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Email this citationCIAO DATE: 04/03
Policies and Practices for Regulating Resource Flows to Armed Conflict
Jake Sherman
May 2002
Executive Summary
The aim of the Bellagio conference was twofold: first, to sharpen our understanding of the critical dimensions of local, regional, and global financial and material flows to and from conflict zones; and, second, to critically review extant and emerging legal and policy frameworks, and the potential for strengthening their enforcement or extending the applicability of other legal and regulatory tools to stem those flows, with an eye to producing a coherent set of practical recommendations for decision-makers and policy practitioners in the field of international peace and security.
The ability of combatants to prosecute armed conflict is predicated on their ability to secure access to resources. Importantly, while globalization has presented combatants and their support networks with new economic opportunities, including legitimate international financial and commodity markets, as well as illicit black and gray markets, it also renders them more vulnerable to international pressure, if such can be mobilized.
The curtailment of economic behavior by belligerents is necessary but not sufficient for conflict resolution or prevention. At best, policy responses can increase the transaction costs to belligerents. But even the most effective policies are unlikely to fully halt illicit resource flows, let alone by themselves to assure peace. Both existing and emerging efforts to inhibit resource flows to conflict zones require a more considered analysis of their efficacy in shifting the economic incentives of all combatants from war to peace relative to their potential consequences for conflict resolution or post-conflict peace-building.
There is growing consensus that current legal regulations and policy mechanisms applied by the UN, regional actors, and others to regulate or proscribe specific resource flows and conflictpromoting economic activities are ineffective and insufficient. Participants agreed that a combined strategy was required, involving first, improved identification, enforcement and harmonization of relevant extant policies and institutional mechanisms, and second, development of a new, inclusive, global normative framework.
Participants agreed that an eventual global legal framework should proscribe or regulate specific activities (rather than actors), but reaching consensus on which activities remains a ke y challenge. Two approaches were identified: first, a broad approach aimed at all economic actions, regardless of whether or not they fuel armed conflict, and second, a more narrow agenda focusing only on economic activities linked to conflict. Each involves tradeoffs between comprehensiveness and whether it will be implementable. Some favored a multi-dimensional approach combining development of a new, narrow legal regime to cover priority areas not already addressed by existing conventions with the establishment of a robust and comprehensive norm, supplemented by existing legal and policy instruments, which can be tapped in the interim to deal with crisis situations.
Current interdiction efforts and regulatory regimes face several limitations, including: 1) lack of state administrative capacity and, in some cases, political will to implement; 2) lack of regional coordination, capacity and commitment; 3) lack of international consensus, coordination and commitment, both politically and financially; and 4) lack of will or adequate incentives for private sector and other non-state actors to comply.
States continue to have the most potential for robust legal jurisdiction and are generally better suited to ensuring implementation and enforcement. Yet, effective implementation of measures to control illicit resource flows to conflict zones presents challenges for developing countries and developed countries alike. Addressing the "implementation gap" requires redressing both the technical and administrative capacities of weak and failed states and redressing the impunity that enables the emergence of kleptocratic regimes and warlords. Promoting greater transparency in political decision-making and financial transactions, as well as engaging local civil society and private sector actors in order that they may better hold government and private sector actors accountable for their behavior, are vital to this process.
Good governance and accountability cannot be achieved through supply-side regulations alone. In many developing states, effective efforts to combat corruption are limited by weak legal institutions subject to capture by corrupt interests. Meanwhile, the practices of developed countries and their multinational corporations may provide the resources for corruption. The weak regulatory capacities of developing states can be compensated by a concerted effort on the part of industrialized states to extend domestic regulation of multinational corporations' practices to their extraterritorial activities and to broaden and deepen international financial regulatory standards.
Regional organizations and ad hoc groupings of states have undertaken initiatives to stem the illicit trade in arms, narcotics, and other commodities linked to conflict with varying success. Some participants questioned the capacity, and thus operational relevance, of regional and subregional organizations. Others stressed the importance of giving them a greater role in the prevention and resolution of armed conflicts, possibly in partnership with the UN. However, reliance on regional approaches should not be the pretext for an abdication of responsibility by the Security Council or the UN in general, as was the case in the early 1990s.
Several general challenges for the UN and other relevant multilateral actors were identified. These include the need for systematic analysis of the effectiveness of prior policy interventions for conflict mitigation and adjustment according to specific contexts, thereby minimizing unintended consequences; realistic assessment by the Security Council of the administrative and technical limitations of both states and the UN to implement policy decisions; and improved informationsharing and coordination capacities among discrete and complimentary policy areas, including sanctions enforcement, customs and air traffic monitoring, and crime prevention.
Specific policy recommendations for improving the effectiveness of mechanisms currently available to the UN include: 1) the integration of targeted sanctions into an overall strategy to induce or change the behavior of transgressing actors; 2) the establishment of a permanent sanctions implementation and monitoring mechanism, which would require more detailed and routine reports on state compliance with all sanctions regimes; 3) the establishment of a permanent office to support the independent Expert Panels investigating sanctions violations; and 4) the formation of a permanent mechanism for routine information sharing and cooperation among international law enforcement agencies, which would facilitate action against known violators of sanctions and certification regimes.
Ultimately, establishment of an international regulatory framework is dependent upon identification of the legal requisites and the applicable international norms that may be adapted to this end. It would also involve the identification of the political challenges that such an enterprise would likely encounter, particularly in the context of UN policy-making, as well as the practical means of overcoming those challenges.
