Does Ownership Matter? Gary Morris Flomenhoft Master of Public P

An Inquiry into the Economic Commonwealth of Mineral Resources:

Does Ownership Matter?

Gary Morris Flomenhoft

Master of Public Policy

Graduate Certificate in Ecological Economics

Bachelor of Science in Mechanical Engineering

0000-0002-5162-2809

A thesis submitted for the degree of Doctor of Philosophy at

The University of Queensland in 2020

Sustainable Minerals Institute

Abstract

The purpose of this thesis is to inquire into the nature of minerals as a common property resource, to inform the debate about the resource curse. The study considers if communal, or decentralised ownership results in better development and societal outcomes than other forms of ownership. There are four parts, including a historiography of mineral laws going back to Roman Law and up to the present day to find precedent for communal title to minerals in historical law, common law, civil law, or international customary law. The second part involved an analysis of domestic mineral laws in 199 countries to determine the ownership regime for minerals in every country. This resulted in classifying seven different categories of ownership: No minerals, President or Ruler, State or Crown, Communal (People/Common/Collective), “Customary” Landowners, Decentralized/Mixed, and Claimant/Ownerless/Landowner. This analysis found that communal ownership of minerals essentially does not exist at the national level, except in legal rhetoric. The study then focused on the impact of mineral ownership in general on the Human Development Index (HDI). The third part involved a statistical analysis to determine the impact of mineral ownership on the UN Human Development Index (HDI), a broader measure of welfare than GDP. This was conducted in two stages. In stage one, the six categories of mineral ownership were divided into two types: centralized and decentralized ownership. A simple comparison of the means determined that decentralized ownership had better outcomes as measured by the HDI without controlling for other factors. The second stage of analysis consisted of a multiple regression analysis in order to determine the effect of mineral ownership while controlling for other factors that could be identified. The fourth part of the thesis consisted of a case study of communal ownership of mineral-rich lands by the Royal Bafokeng Nation of South Africa. The benefits of mineral ownership to the Bafokeng administration was analysed. A survey was also conducted of 493 area residents to determine their level of satisfaction with services provided by funds from mineral ownership. The main finding is that communal ownership per se could not be identified as the primary beneficial factor in human development outcomes. However, the evidence is that decentralized ownership using the principle of subsidiarity did support better outcomes as measured by the HDI, and could contribute to mitigation of the resource curse. The case study also supported this finding as communal mineral ownership at the local level resulted in much better facilities, benefits, education, and health outcomes than for South Africa as a whole.

Declaration by author

This thesis is composed of my original work, and contains no material previously published or written by another person except where due reference has been made in the text. I have clearly stated the contribution by others to jointly-authored works that I have included in my thesis.

I have clearly stated the contribution of others to my thesis as a whole, including statistical assistance, survey design, data analysis, significant technical procedures, professional editorial advice, financial support and any other original research work used or reported in my thesis. The content of my thesis is the result of work I have carried out since the commencement of my higher degree by research candidature and does not include a substantial part of work that has been submitted to qualify for the award of any other degree or diploma in any university or other tertiary institution. I have clearly stated which parts of my thesis, if any, have been submitted to qualify for another award.

I acknowledge that an electronic copy of my thesis must be lodged with the University Library and, subject to the policy and procedures of The University of Queensland, the thesis be made available for research and study in accordance with the Copyright Act 1968 unless a period of embargo has been approved by the Dean of the Graduate School.

I acknowledge that copyright of all material contained in my thesis resides with the copyright holder(s) of that material. Where appropriate I have obtained copyright permission from the copyright holder to reproduce material in this thesis and have sought permission from co-authors for any jointly authored works included in the thesis.

Publications included in this thesis

Chapter 4: Flomenhoft, G. (2018). Historical and Empirical Basis for Communal Title in Minerals at the National Level: Does Ownership Matter for Human Development? Sustainability, 10(6), 1958; https://doi.org/10.3390/su10061958 Contributor Statement of Contribution Gary Flomenhoft (Candidate) Conception and design (100%) Analysis and interpretation (100%) Drafting and production (100%)

Chapter 6: Flomenhoft, G. (2019). The Role of Communal Land and Attitudes of the Bafokeng in Benefits from Mining. South African Journal of International Affairs, Johannesburg, South Africa, Volume 26, 2019; https://doi.org/10.1080/10220461.2019.1607773 Contributor Statement of Contribution Gary Flomenhoft (Candidate) Conception and design (100%) Analysis and interpretation (95%) Drafting and production (100%) Jill Harris Conception and design (0%) Analysis and interpretation (5%) Drafting and production (0%)

Other manuscripts included in this thesis (submission pending)

Chapter 5: Flomenhoft, G., Ahmad, S. (2020). The Case for Decentralization in National Mineral Ownership for Human Development Contributor Statement of Contribution Gary Flomenhoft (Candidate) Conception and design (100%) Analysis and interpretation (40%) Drafting and production (70%) Shabbir Ahmad (advisor) Conception and design (0%) Analysis and interpretation (60%) Drafting and production (30%)

Other Publications during candidature

Peer Reviewed Journal Articles Flomenhoft, G. The Triumph of Pareto, How Dominant Economics Distorts Reality and Perpetrates Hidden Values. Real-world economics review, issue no. 80, 7 April 2017.

Flomenhoft, G. Escaping the Polanyi matrix: the impact of fictitious commodities: money, land, and labor on consumer welfare. Real-world economics review, issue no. 74, 30 June 2016.

Flomenhoft, G. The Eco-Illogical Cycle and the Politics of Climate Change, Solutions Journal, Volume 6 | Issue 1 | Page 84-90 | January 2015

Book chapters Flomenhoft, G. Total Economic Rents of Australia as a Source for Basic Income, in Financing Basic Income, Overcoming the Cost Objection, Richard Pereira, Editor, Palgrave Macmillan, 2017

Conference Presentations

Do the Bafokeng People Benefit from Platinum on their land? SMI HDR Conference, 22 November, 2018 (Best Keynote), Brisbane, Australia

Extending the Alaska model to overcome the new enclosure of the commons, USBIG, 17th Annual Congress, 24-27 May, 2018, Michael DeGroote Centre for Learning and Discovery (MDCL), McMaster University, Hamilton, Ontario

Economic Rent as a basis for Basic Income in Australia, USBIG, 16th Annual Congress, June 16-18, 2017, The Silberman School of Social Work at Hunter College, NYC

Economic Rent as a basis for Basic Income in Australia, Universal Basic Income in the Asia Pacific Conference, 18 March, 2017, National Chengchi University, Taipei, Taiwan

Reclaiming the Commonwealth, Living Economies Expo, Lyttleton, New Zealand, 2 April, 2017.

Contributions by others to the thesis Advisors Saleem Ali and Kathryn Sturman provided overall supervision and guidance, reviewing, editing, guidance on research methods, conceptual framework, etc. Kathryn Sturman suggested the fieldwork location, and Saleem Ali provided contacts with gatekeepers that made it possible. Kathryn provided extensive editing and writing assistance.

Shabbir Ahmad provided extensive assistance with statistical analysis in chapter 5: The Case for Decentralisation in National Mineral Ownership. This included both the statistical analysis itself and the explanation. The remainder of the paper was mine alone.

