Report - A9-0322/2023Report
A9-0322/2023
European Parliament

REPORT on the role of EU development policy in transforming the extractive industries for sustainable development in developing countries

30.10.2023 - (2023/2031(INI))

Committee on Development
Rapporteur: Barry Andrews

Procedure : 2023/2031(INI)
Document stages in plenary
Document selected :  
A9-0322/2023
Texts tabled :
A9-0322/2023
Debates :
Votes :
Texts adopted :


PR_INI

CONTENTS

Page

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

EXPLANATORY STATEMENT

OPINION OF THE COMMITTEE ON INTERNATIONAL TRADE

INFORMATION ON ADOPTION IN COMMITTEE RESPONSIBLE

FINAL VOTE BY ROLL CALL IN COMMITTEE RESPONSIBLE

 



 

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on the role of EU development policy in transforming the extractive industries for sustainable development in developing countries

(2023/2031(INI))

The European Parliament,

– having regard to Article 208(1) of the Treaty on the Functioning of the European Union (TFEU), which states in particular that ‘Union development cooperation policy shall have as its primary objective the reduction and, in the long term, the eradication of poverty’ and that the ‘Union shall take account of the objectives of development cooperation in the policies that it implements which are likely to affect developing countries’,

– having regard to Articles 3 and 21 of the Treaty on European Union (TEU),

– having regard to the UN resolution entitled ‘Transforming our world: the 2030 Agenda for Sustainable Development’, adopted at the UN Sustainable Development Summit in New York on 25 September 2015, and to the 17 Sustainable Development Goals (SDGs) included therein,

– having regard to the Agreement adopted at the 21st Conference of the Parties to the UN Framework Convention on Climate Change (UNFCCC) – COP21 in Paris on 12 December 2015 (the Paris Agreement),

– having regard to the UN Declaration on the Rights of Indigenous Peoples, adopted by the UN General Assembly on 13 September 2007,

– having regard to the UN Guiding Principles on Business and Human Rights,

– having regard to the Ten Principles of the United Nations Global Compact,

– having regard to the International Labour Organization (ILO) Convention No. 169 on Indigenous and Tribal Peoples,

– having regard to the eight fundamental ILO Conventions, as defined under the ILO Declaration on Fundamental Principles and Rights at Work,

– having regard to the Minamata Convention on Mercury,

– having regard to the Convention on Biological Diversity, in particular Decision COP VIII/28 – Voluntary guidelines on biodiversity-inclusive impact assessment,

– having regard to the UN Environment Programme (UNEP) Guidelines for Social Life Cycle Assessment of Products,

– having regard to the European Investment Bank (EIB) eligibility, excluded activities and excluded sectors list,

– having regard to the joint statement by the Council and the representatives of the governments of the Member States meeting within the Council, Parliament and the Commission of 30 June 2017 on the New European Consensus on Development – ‘Our world, our dignity, our future’[1],

– having regard to Regulation (EU) 2021/947[2] of the European Parliament and of the Council of 9 June 2021 establishing the Neighbourhood, Development and International Cooperation Instrument – Global Europe, amending and repealing Decision No 466/2014/EU of the European Parliament and of the Council and repealing Regulation (EU) 2017/1601 of the European Parliament and of the Council and Council Regulation (EC, Euratom) No 480/2009,

– having regard to the joint communication from the Commission and the High Representative of the Union for Foreign Affairs and Security Policy of 1 December 2021 entitled ‘The Global Gateway’ (JOIN(2021)0030),

– having regard to the Commission communication of 11 December 2019 entitled ‘The European Green Deal’ (COM(2019)0640),

– having regard to the proposal of 16 March 2023 for a regulation of the European Parliament and of the Council establishing a framework for ensuring a secure and sustainable supply of critical raw materials and amending Regulations (EU) 168/2013, (EU) 2018/858, 2018/1724 and (EU) 2019/1020 (COM(2023)0160) (Critical Raw Materials Act),

– having regard to the new Partnership Agreement between the European Union and members of the Organisation of African, Caribbean and Pacific States (OACPS) (post-Cotonou Agreement),

– having regard to its resolution of 26 February 2014 on promoting development through responsible business practices, including the role of extractive industries in developing countries[3],

– having regard to its resolution of 14 March 2023 on Policy Coherence for Development[4] (PCD),

– having regard to Rule 54 of its Rules of Procedure,

– having regard to the opinion of the Committee on International Trade,

– having regard to the report of the Committee on Development (A9-0322/2023),

A. whereas the extractive industries can be defined as encompassing different activities from extracting raw materials (fossil fuels, minerals and aggregates), processing them and converting them into products and services for use by consumers, according to the United Nations[5];

B. whereas large-scale mining (LSM) and artisanal and small-scale mining (ASM) operations have traditionally coexisted, the type of employment and local value provided varies significantly, as ASM largely operates with high degrees of informality, labour intensity and illegality, poor occupational health, safety and environmental standards, and relatively low levels of capital investment, mechanisation and recovery of minerals, providing jobs and income for unskilled workers often in remote and rural areas, while LSM are usually heavily mechanised and formally regulated, contributing to the national economy, but with little positive impact on local communities; whereas according to the UNEP, artisanal and small-scale mining in protected areas and critical ecosystems (ASM-PACE) project estimates that ASM produces approximately 10 % of the world’s gold, 15-20 % of its diamonds, 20-25 % of its tin and tantalum and 80 % of coloured gemstones[6]; whereas ASM often involves women, thereby increasing their vulnerability, owing to the lack of access to, use of and control over resource-rich land and other productive resources and finance;

