Incidents of Soft, Direct TCL

Examples of soft, direct TCL are provided within the norm subsets covering good governance (Sect.4.2.2.2.1.1) as well as thefiscal framework applicable to com-modity activities (Sect.4.2.2.2.1.2).

4.2.2.2.1.1 Good Governance

Good governance here is understood as a classificatory category, which comprises those rules that are primarily aiming to ensure smooth functioning of governance systems, thus especially rules addressing accountability, transparency and public participation.²⁶⁶

Increasingtransparency is particularly important in a sector, which historically has often remained in great secrecy and still today is frequently being described as

‘opaque’.²⁶⁷Against the backdrop of this lack of information, which has long been available on the commodity sector, its actors, financial flows and governance mechanisms, several international organisations, instruments and initiatives have evolved over the past decade, which seek to increase transparency, i.e.‘theflow of relevant, timely and reliable economic,financial, social, institutional and political information, which is accessible to all relevant stakeholders.’²⁶⁸

Presumably the most prominent international effort in this respect with regard to oil, gas and mineral resources is the Extractive Industries Transparency Initiative (EITI). Being of the view‘that a public understanding of government revenues and expenditure over time could help public debate and inform choice of appropriate and

266Despite the established interconnection of good governance and HR based approaches, this section insofar primarily focuses on norms, which do not originate from HR law—for those, cf. Sects.4.2.1.1and4.2.2.1above. On the degree to which corresponding good governance duties, such as transparency and accountability can be seen as already being incorporated in the PSNR principle, cf. Sect.4.1above.

267NRGI (2016), p. 1.

268Mooslechner et al. (2004), p. 217, referring to Kaufmann (2002); cf. also Vishwanath and Kaufmann (1999), p. 3.

4.2 The Contribution of TCL to a‘Balanced’Commodity Sector 113

realistic options for sustainable development’, the multi-stakeholder participants of the founding 2003 Lancaster House conference ‘underline[d] the importance of transparency by governments and companies in the extractive industries and the need to enhance publicfinancial management and accountability.’²⁶⁹According to EITI principle 6, the‘achievement of greater transparency must be set in the context of respect for contracts and laws.’²⁷⁰

In Article 2(1) of its Articles of Association (AoA), EITI describes itself as an international multi-stakeholder initiative with participation of representatives from gov-ernments and their agencies; oil, gas and mining companies; asset management companies and pension funds [. . .] [;] and local civil society groups and international non-governmental organisations.²⁷¹

As of this writing, 51 countries were implementing the 2019 EITI standard.²⁷²In order to be recognised as‘implementing country’, so-called‘candidate countries’ need to demonstrate that they meet the eight EITI requirements, which i.a. include effective oversight by anational multi-stakeholder group, disclosure of the legal and institutional framework applicable to commodity activities as well ascompiling and reconciling company payments and government revenues. In this way, missing payments and corresponding corruption can be detected, as has been the case for instance with regard to Nigeria’s national oil company in 2012.²⁷³Therefore, states are obliged to comprehensively disclose their taxes and revenues, including produc-tion entitlements, profits taxes, royalties, dividends, bonuses and licensing fees, their sale of potential shares of production or other revenues collected in kind, eventual infrastructure provisions and barter arrangements, particularly resource-for-infra-structure (RFI) programmes,²⁷⁴ transportation revenues, transactions related to SOEs, and subnational payments.²⁷⁵ The data provided must be sufficiently disaggregated, timely, and of adequate quality.²⁷⁶

Despite its considerable success in attracting implementing countries over the past decade,²⁷⁷EITI has also been criticised for various shortcomings. One point of criticism relates to the EITI’s focus on transparency. While the latter may have improved in many implementing countries, this is not the case with regard to

269Principles #4 and #5, EITI (2019), p. 6.

270EITI (2019), p. 6.

271EITI (2019) EITI Articles of Association, https://eiti.org/document/eiti-articles-of-association (last accessed 14 May 2021).