Jill Harris reviewed and edited the explanation of the statistical analysis in chapter 6: The Role of Communal Land and Attitudes of the Bafokeng in Beneficiation from Mining. The statistical analysis and entirety of the research and writing was done by me alone.

Statement of parts of the thesis submitted to qualify for the award of another degree

“No works submitted towards another degree have been included in this thesis”.

Research Involving Human or Animal Subjects Ethical review for the Royal Bafokeng Nation Case Study was conducted by the UQ Behavioural & Social Sciences Ethical Review Committee (BSSERC), and approval

was granted on 16 January, 2018 with ethics approval number 17-002. Approval letter is in Appendix.

Acknowledgements

The PhD process has been a mainly solitary academic endeavour for me. Without the support of my colleagues and advisors, I would not have been able to complete it. I am especially grateful to my primary advisor, Dr. Saleem Ali, for supporting my admission to UQ and scholarship, as well as moral support. I highly appreciate the assistance of advisor Dr. Kathryn Sturman who suggested the case study location, and Saleem who facilitated the field work through networking connections. Both provided valuable editing assistance and encouragement throughout the process of conducting the PhD research. Kathryn provided extensive editing feedback which was invaluable. After Saleem moved to Delaware, most of the burden fell on Kathryn, who was willing to take on the task. Dr. Shabbir Ahmad joined my team and I could not have completed the statistics analysis without his help.

I spent a month in South Africa conducting field research in the Bafokeng Community Area known as the Royal Bafokeng Nation. The following people facilitated my field work there: I am grateful to Dr. Sue Cook of Harvard, Dr. Elmie Castleman, Martin Bekker, and other members of the Royal Bafokeng Administration, including Moses Maithufi, Lebogang Kgongwana, Ernie Kemm, Ian Venter, and RBA legal. The Bafokeng Supreme Council approved my research without which I could not have completed it. The surveying staff led by Lebogang Moeketse were invaluable, including Kamogelo Rangwaga, Tiisetso Rantho, Andile Segidi, Neo, and Karabo. I am grateful for the insight and friendship of Tommy Mntande, headman of Robega Village, and a meeting with David Van Wyk, of the Benchmarks Foundation. I am also grateful to Lelapa Travel, Seokobale Guest House, and the Bafokeng people. Martha Bridgeman, editor of the South African Journal of International Affairs, provided extensive and invaluable editing assistance.

At SMI, Dr. Jill Harris was especially helpful with statistics and also with the ethics application. Dr. Jo-Anne Everingham provided helpful feedback on my thesis as well as Dr. Gregory Marston, and Paul Rogers. Dr. Elaine Wightman conducted all my milestone reviews for which I thank her.

SMI colleagues kept my sanity and provided recreation and companionship. These include Kwasi, Mirza, Gabriel, JP, Elenore, Jemma, Juan, Lachlan, Qing, Adam, Miguel, Roberto, Tina, Philipe, Asmaa, Ron, Julia, Diego, Warren, Nena, Allen, Chengdong, Mitch and numerous others. Many thanks for your comradery.

Financial support

I gratefully acknowledge the financial support of the University of Queensland Centennial Scholarship, and International Postgraduate Research Scholarship, as well as project funding from the Sustainable Minerals Institute.

Keywords

Commonwealth, communal title, platinum, Bafokeng, mineral title, subsidiarity, decentralization, mineral rights, Human Development Index, ownership

Australian and New Zealand Standard Research Classifications (ANZSRC)

140205 Environment and Resource Economics, 40%

160505 Economic Development Policy, 30%

160509 Public Administration, 30%

Fields of Research (FoR) Classification

1801 Law, 10%

1402 Applied Economics, 40%

1605 Policy and Administration, 50%

Dedications:

To my late father Hubert Flomenhoft, who travelled to a foreign country with our family to complete his PhD during his mid-career, providing inspiration, and who always regretted not staying in academia, which influenced my decision to do so. Also to my mother Lorelei who is always there for me.

To Peter Barnes who provided the intellectual foundation for this work in his writings on the commons, especially Capitalism 3.0.

To David Bollier, who’s book Silent Theft, first inspired my work on the commons, and for his continuing support and encouragement.

Contents List of Tables ...... i List of Figures ...... ii List of Appendices ...... iii List of Abbreviations ...... iv 1 Chapter One: Introduction ...... 1 Research Problem ...... 1 1.1.1 The Resource Curse ...... 1 1.1.2 Sense of Fairness- Basis in ethology and anthropology...... 2 1.1.3 Minerals as a Common Property Resource ...... 3 The Commons Synthesis ...... 5 What is the Commonwealth? ...... 5 What is the Economic Commonwealth and Where Did it Go? ...... 6 Inequality and the Need for an Economic Commonwealth ...... 7 The Mineral Commonwealth ...... 7 Minerals and Community Control ...... 8 Research Aims and Objectives ...... 9 Research Questions ...... 11 Thesis Outline and Strategy ...... 11 2 Chapter Two: Methodology ...... 14 Overview ...... 14 Challenges ...... 14 Methods ...... 16 2.3.1 Literature Review ...... 17 2.3.2 Historiography ...... 18 2.3.3 Statistical Analysis of ownership laws and HDI ...... 19 2.3.4 Field work: Survey questionnaire, oral history, interviews ...... 20 2.3.5 Ethnography ...... 28 2.3.6 Summary ...... 29 3 Chapter Three: Literature Review and Conceptual Framework ...... 30 The Resource Curse ...... 30 Resource Ownership ...... 32 Resources and Human Development ...... 34 Resource Nationalism ...... 35 Resource Decentralisation/Subsidiarity ...... 35 Methods of Decentralisation ...... 38 Post Conflict Decentralisation ...... 38

Indigenous Rights/Devolution ...... 42 Dividend/Cash Transfers ...... 43 Common Property Ownership ...... 45 The Commons Sector ...... 46 Summarizing the Gaps ...... 48 Conceptual Framework ...... 49 4 Chapter Four: Historical and Empirical Basis for Communal Title in Minerals at the National level: Does Ownership Matter for Human Development? ...... 53 Introduction ...... 53 4.1.1 What is the Economic Commonwealth in the Mining Sector? ...... 53 4.1.2 Research Question and Methods ...... 54 4.1.3 The importance of ownership...... 54 4.1.4 A Short Summary of the “Resource Curse” ...... 56 4.1.5 The Rentier State Theory of the Resource Curse ...... 56 4.1.6 Sustainability in the Mining Industry ...... 57 4.1.7 Categories of Property Rights in Land (See also Appendix 4-1) ...... 57 Historical development of Property rights ...... 58 4.2.1 Roman Law-Institutes of Justinian, ius gentium (Law of Nations) ...... 58 4.2.2 Communal Property in Roman law ...... 58 4.2.3 Renaissance Rebellion against Papal Rights ...... 60 4.2.4 Dominican Support for Native Rights ...... 61 4.2.5 British Civil and Common Law ...... 61 4.2.6 Ad Coelum Doctrine ...... 62 Communal Property Rights in Western Thought ...... 62 4.3.1 Locke’s Proviso ...... 62 4.3.2 Paine’s Justification for Communal Ownership of the Earth ...... 62 4.3.3 Governing the Commons ...... 63 4.3.4 The Public Trust Doctrine ...... 63 Contemporary Mineral Title Regimes ...... 64 4.4.1 Supra-National Communal Ownership Regimes: International Law, Law of the Sea, Antarctica, and Space Law ...... 64 4.4.2 Sub-National Communal Ownership Regimes ...... 68 4.4.3 National Mineral Title Regimes ...... 72 Sense of Fairness- Basis in ethology and anthropology ...... 79 Overcoming the resource curse through distribution of revenues and mineral titles ...... 79 Conclusion Chapter 4 ...... 79