C. whereas non-renewable mineral resources play a dominant role in 81 countries that collectively account for a quarter of world GDP, half of the world’s population and nearly 70 % of those living in extreme poverty, according to the World Bank[7];

D. whereas the extraction and processing of natural resources accounts for approximately half of total greenhouse gas (GHG) emissions and more than 90 % of global biodiversity and water stress impacts[8];

E. whereas the decision as to whether natural resources are exploited, which resources are involved and how this is done comes under the sovereignty of each country;

F. whereas the extractive industries should play a crucial role in the development of many resource-rich developing countries, by providing public revenues from mining and mining-related operations (from concessions, taxes and direct and indirect spending in the country of operation), employment opportunities and infrastructure, which have the potential to reduce poverty and support economic growth and social development at national and local level, if certain factors are present;

G. whereas the extractive industries can also have severe negative social, economic, environmental and institutional impacts at local, national, regional and global level, by contributing to human and labour rights violations, gender-based violence, forced labour, child labour, forced displacement, poverty, pollution, water use competition, the loss of biodiversity, deforestation, the destruction of cultural and spiritual sites, harassment of human and environmental rights defenders, the disruption of the social fabric, corruption, volatility in commodity prices, illicit financial flows, tax fraud and evasion, and armed conflicts, as well as pose many challenges owing to the ‘enclave’ nature of the extractive industry, with few links to the local economy; whereas the extractive industries often affect the rights of indigenous communities, and environmental and social impact studies can play a crucial role in protecting these rights;

H. whereas the newest and adapted technologies and digitalisation can strongly limit the – by nature – invasive impacts of the extractive industries;

I. whereas according to the International Energy Agency (IEA)[9], around half of global copper and lithium production was concentrated in areas already suffering from high water stress; whereas, in addition, a majority of current and potential excavation locations are located in rural and indigenous areas;

J. whereas the negative social and environmental impact of the extractive industries risks becoming more severe in the future, given the trend towards mining lower-grade ores, which will lead to larger amounts of waste, as well as higher energy and water demands; whereas this is particularly worrying for marginalised and vulnerable people in developing countries, where the impacts of climate change are already increasing water scarcity; points out, furthermore, that as easily accessible reserves become depleted, exploration is moving to remote and often fragile areas, as in the case with deep-sea mining;

K. whereas an analysis by the World Bank[10] states that 44 % of all operational mines are located in forests, inducing a significant impact on deforestation, as well as on indigenous people and local communities who depend on forests for their livelihoods;

L. whereas the right to information, participation and remedy are internationally protected human rights enshrined in multilateral agreements, addressing environmental decision-making in particular, which are of particular importance in the case of mining;

M. whereas the extractive industries can positively or negatively affect several UN Sustainable Development Goals (SDGs) in a direct or indirect way, in particular SDG 1 (no poverty), SDG 3 (good health and well-being), SDG 6 (clean water and sanitation), SDG 7 (affordable and clean energy), SDG 8 (decent work and economic growth), SDG 13 (climate action), SDG 15 (life on land) and SDG 16 (peace, justice and strong institutions);

N. whereas the SDGs are universal and thus require coherence from the EU in its internal and external action; whereas the European Union has been shown to negatively impact developing countries’ progress towards the SDGs through its consumption of resources, the so-called spillover effect[11];

O. whereas Community Development Agreements (CDAs) can provide a means of strengthening and advancing a sustainable and mutually beneficial relationship for governments, companies, and communities, as well as a means of preventing conflicts and increasing transparency and accountability; whereas CDAs are considered by the World Bank as best practice for extractive agreements[12]; whereas the 10 Mining Principles of the International Council on Mining and Metals (ICMM) encourage its members to carry out proper stakeholder engagement and contribute to the sustainable development of host countries and communities[13]; whereas the Initiative for Responsible Mining Assurance (IRMA) Standard for Responsible Mining has been developing best practices on what responsible mining could look like;

P. whereas resource-rich developing countries often suffer from the ‘resource curse’, as an abundance of natural resources has so far not led to their economic development owing to, inter alia, poor regulations, corruption, a lack of transparency and accountability, and an overdependence on revenues from the extractive industries and a subsequent lack of economic diversification; whereas Africa, in particular the sub-Saharan region, has become a classic case of the ‘resource-curse’, despite being home to 30 % of the world’s mineral reserves, 8 % of the world’s natural gas and 12 % of the world’s oil reserves[14];

Q. whereas developing countries have often faced challenges in collecting sufficient revenue from extractive activity owing to weak or regressive tax systems, a lack of institutional resilience, inadequate long-term planning, unsustainable debt burdens, illicit financial flows, corruption and tax evasion;

R. whereas developing countries which export raw materials are heavily dependent on tax revenues from these exports;

S. whereas accelerating the efforts to address climate change and dealing with the rapidly rising demand for the raw materials indispensable to achieving the green and digital transitions, as well as the sustainability and diversification requirements in place in the EU, raises both challenges and opportunities for the extractive industries sector to become sustainable and for resource-rich developing countries; whereas the EU can set frameworks for the extractive industries sector in developing countries in such a way as to better harness this demand in line with SDGs by increasing their fiscal space and boosting public expenditure, as well as their role in the international community, while reducing their GHG emissions; whereas developing countries need to decrease their reliance on the extractive industries and expand their economies into future-oriented sectors such as net-zero emissions technologies to broaden their revenue sources;

