CIAO DATE: 12/03

Conflict Commodities: Addressing the Role of Natural Resources in Conflict

Abstract

The role that the availability of lucrative natural resources including gem stones, minerals and timber plays in the incidence of violent conflict in several countries, mainly in sub-Saharan Africa, is the subject of significant policy debate and academic research. Indeed, it is generally recognised that the trade in certain commodities has played a role in the continuation of several wars, providing resources to both rebels and governments to finance their military campaigns.

Tackling this trade can offer an opportunity for action on the part of the international community, on condition that it forms part of a comprehensive approach to peace-building and development. This paper examines existing and potential measures available to the European Union (EU) that could be harnessed to help transform the role of natural resources from one that fuels conflict to one that contributes to the EU's conflict prevention strategy. The policy instruments that are explored include:

• Economic sanctions and embargoes Commodity-specific embargoes could prove effective in cutting out the trade in goods linked to war financing, but the lack of effective monitoring and verification measures undermines their efficacy and they are not applied consistently by the EU.
• Trade regulations Attempts to regulate the trade in conflict commodities include the Kimberley scheme for rough diamonds and measures to address illegal logging. To be effective, these measures require the adoption of inclusive definitions for conflict commodities, and of appropriate monitoring and verification mechanisms to ensure compliance.
• Development assistance Support should be provided for institutional capacity-building, sustainable natural resource management, and small-scale and artisan mining activities, particularly in conflict-prone and post-conflict developing countries.
• Corporate Social Responsibility (CSR) The role of business in conflict zones can be a positive one if businesses adopt transparent good practice and adhere to internationally-recognised principles of CSR. Increased EU support for specific initiatives such as fair trade labelling and eco-labelling should be envisaged, and increased transparency of company payments to governments should be required.
• External relations The war economies dimension should be integrated into regional and subregional conflict prevention and crisis management instruments, and cooperation between the EU and third countries on the trade in conflict commodities should be formalised.

The development of policy measures that seek to reverse the negative role of lucrative natural resource endowment in the perpetuation of civil wars must be carefully weighed against the negative externalities they may engender. They must not be seen as a cure-all for conflict and underdevelopment. Instead, they must form part of a wider strategy that includes a range of instruments to address both closely related issues such as the illicit arms trade, as well as support for security sector reform and broader poverty-reduction strategies. It is only by identifying and appropriately addressing the root causes of violent conflict that the EU can effectively support third countries in the transition to peaceful development.

Full text (PDF format, 14 pages, 70.0 KB)