5 Chapter Five: The Case for Decentralization in National Mineral Ownership for Human Development ...... 81 Introduction ...... 81 Research Question and Design ...... 82 Organization of the study/chapter ...... 83 Brief Literature Review ...... 83 5.4.1 Resource Ownership and Development ...... 83 5.4.2 Resource Decentralisation ...... 85 5.4.3 Methods of Decentralisation ...... 86 5.4.4 Devolution ...... 87 What is Decentralised Ownership in this Analysis? ...... 88 Methods and Analysis ...... 89 5.6.1 Descriptive Analysis of Decentralisation Impact ...... 91 5.6.2 An Econometric Analysis ...... 93 5.6.3 Instrumental Variable Approach to Overcome Endogeneity Issues ...... 95 5.6.4 Data Description ...... 96 5.6.5 Ordinary Least Square Estimates ...... 98 5.6.6 Results of Instrumental Variables Approach ...... 104 Conclusions ...... 107 6 Chapter Six: Communal Land and the Attitudes of the Bafokeng on Benefits from Mineral rights ...... 109 Introduction ...... 109 Methodology and structure of analysis ...... 112 History of land law in South Africa ...... 112 Survey overview and results ...... 117 6.4.1 Ownership Survey ...... 118 6.4.2 Benefits survey ...... 120 RBA investments and expenditures, and the budget survey ...... 125 6.5.1 Summary of Responses and Comparison to RBA Budget ...... 126 6.5.2 The impact of employment ...... 128 The impact of centralisation ...... 128 The impact of the mines ...... 130 Summary of the regression analysis ...... 131 Discussion: The RBA and perceptions of benefit among the community ...... 132 Supplemental Analysis: The Mineral Commonwealth and Ostrom’s CPR Principles...... 133 Conclusion ...... 136 7 Chapter Seven: Conclusion ...... 138

Precedents exist for the Economic Commonwealth ...... 138 Decentralised ownership condusive to development ...... 139 Communal ownership necessary, but not sufficient for local benefits ...... 141 Prospects for the Economic Commonwealth ...... 144 Appendices And Supplemental Materials ...... 159

List of Tables Table 2-1: Research Methods ...... 17 Table 2-2: Field Work Timeline ...... 21 Table 2-3: Interviews Conducted with local officials ...... 22 Table 4-1: Summary of Mineral Title Regimes and HDI (From Appendix 5.2) ...... 77 Table 5-1: Decentralised Ownership Countries ...... 88 Table 5-2: Summary of Mineral Title Regimes and HDI (Flomenhoft, 2018) ...... 91 Table 5-3: Independent Samples t-test results ...... 92 Table 5-4: Summary Statistics ...... 97 Table 5.5: Regression Results (Model 1-5) ...... 101 Table 5-6: Regression Results 6-10 ...... 102 Table 5-7: Instrumental Regression Results ...... 105 Table 6-1: Bafokeng Ownership Survey ...... 118 Table 6-2: RBA Expenditures 2016 ...... 126 Table 6-3: Bafokeng Budget Survey ...... 126 Table 6-4: Comparison of RBA Budget with Survey Results on Budget Priorities ...... 127

List of Figures Figure 2-1: Scientific Process (Kunz, 2013)-adapted from (Singleton & Straits, 2018) ...... 15 Figure 2-2: Methods used to acquire understanding about Communal and Decentralised Mineral ownership ...... 16 Figure 2-3: Flow of Platinum Money ...... 26 Figure 3-1: Research Process (Source: Jill Harris adapted from (Bryman, 2016)) ...... 49 Figure 3-2: Conceptual Framework ...... 50 Figure 4-1: Alaska Dividend Amounts per Year (Apfc.org) ...... 71 Figure 4-2: Mongolian Public Mineral Stock certificate ...... 74 Figure 5-1: Independent Samples t-test graph ...... 92 Figure 6-1: Question 3: Who should own the platinum in the Royal Bafokeng Nation? ...... 120 Figure 6-2: Question 4a: Do the RBA Services benefit you or your family? ...... 121 Figure 6-3: Benefits Survey Results-Strongly agree (11/493) ...... 122 Figure 6-4: Benefits Survey Results-Agree (101/493) ...... 122 Figure 6-5: Benefits Survey Results-Neutral (127/493) ...... 123 Figure 6-6: Benefits Survey Results-Disagree (155/493) ...... 123 Figure 6-7: Benefits Survey Results-Strongly Disagree (98/493) ...... 124 Figure 6-8: Bafokeng Platinum Belt and Villages-Source Bafokeng Planning Dept. (Ernie Kemm) ...... 130

List of Appendices Appendix 4-1: Systems of Property Ownership ...... 159 Appendix 4-2: National Ownership Categories and Classification (Flomenhoft, 2018) ...... 161 Appendix 5-1: National Mineral Title Laws and HDI (Flomenhoft, 2018) ...... 164 Appendix 6-1: Summary of Bafokeng Benefit Survey ...... 170 Appendix 6-2: Statistical Analysis of Satisfaction Factors (Bafokeng Survey) ...... 171 Appendix 6-3: Survey Questionnaire: An Inquiry into the Economic Commonwealth of Mineral Resources-Royal Bafokeng Nation………………………………………………………………………………175 Appendix 6-4: Participant Info Sheet (Survey) ...... 176 Appendix 6-5: Permission Document from Bafokeng Government ...... 178 Appendix 6-6: Ethics Approval Form-Bafokeng Survey Project ...... 179

iii

List of Abbreviations AIAN = American Indian and Alaskan Native AIANSF = American Indian and Alaskan Native Summary File APFD = Alaska Permanent Fund dividend BSSERC = Behavioural & Social Sciences Ethical Review Committee CFC = Chlorofluorocarbons CHM = common heritage of mankind CPRs = Common Pool Resources CRAMRA = Convention on the Regulation of Antarctic Mineral Resources CSG = Commons Strategies Group DDT = Dichlorodiphenyltrichloroethane DRC = Democratic Republic of Congo DTA = Devolution Transfer Agreement EITI = Extractive Industries Transparency Initiative EPWP = Expanded Public Works Program EU = European Union EPWP = Expanded Public Works Program FPIC = Free Prior and Informed Consent GDP = Gross Domestic Product GFC = Global Financial Crisis (2008) GMI = Global Mining Initiative GNI = Gross national income GOXI = Governance of Extractive Industries HDI = human development index HKSAR = Hong Kong Special Administrative Region IBM = International Business Machines ICCPR = International Covenant on Civil and Political Rights ICESCR = International Covenant on Economic, Social and Cultural Rights ICMM = International Council on Mining and Metals IFAD = International Fund for Agricultural Development ILO = International Labour Organisation IMD = International Institute for Management Development IMF = International Monetary Fund ISA = International Seabed Authority

