* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.
Diarmid O'Sullivan leads the oil and minerals team at Global Witness, a London-based organisation that investigates the links between natural resources, corruption and conflict.
Professor Paul Collier of Oxford University unveils the Natural Resource Charter today – a convention that aims to become a benchmark for international standards on natural resources. If followed, this set of economic and regulatory principles should ensure a fairer deal for the citizens of resource-rich countries, who have for generations suffered from the confluence of resource wealth and poor governance.
Many developing countries are plagued by the "resource curse" - the tendency of countries that depend on exports of oil, minerals or other natural resources to be poorer, more unstable and more prone to violent conflict than otherwise similar countries that lack these resources.
What the Charter does is bring together a wide-ranging set of policy prescriptions which that will enable countries to plan for better management of their natural resources while also making the actions of their governments more accountable to their own citizens.
Since the mid-1990s, Global Witness has been investigating the gross official corruption that is often central to the resource curse. Take Equatorial Guinea, a small African country whose gross domestic product per person in 2009 was $37,500 - more than Sweden - but where most people live on less than a dollar a day.
We have revealed how Teodorin Obiang, the playboy son of the country's brutal president, enjoys a $35 million mansion in Malibu, California, which would take him at least 580 years to afford on his official salary, and allegedly still has cash left over for a 200ft luxury yacht, complete with shark tank.
Corruption of this kind is starting to be recognised by the world's governments as a serious geopolitical problem as well as a moral evil. But Global Witness sees a risk that growing global demand for the oil and minerals of poor countries will lead to a "race to the bottom" as international companies from the West and Asia, backed by their governments, are tempted to compete by any means necessary to gain access to these deposits.
Global Witness has contributed ideas on fighting corruption to the text of the Charter, and we hope to feed in ideas on its future implementation. We often see a risk that corruption will take root at the point where companies negotiate resource deals with governments.
MONITORING LOCAL FIRMS
In Nigeria and Angola, for example, the last five years have seen a growing trend for small private companies to be included as minority shareholders in oil exploration licences issued to Western or Asian companies.
In theory, this trend towards "local content" is a good thing if it means more African companies become involved in Africa's extractive industries. But in practice some of these local companies are owned by people with the exact same names as senior government officials and politicians, or do not identify their shareholders at all.
In such cases, it is reasonable to suspect that "local content" policies may be simply becoming another route for ruling elites to enrich themselves. For that reason, the Charter's prescriptions on the need for transparency in the way such licences are awarded, and about the ownership of companies that win them, will be hugely important in setting a global standard in this area. Global Witness is proud to have been able to contribute our ideas to this aspect of the Charter.
Another area where the Charter could make a major impact is in setting standards of accountability for the "resources-for-infrastructure" deals that are often favoured by Chinese state companies investing in Africa. In one such deal in the Democratic Republic of Congo, Chinese investors offered billions of dollars in infrastructure investment in return for access to the country's copper and cobalt.
As Global Witness will explain in an upcoming report, these investments in roads, schools, hospitals and electricity are badly needed in the DRC, but the deal has been done in an opaque fashion, without open bidding or sustained public debate, and key terms are still a secret. It is impossible to assess whether it represents a fair deal for a war-wracked country that has suffered more than a century of plunder of its resources by outsiders.
At the moment the Charter exists only as a set of principles. To become reality, it will need to develop an easy-to-use set of metrics and guidelines that government officials and civil society groups in developing countries can use, while adapting its guidance to new types of resource deal and new modes of corruption and exploitation.
Global Witness looks forward to contributing its experiences and ideas to help the Charter become a proving ground for new international rules and standards that finally start to tackle the forces of unrestrained greed, improve transparency and ensure that developing countries can truly benefit from their natural resources.