272EITI (2019) Countries,https://eiti.org/countries(last accessed 14 May 2021).

273Lehmann (2015), p. 9.

274On these‘deals’extensively Landry (2018), who focuses on the DRC-Sicomines deal; on the definition, cf. also CCSI (2019) Resource for Infrastructure Deals,http://ccsi.columbia.edu/work/

projects/resource-for-infrastructure-deals/(last accessed 14 May 2021).

275EITI (2019), pp. 22–5.

276EITI (2019), pp. 256.

277Scanteam (2011), pp. 1–2.

accountability of relevant actors. As the EITI’s official evaluators concluded in 2011,

[t]here are thus few indications that EITI programmes are so far having impact on dimen-sions such as governance, corruption, poverty reduction or other objectives stated in EITI’s Articles of Association.²⁷⁸

However, as the EITI’s chairman Frederik Reinfeldt, points out, the initiative should not be misunderstood‘as the one-stop-shop for reversing the resource curse.’ Instead, he argues that EITI‘must be mainstreamed and combined with other tools to ensure that natural resources are more prudently managed and better deployed towards both economic growth and sustainable human development.’²⁷⁹

Further transparency initiatives that are explicitly directed at the commodity sector, include the Publish What You Pay (PWYP) coalition, which consists of over 800 members worldwide, some of them NGOs that were created particularly for the purpose of addressing commodity governance issues, such as Global Witness or Revenue Watch, others long standing NGOs that increasingly devote resources to commodity governance-related programmes, such as Oxfam or Transparency Inter-national.²⁸⁰The Natural Resource Governance Institute (NRGI) seeks to foster‘the governance of natural resources to promote sustainable and inclusive develop-ment’,²⁸¹by providing ‘policy advice, advocacy, and capacity development’—all based on ‘[o]riginal data, analysis, and applied research’.²⁸² The Africa Mining Vision, an intergovernmental effort, which emerged within the framework of the United Nations Economic Commission for Africa (ECA) and the African Union (AU) respectively, seeks to foster i.a. contract transparency, accession to transpar-ency initiatives, such as EITI, as well as transpartranspar-ency in the overall‘management of revenue paid to various governmental authorities’, which it recognises as ‘an important part of the mineral policy agenda.’²⁸³ Other players and initiatives e.g. include the Open Government Partnership, programmes launched within the framework of the G7 and G20, the World Bank, or the IMF.²⁸⁴

278Scanteam (2011), p. 3; cf. Lehmann (2015), p. 9.

279EITI (2018), p. 2. Reinfeldt is quoting the Nigerian Vice-President Yemi Osinbajo here.

280NRGI (2015), p. 1; PWYP closely collaborates with the EITI and coordinates the nominations of civil society representatives on the EITI Board, EITI (2017) Civil society seeks representatives for the EITI International Board, https://eiti.org/news/civil-society-seeks-representatives-for-eiti-international-board-0(last accessed 14 May 2021).

281NRGI (2015–2019), p. 1.

282NRGI (2015–2019), p. 5; the NRGI publishes i.a. the annual Resource Governance Index as well as the Natural Resource Charter—‘a set of principles for governments and societies on how to best harness the opportunities created by extractive resources for development’, NRGI (2014), cf. already Chap.2above.

283AU (2009), pp. 18, 19, 38. The Africa Mining Vision will subsequently be discussed in more detail.

284Open Government Partnership (2019) About OGP,https://www.opengovpartnership.org/about/

about-ogp(last accessed 14 May 2021); cf. moreover the G7 Alliance on Resource Efficiency, BMU (2019) Resource efficiency in the G7, https://www.bmu.de/en/topics/economy-products-4.2 The Contribution of TCL to a‘Balanced’Commodity Sector 115

Some incidents of soft, direct TCL are covering commodity activities in a particularly comprehensive manner. For instance, the FAO Voluntary Guidelines on the Responsible Governance on Tenure of Land, Fisheries and Forests in the Context of National Food Security (VGGT) provide specific guidance on how to improve the governance of tenure.²⁸⁵Their general principles require states to