ITC = International Telecommunication Convention ITU = International Telecommunication Union MMSD = Mining, Minerals and Sustainable Development MREC = Medical Research Ethics Committee NGO = Non-governmental Organization NRGI = Natural Resources Governance Institute OST = Outer Space Treaty PAC = protected antipode circle PGMs = Platinum Group Metals PPP = Purchasing Power Parity PULA = (Bafokeng) Population and Use of Land Survey RBA = Royal Bafokeng Administration RBH = Royal Bafokeng Holdings RBN = Royal Bafokeng Nation RBNDT = Royal Bafokeng Nation Development Trust RBPlat = Royal Bafokeng Platinum RDP = Reconstruction and Development Programme RPSNR = Resolution on Permanent Sovereignty over Natural Resources RSA = Republic of South Africa SMI = Sustainable Minerals Institute SMMEs = small, medium, and micro enterprises SPSS = Statistical Package for the Social Sciences SWF = Sovereign Wealth Fund TINA = There Is No Alternative (To free market globalization) UN = United Nations UNCERD = United Nations Committee to Eliminate Racial Discrimination UNCLOS = United Nations Convention on Law of the Sea UNDRIP = United Nations Declaration on the Rights of Indigenous Peoples US = United States ZAR = Zuid-Afrikaansche Republiek (South African Republic or Transvaal Republic)

1 Chapter One: Introduction

"The earth, therefore, and all things therein, are the general property of all mankind, from the immediate gift of the Creator." -- William Blackstone (Commentaries, II, Chap. I, page 3)

“There are two kinds of property. Firstly, natural property, or that which comes to us from the Creator of the universe -- such as the earth, air, water. Secondly, artificial or acquired property -- the invention of men. In the latter, equality is impossible; for to distribute it equally it would be necessary that all should have contributed in the same proportion, which can never be the case... Equality of natural property is the subject of this little essay. --Thomas Paine (Agrarian Justice, 1797)

“When the Great Way prevailed, natural resources were fully used for the benefit of all and not appropriated for selfish ends... This was the Age of the Great Commonwealth of peace and prosperity." -- Confucius (BC 551-479)

Research Problem 1.1.1 The Resource Curse

The extractive industries, governments, and civil society have made many efforts in recent years to counteract and overcome the historical problem of the so-called “resource curse.” The problems encapsulated by the term “resource curse,” mean countries that are resource dependent often have worse outcomes than countries with fewer resources (J. D. Sachs, Warner, 1995). These countries continue to be plagued by poverty, inequality and instability. One of the most influential strands of this theory attributes the problem, among other causes, to the “rentier state”, which is able to bypass accountability to its citizens by relying more on resource revenues than on taxes from a broad base (Ross, 2001).

Some of the efforts to overcome the “resource curse” include the UN’s call for Free Prior and Informed Consent (FPIC) for local and indigenous communities where mining is planned. In some cases, communities are given the right to veto projects in their territory and to receive compensation. The International Labour Organisation and UN Committee on the Elimination of Racial Discrimination (UNCERD) have promoted the cause of Indigenous human rights (ILO, 1989), (United Nations-CERD,

2000). The International Council on Mining and Metals (ICMM) and Mining, Minerals and Sustainable Development Project (MMSD) have promoted sustainability in mining (ICMM, 2015). There are many voluntary standards promoted for the private sector to avoid abusive practices in the mining and petroleum sectors. A growing number of companies now seek a “social license to operate” in order to satisfy concerns of host communities.

What many of these initiatives have in common is a focus on the local level of decision- making and control over mineral extraction. This raises the question of whether the rentier state’s power can be curtailed by decentralisation of mineral ownership?

1.1.2 Sense of Fairness - Basis in ethology and anthropology

Recent ethology research has found that the sense of fairness and empathy extends to primates and other animals, not just humans. Prof Frans de Waal in particular has written numerous books about the evolution of morality and that it is inherent in not only human beings but also in primates (Waal, Macedo, Ober, & Wright, 2006). Other researchers have confirmed the same findings (Yamamoto & Takimoto, 2012). This demonstrates that the sense of fairness is a fundamental emotion going back far into our evolution.

Finding this sense of fairness and empathy in other primates and humans directly contradicts the assertion by neo-classical economic theory that humans act only as individuals driven purely by selfish behaviour. By not considering empathetic behaviour and fairness in economic relations, economists are bound to construct a distorted system in the distribution of resources.

Therefore, if people do not receive ability to consent, opportunities to participate in governance, and compensation for extraction in their communities, they will undoubtedly develop feelings of unfairness, which will contribute to resentment and conflict. Indeed, the sense of unfairness in mining projects such as the Panguna mine in Bougainville about compensation, ethnic favouritism, state monopolisation of revenue, and environmental destruction led to a civil war with the deaths of 10,000 or more people (Avery, 1990).

1.1.3 Minerals as a Common Property Resource

The mineral owner is the one entitled to compensation from mining activities, even when conducted by other agents such as mining companies (Cawood & Minnitt, 1998, pp. 369,370). At the international, trans-oceanic, and even extra-terrestrial level, communal ownership of minerals is a universal principle as articulated by the principle of the “common heritage of mankind.” At the sub-national level of aboriginal tribes, first nations, and traditional peoples communal ownership has been the primary form of land ownership since time immemorial. Some sub-national states such as the US state of Alaska recognize communal ownership of petroleum resources as demonstrated by the Alaska Permanent Fund dividend. However, at the nation-state level, discussion of common or communal rights is almost non-existent since most national governments claim ownership of resources.

If minerals are inherently a common property resource, defined here as the “economic commonwealth,” should they not be communal property owned by the people? This is the normative question addressed by this thesis in chapter 4 on economic and legal historiography, and in chapter 6 with regard to the legal rights of an African traditional community. The empirical aspect is addressed in chapter 4 in the Human Development Index (HDI) analysis of nation states based on mineral ownership rights, and more extensively in chapter 5 in the regression and instrumental analysis of the impact of centralised and decentralised ownership on the HDI. Due to the economic inequality and injustice often associated with the resource curse, this analysis makes an important contribution to the debate about mineral ownership using both normative and empirical means.

Minerals are inherently a common property resource because they are produced by nature, not by human effort. Therefore, no one has a legitimate prior claim, according to the Lockean principle that the application of labor to the commons is what creates private property (Locke, 1689). The issue is then how best to distribute the benefits from mining. Several alternatives are currently in effect (Ross, Lujala, & Rustad, 2012). Sub-national regions, governments, or peoples:

1. May levy taxes and royalties directly on the resource industry (fiscal decentralisation) The Bafokeng people in South Africa, for example, received royalties of 22% of Impala Platinum taxable income and one million shares on all Bafokeng areas where Impala mining took place (Mbenga & Manson, 2010). 2. May receive a direct transfer from the central government that is a defined share of the revenues originating in the region. Each oil-producing state in Nigeria, for example, receives 13 percent of the oil revenues generated in that region. 3. May receive indirect transfers—through the national budgeting process—that reflect preferential treatment for producing regions. Small unitary states such as the Gulf Cooperation Council follow this model (Mottu & Ahmad, 2002).

