarded as offering a way out of the fossil fuel crisis or are seen as the driver of jobs and growth in a green economy – such as solar and wind energy, or electric and hybrid cars – need powerful batteries and magnets. Specific materials are essential for thin-film technologies, for instance. Compact fluorescent lamps depend on these strategic resources. Small and powerful lithium ion batteries are a key component of hybrid and electric cars. Thorough market penetration of these vehicles could lead to a 27-fold rise in demand for lithium by 2050 compared with the 2008 level – but this would result in the exhaustion of the world’s entire lithium reserves by 2045. And researchers in the US are already predicting that the world supply of indium – a vital component of touch screens – could be exhausted by 2020 at the latest.

In debating the green industrial revolution, we must consider what new dependencies on strategic resources these technologies are creating and what problems arise as a result for people and the environment in the regions where such resources are extracted. Resource efficiency, recycling and substitution must therefore become top priorities. The electronic waste recycling rate is low, and this itself points to policy failure. According to the United Nations, more than 40 million tonnes of electrical and electronic equipment end up in the bin every year – along with the precious resources that they contain. One tonne of mobile phone scrap yields 60 times more gold than a tonne of gold ore. The lack of investment in research and development in the field of resource efficiency and re-use is a political and corporate scandal.

Material and resource efficiency is a very important goal, but it is not enough. New trade and investment rules and eco-social standards are also required. Banning or foregoing the extraction of resources, for example in the Arctic or the tropical forests, are other important options – but these options will no longer be available once the world’s finite resources have been consumed.

Challenges and problems of the resource boom

Resource governance requires a “joined-up” approach that links economic and foreign policy, ecological concerns, and democratic and development policy, which are crying out for a coherent strategy. Here, environment and development, democracy and human rights must be regarded as equally important goals and should not be subordinated to the industrial and emerging countries’ economic interests. Price rises in the resource sector make investment in ever more risky, expensive and damaging extraction economically lucrative – from deep sea and Arctic drilling to oil extraction from tar sands or shale in ecologically sensitive regions. Unique ecosystems in previously pristine areas – whether in the Andes or the Congo Basin – are opened up and exposed to overexploitation. Direct effects on the people in the mining regions – from health risks to infringements of human rights and expulsion – are intensified.

The extractive industries and resource trade have long been a billion-dollar business which is dominated by a small number of global corporations. Many of the developing countries that currently have real prospects of ending extreme poverty base their economic growth mainly, or in some cases solely, on the export of resources. Paradoxically, a disproportionately high number of resource-rich countries are extremely poor or corrupt. The “paradox of plenty” – also known as the “resource curse” – is a well-known phenomenon. It means that the profits and “rents” from resource wealth are used solely for the enrichment of a small elite group, while also increasing corruption, fragile statehood and violent conflicts. It affects countries from Russia to the Congo.

Who benefits – and who makes the rules?

How can the people in the resource-rich countries benefit from their natural wealth? This is a key political question. Where resource strategies have already been agreed (e.g. by the German government, the European Union and some companies), they focus solely on safeguarding resources and are politically and ecologically one-dimensional.

Resource wealth can indeed contribute to development if usage rights, distributional issues and the management of resources are regulated by functioning institutions, value chains generate affluence at local level and revenues from the resource sector are invested in forward-looking development. However, global and national approaches to regulation and control are thin on the ground. In contrast to the situation with regard to climate change or biodiversity loss, there is no international convention for the resource sector at UN level and no global regime to which reference can be made. Some regulations do exist – e.g. on the conduct of transnational corporations (OECD Guidelines) and observance of human rights (Business and Human Rights) – but they are not binding and are therefore largely ineffective.

A similar situation applies to the voluntary standards and company codes of conduct aimed at tackling corruption, increasing transparency and improving observance of human rights and compliance with environmental and social standards. Various certification systems are in preparation for individual sectors. In general, however, it must be concluded that implementation of these voluntary standards is inadequate and that there are numerous loopholes that enable companies to improve their image while carrying on business as usual. Resource governance is still in its infancy. Until now, the supply of resources to industry has been a matter for companies themselves. Responsible, environmentally sound and socially equitable resource management that is compatible with human rights requires policy coherence, however, and this entails a very different approach towards standards and government regulation – an approach that creates incentives to conserve, re-use and, where appropriate, forego the consumption of resources. Natural resources are finite. Consumers should be clear about that when they upgrade their mobile phones, on average, every 18 months.

Barbara Unmüßig

From 1996 to 2001, Barbara Unmüßig chaired the supervisory board of the Heinrich Böll Foundation, and was elected president of the foundation in May 2002. Her numerous contributions to periodicals and books have covered international trade and finance, international environmental issues, and gender policy.

All articles and speeches by Barbara Unmüßig

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