[r]ecognize and respect all legitimate tenure right holders and their rights [. . .,] [s]afeguard legitimate tenure rights against threats and infringements [. . .,] [p]romote and facilitate the enjoyment of legitimate tenure rights [. . .,] [p]rovide access to justice to deal with infringe-ments of legitimate tenure rights [. . ., and] [p]revent tenure disputes, violent conflicts and corruption.²⁸⁶

The VGGT moreover set forth ten principles, which shall guide the implementa-tion of the guidelines: human dignity, non-discriminaimplementa-tion, equity and justice, gender equality, holistic and sustainable approach, consultation and participation, rule of law, transparency, accountability, and continuous improvement.²⁸⁷

Specifically addressing governance challenges that occur in the context of min-ing, the 2002 Berlin Guidelines II for Mining and Sustainable Development are

‘intended to provide general guidance for sound and sustainable management’of mining(-related) activities.²⁸⁸Based on their 1991 predecessors, the Berlin Guide-lines stipulate 15‘Fundamental Principles for the Mining Sector’.²⁸⁹

Accordingly, states and mining corporations shall i.a. recognise environmental management, including impact assessments, as a‘high priority’; equally recognise

‘the importance of socio-economic impact assessments and social planning’; ‘[e]

stablish environmental accountability [. . .] at the highest levels of management and

resources-tourism/resource-efficiency/resource-efficiency-in-the-g-7/, or the G7 CONNEX programme, CONNEX history,http://connex-unit.org/connex-history/;the G20 Anti-Corruption Action Plan, which i.a. addresses beneficial ownership transparency, availablehttps://www.mofa.

go.jp/files/000185882.pdf;the commitments by the World Bank Group in thefight against corrup-tion, i.a. its Stolen Asset Recovery (StAR) initiative, World Bank (2016) Statement,http://www.

worldbank.org/en/topic/governance/brief/update-on-world-bank-group-commitments-following-the-uk-anti-corruption-summit-may-2016 as well as the IMF’s Fiscal Transparency Code, IMF (2019) Fiscal transparency,https://www.imf.org/external/np/fad/trans/, which includes one pillar on resource revenue management. A ‘Handbook on Fiscal Transparency relating to natural resources’, is scheduled to be published in October 2019 and supposed to integrate the IMF (2007) Guide on Resource Revenue Transparency, https://www.imf.org/en/Publications/Policy-Papers/Issues/2016/12/31/Revised-Guide-on-Resource-Revenue-Transparency-PP4176 (all last accessed 14 May 2021). These initiatives illustrate the reality of continuously proliferating concepts of GCG, cf. Sect.2.2.5above.

285FAO (2012), para. 1.1.

286FAO (2012), para. 3.1. According to para. 3.2 non-state actors, particularly businesses, are held to observe their‘responsibility to respect human rights and legitimate land tenure rights’, which appears to allude to the UN GP on Business and HR that will be discussed in more detail in Sect.

4.2.2.2.2below.

287FAO (2012), para. 3B. On guidance regarding the conduct of social and cultural impact assessments, cf. Secretariat of the CBD (2004) Akwé: Kon guidelines.

288UN (2002), p. 2.

289UN (2002), p. 4.

policy-making’; ensure participation of affected communities, including full partic-ipation of women and other marginalised groups; ‘[a]dopt risk analysis and risk management in the regulation,‘design, operation and decommissioning of mining activities’; avoid environmental regulation, which may have the effect to unneces-sarily restrict trade and investment; ‘[r]ecognize the linkages between ecology, socio-cultural conditions and human health and safety, the local community and the natural environment’;‘[e]valuate and adopt [. . .] economic and administrative instruments’, which‘encourage the reduction of pollutant emissions and the intro-duction of innovative technology’; as well as‘[e]ncourage long-term mining invest-ment [through] environinvest-mental standard with stable and predictable environinvest-mental criteria and procedures’.²⁹⁰