The issue of ownership of ultimate title to minerals and other natural resources is therefore of great importance as it can have a significant influence on the economic development of communities, regions, and nations as well as the distribution of wealth. It may determine the power to derive revenue directly from mining operations rather than depending on redistribution from the central government. The current trend in mining rights is mainly for states to claim ownership of sub-surface resources. States are then under intense pressure from corporations to grant mining rights with generous concessions sometimes involving kickbacks and bribery (Wild, 2018). In the case of petro-tyrannies such as Saudi Arabia and the United Arab Emirates, state owned petroleum companies deliver all the revenue to royal families. The problem with state ownership is obvious in dictatorships, or in corrupt states such as Nigeria where there is massive resource wealth, but the people remain poor.

Communities often need to be protected from outsiders who come into their territory to exploit resources. Arguably, it is because they do not have legal sovereignty over their land and minerals. These rights have usually been usurped historically by nation states who claim ownership rights over all valuable minerals in their territory. In British commonwealth realm countries, which still have the queen as head of state, minerals are often stated as being owned by “the crown.” In a sense, nation-states simply took over the role of the monarchs and feudal aristocrats who claimed the divine right of kings to own all the land in the kingdom. Residents of their territories were simply subjects who were required to assent to being ruled by monarchs. Most nation-states

4 now claim ownership of all minerals, and corporations granted mineral leases have to be coerced into consideration of communities’ rights. The situation might be quite different if communities retained communal title to their lands and resources, and had complete sovereignty over the use of those minerals.

The Commons Synthesis During the 20th century, the debate in economics was a question of whether the private market or state should be the owner and arbiter of all property. The world was divided into the two opposing camps of capitalism and communism. Since the demise of the Soviet Union, the prevailing trend has been the privatization of public assets. This has been promoted by western multi-lateral institutions such as the World Bank, central banks associated with the European Union (EU) and other governments, and structural adjustment recommended by the International Monetary Fund (IMF). Property rights are defined as primarily private, and the system is divided between market and state, with the state subject to tremendous economic pressure to act on behalf of private interests, especially trans-national corporations. This is an ideologically based system designed to benefit private interests, not a justice-based system defined by legal rights or principles.

The division between market and state is a false dichotomy. Hegel proposed the concept of the dialectic. History swings between the thesis, anti-thesis, and finally the synthesis of the two. A possible synthesis beyond the government and private market is the “commons” sector, indicating those things belonging directly to the public, not to government or private business. The issue of communal mineral ownership is part of the larger global trend toward recognition of the common aspect of many natural and social assets.

What is the Commonwealth? Commonwealth is defined as a community based on the public good. According to US constitutional scholar and second President John Adams, a commonwealth indicated a society in which ultimate political power was vested in the people, and had a wide distribution of wealth. Adams defined a political commonwealth with great clarity and detail, including “separation of powers” of the legislative, executive, and

5 judicial branches of government, and a bicameral legislature as a check on monopoly power. He promoted the concept of “a nation of laws not men,” which is taken as the defining principle of democracy in western societies (Adams, 1787). The most widely known use of the term is probably the British Commonwealth, including fifty-three countries, whose political principles are described in the Singapore Declaration of Commonwealth Principles, especially principle #6. I believe in the liberty of the individual, in equal rights for all citizens regardless of race, colour, creed or political belief, and in their inalienable right to participate by means of free and democratic political processes in framing the society in which they live. We therefore strive to promote in each of our countries those representative institutions and guarantees for personal freedom under the law that are our common heritage (Commonwealth Secretariat, 2004). The principles of a commonwealth go back much further to the writings of British author James Harrington, who wrote The Commonwealth of Oceana; A System of Politics (Harrington, 1992), and as far back as Politics in 350BC (Aristotle & Reeve, 2009). Commonwealth is usually defined in political terms, not economic.

What is the Economic Commonwealth and Where Did it Go? According to the dictionary definition, commonwealth literally means common property. Nevertheless, all the definitions of commonwealth in widespread use globally remain rather vague on the subject of the economy and property rights. The consensus view is that a wide distribution of land and property is conducive to good government, preventing either monarchy or oligopoly. In his essay on Harrington, John Adams noted the influence of wealth on governance, “where the riches are, there will be the power: so if a few be as rich as all the rest, a few will have as much power as all the rest; in which case the commonwealth is unequal, and there can be no end of ‘staving and tailing’1 till it be brought to equality” (Adams, 1787).

According to Aristotle,

1 Webster’s 1913 Dictionary equivalent: “to provoke the attack of a swarm of spiteful enemies or spirited critics”

“Immoderate wealth, as where one man or the few have greater possessions than equality, or the frame of the commonwealth will bear, is an occasion of sedition, which ends for the greater part in monarchy, and that for this cause the ostracism hath been received in diverse places, as in Argos and Athens” (Aristotle & Reeve, 2009, p. 14). No instructions are given about how to prevent this in the political commonwealth literature.

Aside from minerals, many other aspects of the commons are extremely valuable, but are given away to corporations. The public broadcast spectrum, for example, is worth around $600 billion annually in the US (Snider, 2003), but is allocated mostly for free to media corporations to use “in the public interest.” These are examples of aspects of the economic commonwealth, which can be defined as resources of the commons that have monetary value, but are usually privatized by corporations rather than owned and managed communally by the public.

Inequality and the Need for an Economic Commonwealth According to a recent Oxfam report, in January 2019 twenty-six individuals hold the same amount of wealth as the poorest half of humanity, which is 3.8 billion people. The wealth of the poorest half declined by 11% in the last ten years (Lawson, 2019, p. 12). In the context of the current massive increase in worldwide wealth inequality, the subject is an urgent one. The recent best seller by Thomas Pikkety, “Capital in the 21st Century,” advocates a global tax on capital assets. However, this is an after-the- fact redistribution of already acquired wealth. There is no basis for preventing maldistribution in the first place, in order to attain an economic commonwealth. Defining and redistributing the economic commonwealth remains an unfinished or perhaps even an unattempted task.

The Mineral Commonwealth The basic assumption is that the earth and its minerals are common property resources, part of the commonwealth to which people are all entitled. In the mining sector, the economic commonwealth can be defined by communal title. Communal title to minerals exists at the supra-national level for the high seas, deep seabed, Geo- synchronous orbital slots, outer space objects, the moon, and potentially Antarctica.

At the sub-national level, communal ownership is defined through communal, tribal, or native title. At the national level, there are very few cases of communal title to minerals, since most countries have state (or crown) title.

Minerals and Community Control In the mineral space, the problem of community control over resources is acute. The ownership problem is most identified with the trends toward greater community ownership and control of their resources. The primary manifestation of this trend is the internationally recognized best practice in mining of FPIC (Free Prior and Informed Consent). This coincides with greater sovereignty over resources by native peoples worldwide. All communities benefit from this trend. Since most nation-states claim ownership of all minerals on their territory, they generally grant prospecting and mining rights to corporations who have the capacity to conduct these specialized and capital- intensive procedures. In the past, corporations often ran roughshod over the rights of communities, and developed a reputation as an exploitive, abusive industry.

Starting in the 1990’s and in some cases earlier, indigenous communities began to assert greater claims for their rights. Many efforts at the national level preceded agreements at the United Nations international level. For example, the Mineral Titles Act in the Northern Territories of Australia gave aboriginal tribes the right to assent or dissent from mineral extraction on their land beginning with the Aboriginal Land Rights Act 1976 (Northern Territory). The Australian High Court's 1992 decision in Mabo v. Queensland established the principle of “native title,” that native peoples had pre- existing land rights prior to colonization by Europeans. This led to the Native Title Act 1993, which grants indigenous people a mechanism to establish their pre-existing land rights and the right to negotiate regarding extractive projects on their land.

