Commonwealth Natural Resources Forum

Deputy Prime Minister, distinguished delegates, it is a great pleasure to welcome you all to Marlborough House, and to the very first Commonwealth Secretariat Natural Resources Forum.

We are a Commonwealth in microcosm: some 18 of our 54 member countries are here, from virtually every continent.

In conveying my appreciation to Daniel Dumas and my Commonwealth Secretariat colleagues in the Special Services Advisory Division who have organised this event, I also recognise other Commonwealth colleagues who will play their part in their own areas of expertise, and applaud other international players from both public and private sector who will bring us their own perspectives, and indeed four countries in particular – Belize, Pakistan, Tanzania, and Trinidad & Tobago – who will share their experience in detail.

This is another landmark for the Commonwealth Secretariat in its efforts – unfolding for over thirty years now – to assist member countries to develop their natural resources sector, be it in oil, gas or mining.

At the core of what we discuss today is something supremely ethical.

It concerns our stewardship of the earth and our sharing of its bounty; it concerns not so much what we inherit from our ancestors, as what we borrow from our children, and all generations.

We humans and our complex, convoluted world are infinitesimally small, in the face of nature and natural history.

Commonwealth countries – like Zambia and Papua New Guinea – produce a fifth of the world’s copper that we use to conduct heat and electricity in our houses, our cars.

But copper has been in use for thousands of years – smelted to make tools and artefacts.

The natural world is as old as time: we are the recent arrivals, who need to know where we have come from, and when we might be headed – if only we knew.

So it is only right that this Commonwealth of values – for that, above all else, is what we are – should bring both its wisdom and its wherewithal; its best policy and best practice – to so fundamental a part of national and international life.

We sometimes forget that some of the more developed Commonwealth countries, such as Canada and Australia, initially achieved their development and wealth to a large extent because of the role that natural resources played in their economies.

Indeed, if managed properly, the natural resources sector is probably the only economic sector that can, on its own, help lift a country out of underdevelopment in a relatively short period of time, if wisely used.

For unfortunately the reverse situation is also equally significant. Mismanaged, revenues from the natural resources sector can destabilise an economy, fuel conflict and war and corruption.

So, too, can they have a very negative impact on the environment, and create lasting damage to human habitat.

I have spoken of the sweep of history, and of resources that have been with us for centuries and centuries.

But so, too, must I speak of the start of the second decade of the 21^st Century, and challenging times in the field of natural resources.

Oil and gas prices continue their upward climb, as growth in demand for conventional energy sources outstrips growth in supply of these finite commodities.

In the case of the mining sector, after a huge drop in demand for metals in 2008, prices have returned to their pre-recession levels, and demand remains strong.

So the main objective of this Commonwealth Forum on Natural Resources is to provide an avenue for our member Governments to discuss key issues in the development and management of their natural resources.

The Secretariat has been providing assistance to Commonwealth member Governments in the area of Natural Resources for almost 30 years.

In visits to places like Namibia, Botswana, Tanzania, Belize, I hear of our holistic work – not just advising on managing resources, but on the legal and fiscal frameworks and rules which underpin successful resource management.

The Secretariat has gained significant experience and expertise, and has built a solid reputation of “honest broker” in the field.

We do so typically with hands-on assistance, on a country-by-country basis, offering tailor-made expertise from the Economic & Legal team within our Special Advisory Services Division.

But Natural Resource development is an area of ever-greater complexity, with more and more at stake as the scale of potential social and economic impacts increase.

It is an area tailor-made for the Commonwealth, and its networks.

Just as Commonwealth Trinidad and Tobago can advise Commonwealth Ghana on stewarding its new-found resource of oil and gas, so can Commonwealth countries in this room stand side by side in meeting their individual and collective challenges.

My preface to your discussions is the simple observation that – from a global perspective – the natural resources challenges we all face are twofold.

In essence, they are about ensuring availability of supply on the one hand; and ensuring acceptability and sustainable development on the other.

Allow me to say a few words on these two issues.

First, to look at availability of supply...

As we know, many of the world’s largest oil fields are now past their peak, and on their way to depletion.

Added to the growing economies of the world, this is putting enormous pressure on energy security, and obviously on prices.

New oil-rich Commonwealth Countries such as Ghana, Sierra Leone, Belize and Uganda are now coming into play, in a world of oil prices of $100 a barrel, rather than $25.

But the real issue nowadays is not just prices, but rather one of security of supply.

Around the world, companies have been courting countries to secure access to their resources.

Sometimes, this is done by exercising pressure.

This is why we believe that the work we are doing in putting in place adequate legal and commercial frameworks, strong institutions and good governance principles is essential.

Second, to look at what we are calling ‘acceptability’, which is now at the forefront of the natural resources debate.

Climate change is a major issue, as the world is struggling to find ways significantly to reduce carbon emissions.

The awful recent events in Japan have reintroduced questions concerning nuclear energy – one of the few major sources of energy with a relatively small carbon-footprint.

Although in the very long run, nuclear energy will arguably still be necessary (and this may be in the interest of Commonwealth countries such as Namibia, Botswana and Malawi as uranium producers), in the medium-term, Liquefied Natural Gas (LNG) will certainly regain strength.

As you may be aware, with the development of their LNG industry, Tanzania and Papua New Guinea, among others will soon join Trinidad & Tobago as significant LNG producers.

Finally, in addition to renewable energy, new sources are being looked at, such as Coal-Bed methane in Botswana.

To keep up with the increasing demand in most minerals, the pursuit of new sources of extraction has intensified, as we are seeing in the in Deep-Sea Mining now happening in the Cook Islands and Papua New Guinea.

Acceptability also means greater awareness of environmental, social and accountability issues.

The recent Gulf of Mexico oil spill – and the serious environmental damage caused by the accident – has had profound implications for offshore petroleum development.

This is why our work focuses more and more on environmental issues such as decommissioning of mining or petroleum facilities, drafting environmental legislation (such as we are currently doing in Ghana).

Last but not least, acceptability also pushes for greater transparency in the extractive industries, so that Governments can be held to account regarding the management of natural resource revenues.

There is a growing realisation on the part of governments that while the extractive process is purely converting a country’s mineral wealth into financial assets, this wealth is finite.

Provisions must therefore be made to secure some of these financial assets, so that future generations also benefit from the country’s endowment in Natural Resources.

The Commonwealth Secretariat recognises the implications attached to these developments, and has introduced transparency and revenue management principles in the assistance it has been providing to member countries.

As such, the Secretariat is currently considering further collaboration with other organisations, such as with the Extractive Industries Transparency Initiative (EITI).

Our objective is to ensure that, through the transparent and accountable management of revenues accruing from natural resources, countries can benefit from increased growth, achieve economic development and poverty reduction, and transform their societies.

In closing, I hope that you will benefit from this Forum and by discussing the most internationally acceptable and sustainable practices in the design of policy, legislation, and contracts in the oil, gas and mining sectors.

One of the great values of the Commonwealth is sharing our experience and supporting each other: hence the title of our Forum – ‘Shared Practice, Enhanced Wealth’.

I end where I began, with the Commonwealth of Values.

If our brains and our hearts are our own, ‘human’, natural resources, then let us use them.

We have seen that ‘physical’ natural resources can make us or break us: it depends on how we use our human natural resources, to treat them.

Our brains and our hearts should tell us how to treat them – and telling each other is what this conference is about.

Once again, I thank you for being here this week, and I wish you a pleasant and rewarding stay in London.

ENDS