T. whereas Article 3(5) TEU obliges the Union to, inter alia, ‘contribute to peace, security, the sustainable development of the Earth, solidarity and mutual respect among peoples, free and fair trade, eradication of poverty and the protection of human rights’; whereas, in accordance with Article 21(1) TEU ‘the Union’s action on the international scene shall be guided by the principles which have inspired its own creation’, including democracy, the rule of law and the universality and indivisibility of human rights and fundamental freedoms;

U. whereas the EU’s political commitment to PCD was reaffirmed in the 2017 New European Consensus on Development, which identified PCD as a ‘crucial element of the [EU’s] strategy to achieve the SDGs and an important contribution to the broader objective of Policy Coherence for Sustainable Development (PCSD)’;

V. whereas EU development policy should support developing countries in transforming their extractive industries to ensure they contribute to sustainable development in line with the SDGs and the Paris Agreement;

W. whereas the activities of the extractive industries are taking place in the global context of the Paris Agreement which aims to keep the global temperature rise this century well below two degrees above pre­industrial levels and make finance flows consistent with low GHG emissions and a climate-resilient pathway, as well as in the European context of the European Climate Law[15] stipulating climate-neutrality in the EU by 2050 and a 55 % CO2 reduction by 2030 compared to 1990 levels, the ‘Fit-for-55’ regulation package comprising, among others, binding efficiency and circularity targets, and in the context of the revised and extended European Emissions Trading System;

X. whereas the EU has recently adopted or will adopt legislation to enhance corporate social responsibility and responsible business conduct that will have an impact on the extractive industries operating in developing countries, such as the Conflict Minerals Regulation[16], the Corporate Sustainability Reporting Directive[17], the forthcoming Corporate Sustainability Due Diligence Directive[18], the forthcoming Forced Labour Products Ban Regulation[19] and the Critical Raw Materials Act;

Y. whereas the Impact Assessment Report accompanying the document Proposal for a Regulation of the European Parliament and of the Council establishing a framework for ensuring a secure and sustainable supply of critical raw materials and amending Regulations (EU) 168/2013, (EU) 2018/858, 2018/1724 and (EU) 2019/1020[20] (European Critical Raw Materials Act) does not adequately assess the social, environmental, human rights and economic impacts of the proposal on developing countries (as prescribed by Better Regulation tool #35 and SDG tool #19) and on the livelihoods of local indigenous communities, including women and girls[21];

Z. whereas the EU’s commitment to a just transition extends globally and to the need for profound reforms in the financial, governance, social and environmental dimensions of the extractive sector;

AA. whereas minerals are unevenly distributed across the globe, which has a huge impact on the Global South; whereas an analysis[22] found that in 2019, 79 % of global metal ore extraction originated from five of the six most species-rich biomes;

AB. whereas the High Seas Treaty[23] adopted in June 2023 provides for a framework to protect the high seas from the impacts of the extractive industries and establishes the sharing of benefits from marine genetic resources between developed and developing countries; whereas the EU has pledged EUR 40 million as part of a Global Ocean Programme in order to help developing countries in the implementation of the treaty;

Enhancing EU development policy

1. Recalls that the EU is the largest donor of development aid in the world, mainly channelled through international organisations and Member States; stresses, therefore, the importance of mainstreaming sustainable development principles across all EU external action, in particular in policies related to the extractive industries, in line with the EU’s legal obligation to ensure policy coherence for development, as laid down in Article 208 TFEU;

2. Calls for the EU to promote a partnership between equals between the EU and the developing countries significantly dependent on the extractive industries; underlines that all EU projects in extractives in developing countries should create win-win situations, including for local communities, and should place people-centred and environment-centred development at the heart of their objectives and all operational policy frameworks; to this effect, stresses that the EU should support low-income resource-rich countries to move away from the enclave nature and the extractivist model of the mining sector, and to provide developing countries with sufficient policy space to do so, including through the use of international trade tools in order to achieve resource-based industrialisation at local level; further stresses that projects must be carried out in a fair and climate-friendly way and not at the expense of the environment, human rights and peace, using the most innovative methods available; points out that sustainable investment facilitation and the EU’s overall trade and investment strategy have to encourage investment opportunities in developing countries, in order to achieve the SDGs; asks the Commission to make sustainability a priority of raw material sector projects under the Global Gateway Initiative and to facilitate access to finance accordingly;

3. Stresses the importance of integrating sustainable extractive industries into the local economy, in order to develop local high added value industrial capacity for developing countries; believes that developing countries have the right to use export taxes and legitimate trade restrictions to develop their own industrial base and to use the resources of export duties from the extractive industries for human development and the strengthening of public services such as education and health; calls for the EU to review restrictions on export taxes in its trade agreements with developing countries;

4. Underlines that the EU and its Member States must respect, and request their partner countries to respect, the needs of local populations and indigenous peoples, in particular indigenous peoples’ right to free and informed consent prior to the approval of any extractive project affecting their lands or territories, in line with the UN Declaration on the Rights of Indigenous Peoples (UNDRIP) and ILO Convention No. 169 on Indigenous and Tribal Peoples; points out that mining increases the risk of land grabbing, in a context where the governments of developing countries often fail to recognise indigenous peoples’ and communities’ customary rights to the lands they inhabit; calls for compliance with the Food and Agricultural Organization (FAO) Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests, to avoid land grabbing resulting from the extractive industries; stresses that the promotion of the rights of indigenous peoples and their traditional practices is important to achieving sustainable development and combating climate change;