In 1991, the International Labour Organization (ILO) Indigenous and Tribal Peoples Convention 169 places responsibility on national governments to protect the rights of indigenous and tribal peoples, including their social, economic and cultural rights, customs, traditions and institutions. Article 7, Section 1 in particular states: The peoples concerned shall have the right to decide their own priorities for the process of development as it affects their lives, beliefs, institutions and spiritual

well-being and the lands they occupy or otherwise use, and to exercise control, to the extent possible, over their own economic, social and cultural development. In addition, they shall participate in the formulation, implementation and evaluation of plans and programmes for national and regional development which may affect them directly (ILO, 1989).

In 1997, the UN Committee on the of Elimination Racial Discrimination (UNCERD) General Recommendation XXIII, asks nation-states to confirm that indigenous peoples’ informed consent is attained before approving projects that impact their rights (United Nations-CERD, 2000). In 2009, the International Fund for Agricultural Development became the first international financial institution to adopt FPIC as an operational standard (Cotula, 2009). Most recently in 2017, the Convention on Biological Diversity, ratified by 157 countries, recognizes the rights of indigenous communities to be consulted regarding development on their land (United Nations, 2017).

The industry also established initiatives to recognize indigenous rights. The mining industry’s Global Mining Initiative (GMI) established the Mining, Minerals and Sustainable Development Project (MMSD) from 2000 to 2002 to consider sustainable development measures for the mining industry. The MMSD conclusion was that “Government should recognize and uphold the rights of indigenous people and companies should act ‘as in to gain consent’” (World Business Council for Sustainable Development, 2002).

Research Aims and Objectives The first objective of this research is to fully evaluate the concept of collective, communal, or common title to mineral resources historically in law and empirically in current practice at the international, national, and sub-national level to establish its history and legitimacy. The second objective is to evaluate the success of communal or decentralised ownership of minerals in nation states through quantitative analysis in order to evaluate the hypothesis of better development outcomes with communal or decentralised ownership. The third objective is to evaluate the results of communal mineral ownership in a local setting, and to evaluate peoples’ perception of benefits

9 from communal title through survey fieldwork. These three lines of enquiry are designed to provide deeper insight into the problem of the resource curse.

The objective of an inquiry into communal mineral ownership is pertinent to the field of mining law because it is largely missing in the context of domestic laws. The principle of communal ownership is present in international law, seabed law, outer space law, and native title law, but has rarely been applied to domestic law. There are numerous theories of the resource curse, but few remedies offered. An analysis of communal ownership will add to the literature on development. This will add to the knowledge of the resource curse and could help explain the theory of the rentier state and other theories. A study of communal title will add to the knowledge base of current commons research, and management of common property resources.

The current legal basis for mining rights in most countries (state ownership) is in conflict with international law and UN principles such as the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP-2007) and the International Convention on the Elimination of all Forms of Racial Discrimination (1965). For example, in an attempt to comply with the 1965 UN anti-discrimination convention, Australia passed the Racial Discrimination Act 1975. As can be seen in the Mabo case and other native title cases, native title law cases were required to be evaluated in light of the anti- discrimination law. This resulted in a great deal of confusion because prior domestic laws conflicted with this principle. It is a great strength of common law perhaps, that it is adaptable to changes in social conventions and principles over time. Neither individual ownership of mineral rights, nor state ownership (except in very well governed states) has solved the problem in the past. The vast majority of the public has their communal rights to resources ignored and sense of fairness violated. This leads to long lasting problems and conflicts, such as the civil war in Bougainville, or the horrible resource wars in the Democratic Republic of Congo.

By a comprehensive evaluation of the principle of communal title in general, not limited to native title, this missing element might be brought to mineral law. By establishing the principle of communal ownership, it is possible that resource conflicts and the resource curse might be mitigated. This will further research into the commons and increase options in property law for communal title in non-native areas. It can inform

10 the concept of free prior and informed consent, by supporting the provision of compensation. It could provide guidance for companies seeking a social license to operate, and predict conflict or cooperation from local residents in mining locations. New knowledge as well as paths to additional future research has been gained.

Research Questions Primary: How does communal or decentralised ownership of minerals address the resource curse problem?

Secondary: A. What is the historical and legal basis for communal or joint ownership of minerals and natural resources? B. What type of mineral ownership provides the best development outcomes at the national level? C. How does communal land benefit a traditional community, which has communal ownership of mineral-bearing land, and what are their attitudes about benefits received?

Thesis Outline and Strategy The purpose of this thesis is to investigate the potential for communal ownership of minerals (what the author is calling the “mineral commonwealth”) to mitigate the resource curse. The thesis starts in chapter 1-3 with an introduction, which includes literature review, methodology, conceptual framework and other explanatory material. The idea of the economic commonwealth is introduced as an original concept that demands extensive investigation due to being ignored in favour of the concept of political commonwealth.

The overall strategy of the thesis is to analyse communal ownership of minerals (the mineral commonwealth) from multiple approaches for a robust analysis of the topic. These strategies include a historiography of communal property concepts in chapter 4, a statistical analysis in chapter 5, and a case study of communal mineral ownership in chapter 6.

The first part of this research is set out in chapter 4 in a review of the historical and legal principles regarding communal property rights, and a determination of precedent for communal title to minerals in Western law. After completing the historiography, an original list of the contemporary mineral ownership laws for 193 countries is presented, including six different ownership types (not including the seventh category of no minerals). According to James Otto, a prominent mineral economist and lawyer, this is the only complete list of its kind. The purpose is to determine if any country established communal (i.e. public) ownership of minerals. These two steps attempt to answer research question “A” as to whether there is a basis in history, justice, or law for communal ownership of resources.

Using this original taxonomy, the Human Development Index (HDI) for each country was compared. The impact of all the different ownership systems on human development was evaluated using a multiple regression analysis. This attempted to address the primary research question about whether communal title has better development outcomes, but proved difficult due to small sample sizes. Also, communal ownership did not exist in practice at the national level, but only in legal rhetoric.

Therefore, the hypothesis was revised by inductive reasoning due to new information. Ownership laws were divided into two categories, centralised and decentralised, and the means were compared of the human development index (HDI). This resulted in a significant finding of better outcomes from decentralised versus centralised ownership answering research question “B” about what type of ownership has better outcomes. Decentralised ownership served as a contrast to centralised ownership by the state, not as communal ownership per se, but as ownership “closer to the people.”

It was then necessary to conduct a more detailed statistical analysis to disaggregate the impact of ownership from other factors influencing development. With the assistance of statistical expert Shabbir Ahmad, who is also an advisor, results showing the statistical significance of decentralised mineral ownership on development outcomes were obtained. This work is described in chapter 5.

Chapter 6 is a case study of a traditional African community, the Royal Bafokeng Nation (RBN), and whether they benefit from their communal ownership of minerals. The intention of chapter 6 was to conduct fieldwork in a local area, which has communal title to minerals, to obtain empirical evidence of the effectiveness of communal title. This required a field trip to the Rustenburg region of Northwest Province, South Africa. The Bafokeng people have maintained their communal ownership system for hundreds of years including through the recent apartheid period. Due to serendipity, their land happens to sit on part of the “Bushveld” complex, which contains 80% of the platinum in the world.