Moreover, the Berlin II Guidelines provide suggestions for the design of domestic legal frameworks, which apply to mining activities and thus seek to support gov-ernments in their task ‘to provide a well-designed legislative framework for the mining industry that includes all aspects of the environment, both physical and social.’²⁹¹In terms of instruments for the implementation of mining-related rules, the guidelines advocate for a‘mixture of regulatory instruments’, which, apart from prescriptive systems, may also include ‘performance targets’, ‘economic instru-ments’, ‘negotiated or voluntary agreements’, or ‘environmental management systems’.²⁹²

The Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) is a voluntary initiative of over 60 states that are‘committed to leveraging mining for [SD]’.²⁹³ Its Mining Policy Framework (MPF) provides comprehensive policy guidance that, if ‘progressively implemented, will allow mining to make its maximum contribution to the sustainable development of devel-oping countries.’²⁹⁴The MPF provides guidance on how to implement a legal and policy environment conducive to sustainable mining; how to optimisefinancial as well as socio-economic benefits arising from mining; how to sustainably manage the natural resource base; how to manage post-mining transition; and how to foster the SD benefits of artisanal and small-scale mining (ASM).²⁹⁵

290All of the above as summarised at UN (2002), p. 4.

291UN (2002), p. 7. Accordingly, respective domestic legal frameworks typically consist of specific mining legislation, environmental legislation and other legislation, which may include diverse sets of rules, such as land law, conservation law, forest law, water resources law, air quality law, hazardous substances law, or radioactive substances law, UN (2002), pp. 8–10. On comparative commodity law, cf. Bastida et al. (2005).

292UN (2002), p. 11.

293IGF (2019) About,https://www.igfmining.org/about/(last accessed 14 May 2021). The IISD currently serves as the IGF secretariat, cf. ibid.

294IGF (2013), p. 6.

295IGF (2013), pp. 6–16. The IGF is supported also by UNCTAD and as such somewhat reconciles comparable commodity-specific fora, such as the International Lead and Zinc Study Group (ILZSG), the International Nickel Study Group (INSG), or the International Copper Study Group 4.2 The Contribution of TCL to a‘Balanced’Commodity Sector 117

Pursuing a regional approach, the Africa Mining Vision (AMV) provides com-prehensive guidance on how to harness Africa’s resource endowments as a‘key’to the continent’s development.²⁹⁶It identifies‘the formulation and implementation of workable [resource-based] industrialisation strategies’ as the central issue.²⁹⁷ Looking at the respective success stories from Nordic countries, the AMV recog-nises that, instead of relying on‘foreign inputs’,‘proactive and deliberate actions from key stakeholders, particularly governments’are an important prerequisite for achieving this aim.²⁹⁸With its ambition‘to transform mineral sectors in an inclusive, sustainable way’, the AMV correlates with‘other Pan-African development initia-tives, such as the AU Agenda 2063.’²⁹⁹It is based onseven tenets³⁰⁰and sixmajor intervention areas.³⁰¹

Recalling the example of the Lagos Plan of Action, which is said to have remained‘part of the rhetoric of official declarations, dissociated from real policy’, the 2011 International Study Group Report on Africa’s Mineral Regimes called for concrete instruments for the implementation of the AMV.³⁰²Against this backdrop, the AU’s 2011Draft Action Plan for Implementing the AMV grouped respective measures and activities into nine ‘clusters’: mining revenues and mineral rents management; geological and mining information systems; building human and institutional capacities; artisanal and small-scale mining; mineral sector governance;

research and development; environmental and social issues; linkages and diversifi -cation; mobilising mining and infrastructure investment.³⁰³In December 2013, the AU established the African Minerals Development Centre (AMDC), which has the mandate‘to provide strategic operational support for the [AMV] and i.a. to elaborate so-called‘Country Mining Visions’.³⁰⁴

(ICSG). On these and other so-called International Commodity Bodies (ICBs), as well as their classification according to the CFC agreement, cf. Sect.5.2.1below.

296AU (2009), p. 2; on the regional policy initiatives the AMV has been inspired by, cf. the list at Oxfam (2017), p. 8.