5. Urges the EU to enhance its support for resource-rich developing countries in reducing their dependency on the extractive industries and in diversifying their economies, which are sensitive to economic shocks and price volatility, by promoting sustainable alternatives;

6. Considers that the EU should support resource-rich developing countries in capturing and managing their revenues from the extractive economy in an effective and transparent manner in order to achieve inclusive and sustainable development for the benefit of their populations and the advancement of the SDGs;

7. Invites the Commission to strengthen its dialogue and cooperation with civil society organisations, trade unions, local communities and indigenous peoples in developing countries directly affected by extractive industries, in order to promote their rights and ensure their meaningful engagement and active participation in decision-making processes, particularly with regard to designing and assessing the impacts of Global Gateway flagship projects; underlines that civil society actors should have formal representation on the governance board of the Global Gateway; welcomes the announcement of the launch of the Global Gateway Civil Society and Local Authorities Dialogue Platform to ensure that a meaningful dialogue takes place when selecting and supporting Global Gateway projects;

8. Calls for the convening of a Global Gateway Monitoring Group (GGMG) to provide robust and effective oversight of all Global Gateway projects and their respect for the principle of PCD, composed of civil society actors, in particular, those representing indigenous peoples, Members of the European Parliament, representatives of the Member States and other relevant experts; stresses that the GGMG should compile an annual report on the impact of Global Gateway projects on human rights, the environment, civil liberties, peace, inequality and poverty reduction; calls on the President of the Commission to invite the chair of the GGMG to all meetings of the Governance Board; underlines that the GGMG should have access to all documents and minutes of the meetings of the Business Advisory Group, Governance Board and Civil Society and Local Authorities Dialogue Platform;

9. Calls on the Commission to strengthen the capacity of civil society actors to engage effectively in decision-making processes, including by providing training and support in areas such as legal literacy, negotiation skills, environmental impact assessments and project monitoring;

10. Calls for the EU to support capacity-building efforts in developing countries, including through technical assistance to relevant stakeholders, such as government officials, the judiciary and law enforcement agencies, to strengthen their legal and regulatory frameworks for extractive industries, including measures to increase governance and transparency, combat corruption, revenue mismanagement, tax fraud and evasion and illicit financial flows, improve labour, human rights and environmental standards, and strengthen law enforcement; recalls that some of the natural resources that feed some of the world’s most enduring and brutal conflicts pass through supply chains linked to companies operating in developed countries, namely in the EU; highlights the need, therefore, to ensure effective access to justice for victims of the social or environmental misapplication of legislation by multinational companies operating in developing countries;

11. Calls for the Commission to put forward an EU Code of Conduct on Responsible Investment in Extractive Industries in Developing Countries that would be voluntary for businesses and development finance institutions, drafted with inputs from industry and trade unions, as well as from civil society organisations and from representatives of indigenous communities and local communities; considers that the code should articulate clear commitments and tailored guiding principles for investment in developing countries in compliance with, inter alia, due diligence processes as defined by EU legislation and existing international standards, guidelines and initiatives such as the UN SDGs, the UN Guiding Principles on Business and Human Rights, the UN Global Compact, the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises, the ISO 26000 standards and the Extractive Industries Transparency Initiative; stresses that the free, prior and informed consent of indigenous peoples and local communities and local sustainable development should be the overarching objective of the code; believes that the code should cover, at a minimum, commitments on:

a) stakeholder involvement; considers that where a third country has not legislated for mandatory CDAs, European businesses should implement them as a prerequisite for doing business; considers that the agreements should be negotiated within the framework of multi-stakeholder platforms meaningfully involving indigenous people and local communities, complying effectively with the principle of free, prior and informed consent and should be made publicly accessible;

b) transparency, including proactive environmental, social and governance (ESG) reporting on projects in developing countries, in line with the principle of double materiality, as well as the publishing of contracts and financial transactions, including detailing the payments made to host governments; underlines that all public information should be provided in a clear and understandable manner to hold the relevant actors accountable;

c) the rule of law and preventing corruption, including compliance with legal frameworks, anti-corruption measures, transparency in financial transactions and whistleblower protection;

d) human rights issues, such as the use of forced and child labour, workers’ rights, displacement, discrimination, indigenous rights, women’s and girls’ rights, education, health and safety, as well as safe working conditions;

e) environmental protection, performance and impact, including pollution prevention measures, sustainable use of natural resources and measures and resources to ensure proper recycling and waste management of raw materials;

f) local content and economic diversification, including opportunities for adding local value, skills development and technology transfer to promote economic diversification and inclusive growth in partner countries;

g) conservation and biodiversity;

h) capacity-building initiatives, including training programmes and knowledge-sharing platforms to enhance the understanding of responsible investment practices in the extractive industries;

i) grievance mechanisms and safeguards to address human rights violations and environmental impacts caused by the extractive industries, including the establishment of independent monitoring bodies, complaint mechanisms and adequate remedies;

j) a monitoring and reporting framework to ensure compliance with the code, involving periodic reporting, independent third-party verification and public disclosure of performance indicators;

12. Condemns forced labour and child labour; calls for more effective action to protect and support victims of forced labour and child labour, and for a systemic solution that takes account of all factors, namely poverty, inequality, a lack of access to education, and social acceptance of child labour;