The case of the Bafokeng is a counter-example to the disastrous Bougainville case. By gaining land rights in the mid-late 1800s, the Bafokeng acquired mineral rights to the rich platinum deposit on their land. Through political and legal battles for 130 years, the Bafokeng fought to keep legal title to their lands and to receive fair royalties for their minerals. As a result of their communal mineral ownership, they have received substantial mineral revenues which they use for development. Through prudent management, good governance, and community development projects, the Bafokeng are accelerating the social development of their people. Therefore, this case study provides empirical evidence for impact of communal ownership of minerals to produce better development outcomes. This case study attempts to answer the primary research question, as well as secondary research questions B, and C, especially the question as to whether communal ownership of their land provides benefits to the community, and their perceptions about it.

A summary of findings in chapter 7 concludes the thesis. In this chapter, the key findings of the study are summarised, and a description of how the thesis has met the research objectives and answered the research questions is provided. The chapter outlines the contribution of the thesis to literature and policy. Avenues for future research are also identified.

2 Chapter Two: Methodology Overview The methodology for this research was based on the standard scientific method (positivism) of a working hypothesis, qualitative and quantitative analysis, using deductive reasoning. A working hypothesis should be potentially fruitful and not merely plausible (Peirce, 1908). The hypothesis that mineral ownership has a bearing on development outcomes is certainly plausible; one of the most famous theories of development by Hernando deSoto in his book, “The Mystery of Capital,” is that individual titles to residential and agricultural land are the key to development (de Soto, 2000). The hypothesis here is that communal ownership would have better development outcomes for the community or country involved for the reasons already explained: Minerals are inherently a common property resource, and people desire fairness. Furthermore, at the supra-national and sub-national levels communal ownership is the norm.

Challenges The area of comparative analysis at the national level was the most difficult. At the national level, ownership by the state comprises the majority of cases. Communal ownership is mainly practiced at the subnational level in the cases of Native American, Canadian, African and Australian traditional communities. Due to the small sample size and the lack of communal title in national mining laws other than in rhetoric, statistically significant results from analysis of six categories of national mineral ownership laws were unable to be obtained. Therefore, the hypothesis was partly revised. In chapter 5 national mining laws were aggregated into centralised and decentralised categories and analysed on that basis. This process can be explained by the following diagram of the scientific method (Figure 2-1)

Figure 2-1: Scientific Process (Kunz, 2013)-adapted from (Singleton & Straits, 2018)

The initial hypothesis was that communal ownership (title) would have better development outcomes. At the national level, communal title essentially does not exist. This hypothesis was unable to be tested. Based on this observation, using inductive logic and generalizing from available data, a new theory was formulated that decentralised ownership would have better development outcomes. Therefore, the original hypothesis was revised into a new hypothesis using decentralised ownership as a substitute for communal ownership as the primary independent variable for the national level analysis. The definition of decentralised ownership in this context and the analysis are contained in chapter 5. Communal ownership was still evaluated in chapters 4 and 6.

Methods Figure 2-2: Methods used to acquire understanding about Communal and Decentralised Mineral ownership

Field work/Surveys Statistical Oral history analysis

Historiography Interviews

Communal Literature Property Ethnography Review Understanding

The methods used in this thesis include literature review, historiography, taxonomy of national ownership laws, statistical analysis (such as correlation and regression analysis with instrumental variables), survey fieldwork including questionnaires, focus groups, and oral history. The following table explains the differences between several social science research methods that were employed. Historiography was used extensively in chapter 4 to determine the basis for communal ownership of minerals in history and in law. Chapter 5 used statistics to evaluate the impact of mineral ownership on human development. Chapter 6 also used some statistics to determine the most important factors in people’s perception of benefits received by the community administration from mineral revenues. A month long case study and fieldwork was completed in the Bafokeng traditional region of South Africa. A survey questionnaire was administererd to members of the community. Informal focus groups were conducted, and extensive oral history was recorded. Members of the community were observed and interacted with on a daily basis for a month, which resulted in gaining ethnographic knowledge. The following is a summary chart of different

16 emphasis used in historiography, case studies and ethnography (O'Brien, Remenyi, & Keaney, 2003).

Table 2-1: Research Methods

Historiography Case Ethnography Studies Key focus Chronology Event/s Culture Sources of Any authentic and Primarily Primarily Evidence credible source interviews observation and corporate documents Potential for the Low Medium Low use of analytical or computer tools Delivery of Narrative leading to Narrative, Narrative, results hypotheses hypotheses hypotheses and and theory theory Generalisability Not relevant Some scope Some scope Validity Strong potential Strong Strong potential potential Potential for Strong Strong Strong academic rigour Major challenges Finding authentic and Obtaining Usually a single credible evidence and adequate viewpoint. Having objectively interpreting it access to the the time required to people or acquire the deep organisations understanding and required then presenting

2.3.1 Literature Review

A review of literature was conducted encompassing the resource curse, doctrines of resource ownership, decentralisation in the mining industry, and Ostrom’s and others theories of the commons. The literature revealed shortcomings in the area of resource ownership, which has not been studied extensively for its impact on development. Decentralisation of revenue, devolution of ownership to aboriginal societies, private ownership, and corporate ownership have been studied. The study of mineral ownership by level of government is unique to this dissertation. Only Otto has used similar categories of ownership for analysis.

2.3.2 Historiography

“Without access to a history of the issues and the ideas being examined it is difficult to make sense of the current situation. Being able to have a broad perspective of the history and the current situation opens the way to being able to make a valuable contribution to the theoretical body of knowledge in the field” (O'Brien et al., 2003, p. 135). The lack of communal title in domestic laws and the denial of communal native title for centuries cannot be understood without reference to the history of mining title and mining laws historically. The history of colonization by the Spanish, German, Portuguese, French, and British empires had an enormous impact on native communities and their land and mineral rights. The major influence of Roman law on western law and British common and civil law in particular was evaluated. An anthropological understanding of native communal title is also necessary in terms of native customs. Historiography research involves the following nine steps (O'Brien et al., 2003, pp. 138-141):  The research question  The relevance check  The scope of the research  Sources of evidence  Assessment of methods of analysis  Assembling the evidence  Developing the story  Critiquing the story  The outcome of the research

Chapter 4 includes an extensive historiographical analysis of property ownership principles and communal ownership in particular. This analysis extended back to the Institutes of Justinian in the Roman Empire, and up to modern times in many mostly western cultures. Insight was gained about the trajectory of communal ownership throughout history, and its application to mining and mineral ownership.

Chapter 4 uses qualitative and quantitative methods. Historiography is used to evaluate the basis of communal mineral rights in law, justice, and history. Extensive evidence is found, especially in Roman law, for various concept of communal ownership as defined by the Latin terms res universitatis and res communis. A

18 literature survey determined the existing property ownership regimes at the international, national, and sub-national level. There is extensive evidence for communal ownership at the supra-national and sub-national level (traditional communities). Mineral laws for 193 countries were placed in six different categories of mineral ownership slightly different than James Otto (J. Otto, 2015). This was an original contribution to the literature, as a complete list of mineral ownership for every country did not exist prior to this research according to mineral lawyer and economist Otto. A few of the countries’ laws describe communal ownership, but it is mainly in legal rhetoric and not in reality.