297The AMV explicitly recognises that‘[r]esource-based development and industrialization strat-egies are not a new mantra’, but had already been envisaged in various strategic plans, such as the Lagos Plan of Action, the SADC Mineral Sector Programme, the Mining Chapter of the New Partnership for Africa’s Development (NEPAD) as well as the Africa Mining Partnership’, AU (2009), p. 3.

298AU (2009), p. 3.

299Oxfam (2017), p. 8; within the AU Agenda 2063, formulating‘a commodities strategy’, i.e.‘[e]

nabling African countries add value, extract higher rents from their commodities, integrate into the Global Value chains, and promote vertical and horizontal diversification anchored in value addition and local content development’, constitutes one of the‘flagship programmes’, AU (2015), p. 17.

300UN ECA (2017), pp. 1–2.

301Oxfam (2017), p. 8.

302UN ECA (2011), p. 154.

303AU (2011), p. 9.

304UN ECA (2019) About AMDC, https://www.uneca.org/pages/about-amdc (last accessed 14 May 2021); AMDC (2014), p. 8.

4.2.2.2.1.2 Fiscal Framework

Within the guidance regarding the fiscal framework for commodity activities, examples of soft, direct TCL include the UN Handbook on Extractive Industries Taxation, which is providing guidance on how extractive industry activities should be taxed.³⁰⁵The handbook provides elaborate commodity-directed guidance on tax treaty issues; permanent establishment issues; transfer pricing issues; tax treatment of decommissioning; the overall government’sfiscal take; tax aspects of negotiating and renegotiating contracts; and value added tax.

Furthermore, the Base Erosion and Profit Shifting (BEPS) process under action 10 has brought about specific guidance on the analysis of transfer pricing in‘ cross-border commodity transactions between associated enterprises’(commodity trans-actions). Particularly relevant to commodity transactions is also the new guidance on applying the arm’s length principle, which was developed under action 9, as well as the new standards for transfer pricing documentation, which have been developed as part of action 13.³⁰⁶The joint IGF-OECD Program on Tax Base Erosion and Profit Shifting in the Mining Sector is providing further commodity-specific guidance i.a. on issues such as the undervaluation of mineral exports, indirect transfer of mining assets, and a practice called metals streaming.³⁰⁷

Besides, the IMF has developed a draft Natural Resources Fiscal Transparency Code (NRFTC),³⁰⁸ which builds on its general Fiscal Transparency Code.³⁰⁹ It requires states to establish a comprehensive legal framework andfiscal regime and to maintain‘open and transparent procedures for granting rights for resource extrac-tion, and clear rules governing resource revenue collection and verification.’³¹⁰

305In the case of inconsistencies between the handbook and the UNDTC, the latter explicitly prevails, UN (2017a), pp. iv–v.

306OECD (2015), pp. 51–52.

307IGF (2017), p. 2.‘Metals streaming involves mining companies selling a certain percentage of their production at afixed cost to afinancier in return for funds for partial or complete mine development and construction. Since the amount offinancing provided is linked to the discounted mineral price, companies have strong incentives to agree to lowerfixed prices to increase the up-frontfinance available. Streaming reduces the tax base of resource-producing countries, where royalties and income tax use sales revenue as part of calculations. There is virtually no guidance on these arrangements in the mining tax literature’, IGF (2017), p. 8.

308IMF (2016) Release of the IMF’s Natural Resource Fiscal Transparency Code, May 2016,http://

www.imf.org/external/np/exr/consult/2016/ftc/(last accessed 14 May 2021).

309Cf. IMF (2019), which‘integrates into the Fiscal Transparency Code (FTC) a new fourth pillar (Pillar IV) on natural resource revenue management’, p. 1. The FTC is available at IMF,https://

blog-pfm.imf.org/files/ft-code.pdf(last accessed 14 May 2021).

310IMF (2016), p. 5.

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Im Dokument Sustainable Commodity Use (Seite 129-136)