13. Urges the EU to redouble its efforts to combat child labour in the extractive activities and support programmes providing educational opportunities and alternative income-generating prospects, in order to remove children from those activities in the framework of the ‘Global Challenges’ thematic programme of Neighbourhood, Development and International Cooperation Instrument (NDICI) – Global Europe;

14. Calls for the EU to increase technology transfers, knowledge sharing and capacity building in relation to sustainable resource management in developing countries, particularly in areas related to environmental management, responsible mining practices and sustainable resource use in the extractive industries sector;

15. Invites the Commission to support incentives and capacity-building programmes, particularly those involving women, for developing countries taking steps to formalise the ASM sector and integrate it into the rural and national economy in order to improve labour conditions and the livelihoods of local communities, as well as to stop the illicit financial flows often responsible for corruption and armed conflicts; recalls that ASM is a highly gendered activity; calls for the EU to support the formation of women’s mining cooperatives and associations in order to improve women’s participation, bargaining power, working conditions and economic independence; highlights the threat to food security and the environmental and health risks associated with unregulated ASM activities in rural areas and the fact that according to the UNEP, many ASM activities occur on global commons of forested lands in critical ecosystems that were not previously used;

16. Notes with concern that for a majority of resource-rich developing countries, mining, oil or gas exploitation has not translated into broad-based economic, human and social development; underlines that addressing the ‘resource curse’ or ‘paradox of plenty’ involves not only economic diversification, but also strengthening institutional resilience, upholding the rule of law and increasing third countries’ fiscal space to facilitate sustainable development; stresses that the EU should proactively encourage domestic resource mobilisation in partner countries, such as direct taxation, and make it possible to apply export taxes on commodities, insofar as this is WTO-compatible and not applied in a discriminatory manner; calls on the Commission and the Member States to commit to scaling up concessional finance in parallel to the Critical Raw Materials Act; reiterates that the ceilings in Heading 6 of the multiannual financial framework (MFF) must be increased accordingly in the context of the upcoming MFF review;

17. Recalls that the impacts of mining can extend for years beyond the closure of the mine itself, given that mine wastes are toxic, and therefore disruptive to the environment, biodiversity services and associated livelihoods; accordingly, calls for effective mineral resource governance throughout the life cycle of mining operations, which requires, among others:

- recognition of the rights of free, prior and informed consent of indigenous people and local communities; their access to information for effective public participation in decision-making, and the assurance that persons exercising their rights are not penalised, persecuted or harassed;

- full transparency of the mining sector in relation to revenues and contracts, in line with Extractive Industries Transparency Initiative (EITI) requirements, including on environmental transparency;

- addressing the social impacts of mining and mitigating them through an approach driven by an ‘avoid, mitigate, restore’ principle;

EU actions at multilateral level

18. Calls on the Commission to propose a G20 initiative on making extractives work for local sustainable development in resource-rich developing countries; stresses that the initiative should be tailored to each context and could comprise, inter alia, financial support, debt assistance, debt relief and cancellation, capacity building in governance, taxation and anti-corruption; calls on the Commission to act as a mediator in debt relief talks to give developing countries the financial space to transform non-sustainable extractive industries and to attract sustainable extractive industries, as well as to adhere to sound environmental and social standards; calls on the Commission to support the reform and expansion of the Debt Service Suspension Initiative to include vulnerable middle-income countries, many of which are dependent on extractives, and to operationalise a long-term Debt Swap Mechanism (DSM) to facilitate debt-for-climate and nature swaps; stresses the need to end tax havens as conduits for illicit financial flows in the extractive sector;

19. Calls for the EU to promote inclusive and transparent multi-stakeholder partnerships at regional and international level, by facilitating dialogue and collaboration between governments, civil society organisations, the private sector and international institutions in order to promote sustainable development in the extractive industries, fostering inclusive decision-making processes; emphasises that the current context of growing global demand for critical raw materials and increasing geopolitical instability means there is a need to step up efforts to ensure a stable, adequate and diversified supply of critical raw materials; stresses, however, the need to move away from a culture of extractivism to a resource governance system that takes into account, inter alia, the rate of depletion, the availability of substitutes, efficiency, recycling and the sustainability of consumption; welcomes the partnership between the EU and the UN Interagency Framework Team for Preventive Action, which aims to support national and local stakeholders to improve land and natural resource management for conflict prevention and better coordination;

20. Notes with deep concern that if not managed and mitigated properly, increased demand for critical raw materials will lead to negative environmental and social impacts, particularly for sectors that show a strong dependence on ecosystem services (such as agriculture, nature-based tourism and fisheries); stresses the need to prioritise sustainability, efficiency and circularity at multilateral level and to reduce demand for virgin materials, in particular to address the challenges of climate change, water stress and pollution and loss of biodiversity;

21. Reaffirms the urgent need for a UN binding treaty on business and human rights to regulate the activities of transnational corporations and other business enterprises, which lays down clear human rights obligations, due diligence requirements and provisions for access to remedy, in line with the UN ‘Protect, Respect and Remedy’ Framework; asks, therefore, the Commission and the Member States to play an active role in the current negotiations on the instrument which should encourage corporate actors and investors in the extractive sector to assume their responsibilities with regard to human and labour rights, and respect for the environment;

22. Reiterates its call for the EU to seek further international agreements on providing climate financing, clean technology transfer and capacity building for developing countries in order to reduce GHG emissions originating, in particular, from the extractive sector;

23. Calls on developing countries to upgrade their regional cooperation, developing or adopting common environmental, social and labour standards and norms for the extractive industries sector;

24. Asks the EU to support, in particular, the Member States of the African Union in further implementing the Africa Mining Vision, a policy framework adopted in 2009 to ensure that the continent utilises its mineral resources strategically for broad-based socio-economic development, aiming to update the framework in order to embrace the SDGs and the climate change agenda, as an opportunity for sustainable development on the continent; underlines that EU support should comprise capacity building, financial support, clean technology transfers and sustainable supply chain management;

25. Calls for the EU to support regional, international and global initiatives to improve transparency and accountability in the use and management of extractive resources, including the EITI, which promotes transparency and accountability in countries rich in oil, gas, and mineral resources, the Extractives Global Programmatic Support, a World Bank multi-donor trust fund for the inclusive and sustainable implementation of EITI in resource-dependent developing countries to support poverty reduction and boost inclusive, sustainable growth and development, the Kimberley Process, which prevents the flow of conflict diamonds, and the Voluntary Principles on Security and Human Rights;

26. Calls for the EU to support developing countries in building their capacity to negotiate fair and transparent contracts with extractive industry companies; welcomes, in this regard, the EU financial support given to the G7 Connex Initiative, which enhances developing countries’ negotiating expertise on the extractive sector, so that investment contracts are conceived so as to promote sustainability and development;

27. Asks the Commission to increase its support to the European Partnership for Responsible Minerals, a multi-stakeholder partnership created to enhance the impact of the EU Conflict Minerals Regulation, by financing more development projects aimed at improving local mining practices, particularly in ASM, bringing better social, environmental and economic conditions for mine workers and local mining communities;

28. Asks the Commission to consider closer cooperation with the World Bank given its knowledge of the extractive sector and its support of developing countries for the sustainable and green transition processes;

29. Calls for the EU to provide developing countries with financial support and technical assistance to help them in implementing the Kunming-Montreal Global Biodiversity Framework and the UN High Seas Treaty;

Strengthening the EU policy and legal framework

30. Welcomes the fact that the EU has taken steps to develop binding regulations in the area of corporate due diligence, such as the Conflict Minerals Regulation, the Corporate Sustainability Reporting Directive, the draft directive on Corporate Sustainability Due Diligence and the draft regulations on prohibiting products made with forced labour and on Critical Raw Materials, which should, all together, directly or indirectly, play a part in the transformation of the extractive sector in developing countries;

31. Asks the Commission to use the 2023 review process of the Conflict Minerals Regulation, which since 2021 has obliged EU companies to source their imports of tin, tantalum, tungsten and gold responsibly and to ensure that their supply chains do not contribute to funding armed conflict, as an opportunity to assess thoroughly the impact of the regulation on the ground and the possibility to include further mandatory measures and cover other minerals; underlines the need to meaningfully include civil society organisations and the affected communities throughout the review process;

32. Invites the Commission to examine the inclusion of the extractive industry in the EU Taxonomy Regulation[24], together with extractive industry representatives;

33. Welcomes the upcoming signature of the new Partnership Agreement between the EU and the members of the OACPS, as it provides a strengthened and modernised framework for cooperation with ACP countries, which contains specific references to the extractive industries, such as the promotion of transparency, accountability and responsible management of extractive industries and the strengthening of corporate social responsibility and responsible business conduct in order to achieve inclusive and sustainable growth and development; recalls, in this context, that sustainability entails compliance with due diligence processes, as defined by EU legislation and the OECD Guidelines for Multinational Enterprises, as well as with the FAO Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests, where land tenure rights are concerned;

34. Calls on the Commission to better assess the impact of EU development assistance on sustainable development in the extractive industries sector in order to ensure effective and accountable use of EU financial resources;

35. Calls on the Commission to mainstream sustainable development and development cooperation considerations into all EU trade and investment agreements with developing countries, by including provisions that ensure respect for human rights, environmental protection and the equitable distribution of revenues from the extractive industries;

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36. Instructs its President to forward this resolution to the Council and the Commission.


 

EXPLANATORY STATEMENT

Extractive industries - the exploitation of non-renewable resources - underpin our societies, encompassing everything from oil and gas extraction, to mining for critical raw materials. In 2023, the global race for critical raw materials is fully underway. In the European Union, these materials will be important for our strategic autonomy and accelerating the green transition. However, extractive industries are truly a double-edged sword – they are responsible for the lion's share of greenhouse gas emissions and have been associated with forced labour, child labour, the destruction of ecosystems and infringement of indigenous rights around the world.

The vast majority of critical raw materials are found in developing countries – as such, the EU cannot achieve its own strategic and climate ambitions without the developing world. As the European Parliament, we have a responsibility to ensure that the EU does not endanger human rights, biodiversity or the overall sustainable development of these countries in its attempts to get ahead in the critical raw material race. If this is mismanaged, there is an additional risk of creating a second generation of countries suffering from the 'resource curse', leading to corruption and deeper inequalities in our partner countries.

The purpose of this report is to ensure that the EU and European businesses fully respect the principles of Policy Coherence for Development, as enshrined in Article 208 of the TFEU, and Policy Coherence for Sustainable Development when carrying out extractive activities in the developing world, and that any new extractive projects are carried out with the consent of affected communities, in line with ILO Convention 169 on Indigenous and Tribal Peoples. It is critical that EU investments are carried out in full transparency, especially when it comes to Global Gateway projects, with sufficient oversight from the European Parliament. Moreover, European businesses must be guided and incentivised to prioritise the rights and sustainable development of local communities. Finally, the EU must be a leader and standard setter at the international level, both to ensure a level playing field and to maintain the EU's credibility as a values-driven actor.


OPINION OF THE COMMITTEE ON INTERNATIONAL TRADE (19.7.2023)

for the Committee on Development

on the role of EU development policy in transforming extractive industries for sustainable development in developing countries

(2023/2031(INI))

Rapporteur for opinion: Emmanuel Maurel

 

SUGGESTIONS

The Committee on International Trade calls on the Committee on Development, as the committee responsible, to incorporate the following suggestions into its motion for a resolution:

A. whereas extractive industries are a cornerstone of economic added value, and are capital and labour intensive; whereas for many developing countries natural resource extraction accounts for a significant proportion of GDP; whereas extractive industries could have the potential to contribute to economic prosperity in developing countries, but are often linked to environmental pollution, destruction of nature and the violation of International Labour Organisation (ILO) standards; whereas extractive industries have a significant impact on the environment and local and indigenous populations; whereas this underlines the need for coherent strategies, embedded in a strong due diligence approach, to harness their development potential.

B. whereas developing countries largely function as exporters of unprocessed raw materials and the value creation is concentrated in economically developed countries;

C. whereas mining resources, in particular, critical raw materials, are key inputs in net-zero technologies, and will be indispensable to decarbonisation and reaching the objectives of the European Green Deal and Paris Climate Agreement; whereas, in order to maintain its competitiveness while accomplishing the green and fair transition, the EU must guarantee access to these materials for its undertakings while ensuring stringent environmental, governance, social and human rights standards; whereas there is momentum for mobilising the investment needed for this green transition in mineral-rich developing countries, such as new transport and digital infrastructures, in order to develop and diversify regional value chains;

D. whereas achieving the Sustainable Development Goals (SDGs) by 2030 will require multi-stakeholder engagement between governments, development partners, industry, non-governmental organisations and local communities;

E. whereas developing countries that export raw materials are heavily dependent on tax revenues from the export of said materials;

F. whereas commodity price volatility during the COVID-19 pandemic caused severe economic damage to developing countries dependent on the tax revenues from extractive industries;

G. whereas a diversified economy makes developing countries more resilient to external shocks;

H. whereas the green transition has the potential to generate quality and green jobs that can significantly contribute to poverty eradication and social inclusion both in advanced and developing countries;

I. whereas the pre-COVID-19 USD 2.5 trillion annual SDG financing gap corresponded to about USD 500 billion for low-income countries and USD 2 trillion for other developing countries;

J. whereas the investment gap in developing countries amounts to USD 4.2 trillion per year in order to make the SDGs reachable;

1. Calls for the creation of a sustainable and circular mining model, which exercises due diligence with regard to the EU’s legislation, including Directive 20XX/XX/EU on corporate sustainability due diligence and the Organisation for Economic Co-operation and Development (OECD) Due Diligence Guidance for Responsible Business Conduct; requests that fair trading practices and working conditions, including for artisanal and small-scale miners, are ensured in accordance with the highest international labour rights standards on matters such as health, safety and remuneration, including those laid out in Regulation 20XX/XX/EU on prohibiting products made with forced labour; calls on the Commission and Member States to establish mutually beneficial climate and critical raw materials partnerships with developing countries that place people-centred and environment-centred development at the heart of their objectives and all operational policy frameworks; calls for better coordination with national export credit agencies in order to align their activities with the priorities of the European Green Deal;

2. Calls on the Commission, the Member States and partner countries to ensure that climate partnerships and sustainable investment facilitation agreements align with the national determined contributions of the partner countries;

3. Calls on the Commission to ensure that while facilitating investments, there is no race to the bottom in subsidies in partner countries, leading to a lowering of ILO and environmental standards;

4. Considers that this model should allow balanced and transparent sharing of the sector’s added value among all stakeholders, as enshrined in the global Extractive Industries Transparency Initiative, while ensuring predictability and continuity of access for European extractive companies to mineral reserves in partner countries; stresses the need for meaningful engagement with stakeholders including information exchanges involving the private sector, civil society and trade unions, especially in the critical raw materials sector;

5. Reiterates that regional value chains and the strengthening of intra-regional trade has a positive effect on surrounding countries and strengthens their resilience, especially during external shocks;

6. Considers that this model must uphold the needs of local populations and indigenous peoples, ensure compliance with all ILO conventions, including Convention 169, minimise its direct and indirect impact on the environment when it comes to exploitation and provide partner countries with wide-ranging information, including on the subjects of technological transfer, and extensive detail on the requirements that the Green Deal projects and upcoming EU legislation entail; urges the Commission to extend its efforts to support capacity building in the legal, governmental and fiscal capacities of partner countries; reiterates that flexible transitional arrangements are needed for developing countries to comply with international obligations; stresses that the United Nations Declaration on the Rights of Indigenous Peoples’ principle on free, prior, and informed consent needs to be respected in all cases; considers that community development agreements can help achieve this objective; points out that sustainable investment facilitation and the EU’s overall trade and investment strategy have to encourage investment opportunities in developing countries, in order to achieve the SDGs by helping to mobilise higher levels of investment in hard and soft infrastructures with the lowest possible environmental impact and promote inclusive and sustainable development, poverty reduction and the creation of local employment, notably for small and medium-sized enterprises and the supply chain associated with extractive industries; stresses that a transition also requires public investments in hard and soft infrastructures;

7. Considers that this model must take account of the needs of local populations, ensure compliance with all ILO conventions and reduce its direct and indirect impact on the environment in the area of exploitation, using the most innovative methods available;

8. Calls on the Commission and the Member States to ensure that when selecting and supporting Global Gateway projects, social dialogue is an integral part of the institutional framework for policy-making and implementation at all levels;

9. Calls for this model to be applied in the value chain to any supplier undertaking in the EU, including those from third countries;

10. Considers that the principle of a minimum corporate tax on undertakings established in G20 and OECD countries should also apply to undertakings in the sector when those undertakings operate in every country signatory to the G20-OECD agreement; calls for regulation mechanisms to reduce speculation and price fluctuations in extractive industry products, in order to ensure predictability and sustainability throughout the production and supply chain;

11. Considers that a sustainable and circular mining model should uphold the policy space for developing countries to take measures that may increase domestic resource mobilisation, such as export duties and legitimate export restrictions, when not applied in a discriminatory manner and allowed by World Trade Organization rules;

12. Calls on the EU to encourage trading partners to also promote sustainable resource management in their trade and investment relations, through cooperation in international forums and the sharing of best practices.


INFORMATION ON ADOPTION IN COMMITTEE ASKED FOR OPINION

Date adopted

19.7.2023

 

 

 

Result of final vote

+:

–:

0:

33

2

2

Members present for the final vote

Barry Andrews, Anna-Michelle Asimakopoulou, Tiziana Beghin, Saskia Bricmont, Jordi Cañas, Daniel Caspary, Arnaud Danjean, Roman Haider, Christophe Hansen, Heidi Hautala, Danuta Maria Hübner, Danilo Oscar Lancini, Bernd Lange, Thierry Mariani, Margarida Marques, Gabriel Mato, Emmanuel Maurel, Carles Puigdemont i Casamajó, Samira Rafaela, Catharina Rinzema, Inma Rodríguez-Piñero, Katarína Roth Neveďalová, Helmut Scholz, Joachim Schuster, Sven Simon, Kathleen Van Brempt, Marie-Pierre Vedrenne, Jörgen Warborn, Iuliu Winkler

Substitutes present for the final vote

Marek Belka, José Manuel García-Margallo y Marfil, Enikő Győri, Javier Moreno Sánchez

Substitutes under Rule 209(7) present for the final vote

Clara Aguilera, Francisco Guerreiro, Mikuláš Peksa, Lucia Vuolo

 

 

 


FINAL VOTE BY ROLL CALL IN COMMITTEE ASKED FOR OPINION

33

+

NI

Tiziana Beghin, Carles Puigdemont i Casamajó

PPE

Anna-Michelle Asimakopoulou, Daniel Caspary, Arnaud Danjean, José Manuel García-Margallo y Marfil, Christophe Hansen, Danuta Maria Hübner, Gabriel Mato, Sven Simon, Lucia Vuolo, Jörgen Warborn, Iuliu Winkler

Renew

Barry Andrews, Jordi Cañas, Samira Rafaela, Catharina Rinzema, Marie-Pierre Vedrenne

S&D

Clara Aguilera, Marek Belka, Bernd Lange, Margarida Marques, Javier Moreno Sánchez, Inma Rodríguez-Piñero, Katarína Roth Neveďalová, Joachim Schuster, Kathleen Van Brempt

The Left

Emmanuel Maurel, Helmut Scholz

Verts/ALE

Saskia Bricmont, Francisco Guerreiro, Heidi Hautala, Mikuláš Peksa

 

2

-

ID

Danilo Oscar Lancini, Thierry Mariani

 

2

0

ID

Roman Haider

NI

Enikő Győri

 

Key to symbols:

+ : in favour

- : against

0 : abstention

 

 


 

INFORMATION ON ADOPTION IN COMMITTEE RESPONSIBLE

Date adopted

24.10.2023

 

 

 

Result of final vote

+:

–:

0:

13

2

7

Members present for the final vote

Barry Andrews, Dominique Bilde, Catherine Chabaud, Christophe Clergeau, Antoni Comín i Oliveres, Mónica Silvana González, Pierrette Herzberger-Fofana, György Hölvényi, Rasa Juknevičienė, Beata Kempa, Karsten Lucke, Eleni Stavrou, Tomas Tobé, Miguel Urbán Crespo

Substitutes present for the final vote

Ilan De Basso, Marlene Mortler, Carlos Zorrinho

Substitutes under Rule 209(7) present for the final vote

Michael Bloss, Karolin Braunsberger-Reinhold, Billy Kelleher, Norbert Lins, Lydie Massard

 


FINAL VOTE BY ROLL CALL IN COMMITTEE RESPONSIBLE

13

+

NI

Renew

S&D

The Left

Verts/ALE

Antoni Comín i Oliveres

Barry Andrews, Catherine Chabaud, Billy Kelleher

Christophe Clergeau, Ilan De Basso, Mónica Silvana González, Karsten Lucke, Carlos Zorrinho

Miguel Urbán Crespo

Michael Bloss, Pierrette Herzberger‑Fofana, Lydie Massard

 

2

-

ID

PPE

Dominique Bilde

Tomas Tobé

 

7

0

ECR

PPE

Beata Kempa

Karolin Braunsberger‑Reinhold, György Hölvényi, Rasa Juknevičienė, Norbert Lins, Marlene Mortler, Eleni Stavrou

 

Key to symbols:

+ : in favour

- : against

0 : abstention

 

 

Last updated: 29 November 2023
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