The Human Development Index (HDI) for every country was found in order to conduct a quantitative analysis including correlation, t-test comparing of the means, and regression analysis of ownership and the HDI. The attempt to find statistical significance using six categories of ownership as the independent variables and HDI as the dependent variable was unsuccessful, Therefore, categories were combined in order to have larger samples to work with. For the comparison of the means test, other factors were not held constant, so additional analysis was required in order to disaggregate the impact of ownership from other factors. This was the purpose of chapter 5, which was a statistical analysis of decentralised mineral ownership with many other independent variables included.

2.3.3 Statistical Analysis of ownership laws and HDI

In chapter 5, multiple regression analysis was used to determine the impact of ownership at the national level accounting for other factors. Most of the past studies on the resource curse performed multiple regression analysis using the GDP growth rate as the dependent variable. GDP by itself is a poor indicator of social outcomes, as stated by the originator of GDP, Simon Kuznets himself (Costanza, 2009, p. 4). Instead, the UN HDI which includes GDP was used. In order to evaluate the impact of the mineral ownership regimes on development, controlling for the effect of other independent variables is necessary. Some of the other independent variables that were used in regression design are found in the 1999 paper by Sachs and Werner entitled, “The Big Push, Natural Resource Booms, and Growth.” These factors include openness to trade, landlocked, life expectancy, central government savings, the

19 tropics, institutional quality, natural resource exports/GDP, mineral exports/GDP, Standard deviation of Terms of Trade, and manufacturing export share (J. D. Sachs & Warner, 1999, pp. 64-67). Many of these factors of analysis were evaluated.

Based on the literature, other factors were identified that might bear on development, but would not conflict with the factors of the dependent variable HDI. Other factors used in the analysis were Income group, region, corruption perception index, democracy scale, gender gap, population, fuel exports as percentage of total exports, ore exports as percentage of total exports, total resource exports as percentage of total exports, resource rent as percentage of GDP, resource revenues as percentage of govt. revenue, Extractive Industries Transparency Initiative (EITI) status and year joined. In addition, six World Bank governance factors were used including: Voice and Accountability, Political Stability/No Violence, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. These came from a World Bank Document entitled The Contribution of the Mining Sector to Socioeconomic and Human Development (McMahon & Moreira, 2014).

Communal ownership is essentially non-existent at the national level. Therefore, the attempt to determine the impact of communal ownership on development outcomes at the national level was unsuccessful. However, combining ownership categories into centralised and decentralised categories, provided evidence for research question B about what type of ownership provides the best outcomes. Using decentralised ownership as an instrumental variable in the analysis specified the impact of decentralised ownership accounting for other factors. This is a significant contribution to the literature on subsidiarity, devolution, and decentralisation of ownership as important factors in development theory.

2.3.4 Field work: Survey questionnaire, oral history, interviews

Chapter 6 describes the month-long fieldwork conducted in the Royal Bafokeng Nation in the Northwest region of South Africa. The Royal Bafokeng Nation is an example of communal mineral title since they have communal ownership of most of their lands including minerals. Their land is located on a portion of the “Bushveld Complex” which contains 80% of the world’s platinum. Methods used included a survey of 493

20 residents, review of literature, direct observation, interviews, oral history, and informal focus groups, ethnography, plus a simple linear regression to determine the relative importance of three quantifiable factors. The following is a detailed explanation of the fieldwork conducted in the Bafokeng community.

Table 2-2: Field Work Timeline Ethics Review May 2017-January 2018 Communicate with Gatekeepers November 2017-January 2018 Health and Safety Review January 2018 Meet with RBA Research committee 4-8 February, 2018 Submit ethics review to RBA research committee 7 February, 2018 Conduct literature review and oral history 12-15 February, 2018 Conduct interviews with local officials 12-18 February Receive approval from RB Supreme Council 14 February, 2018 Hire chief Surveyor/Interlocutor and staff 14-15 February Conduct Surveys 18-22 February Compile data 26 February-May 2018 Foreign leave June-Sept. 2018 Write and submit journal article Oct-Nov. 2018 Journal Article Published June, 2019

The assistance of gatekeepers was essential to the success of this research. Advisor Kathryn Sturman, from South Africa, was familiar with this community and recommended the case study. Primary advisor Saleem Ali contacted Dr. Susan Cook at Harvard who was a professional colleague. Dr. Cook had previously served as research director for the Royal Bafokeng Nation. She contacted Dr. Elmie Castleman who is the Chief Operating Officer of the Royal Bafokeng Administration (RBA). Dr. Castleman provided office space and coordinated logistics during my visit to Phokeng, Northwest State, Republic of South Africa where the RBA offices are located. After submitting a second ethics application for the conduct of human research to the Bafokeng, I received approval from their research committee. The Supreme Council granted the final approval, and an approval document was signed, granting permission to conduct research in the community, and providing credibility when conducting

21 questionnaires in the community. Supreme Council approval document is found in the Appendix and Supplementary materials. During the approval process and subsequent surveys in the community, I conducted numerous interviews with local officials to gather further understanding and documentation about mining laws, history, and revenue of the Bafokeng.

Table 2-3: Interviews Conducted with local officials Name Title Dr. Susan Cook Director of African Studies, Harvard University (for prior 10 years head of Bafokeng Research department) Dr. Elmie Castleman Chief Operating Officer (COO), Royal Bafokeng Administration Martin Bekker Director, Bafokeng Research Department Ian Venter Manager: Royal Bafokeng Enterprise Development (RBED) Ernie Kemm Town Planner: Bafokeng Anonymous Bafokeng Legal Department (oral history) Anonymous Bafokeng Councillor (oral history) Anonymous Councillors and headmen from Potsaneng, Thekwane, Mfidike (focus group) Tommy Mtande Headman (Khosana) Robega Village David VanWyk Lead Researcher, Benchmarks Foundation

The success or failure of communal ownership of minerals in this case was evaluated both objectively through review of literature and community development measures as well as by surveying local people to determine their perception of benefits received. The first method used in this case study was historiography of the local community. It was important to understand the evolution and history of property rights in South Africa as well as in the Bafokeng region since this topic has been fraught with conflict. This is especially the case since black Africans were denied the right to hold land titles for many decades under the Afrikaaners. After passing the ethics review, gatekeepers were contacted which allowed research to be conducted in their community. Permission from the Bafokeng Supreme Council is found in the appendix. A detailed review of available documents about community development conducted by the

Bafokeng administration provided some objective measures of investment of the community, which currently amounts to R600 million (Rand) US$50 million per year. During this research, two senior members of the Royal Bafokeng Administration provided a nearly 40-page oral history of mineral ownership in the community.

After obtaining permission to survey the community, a questionnaire was submitted orally or in writing (their choice) to 493 members of the local community asking their understanding of mineral ownership in the community, their perceptions about whether they benefit from development spending of the Royal Bafokeng Administration (RBA), and their preferences for local investment. One month was spent in the Bafokeng community, and extensive interaction with the people there gained some ethnographic knowledge. As an example, in each community where surveys were conducted, there was extensive interaction with groups of people at car washes, schools, businesses, community centres and health centres. People often volunteered their opinions about local issues, so these conversations became informal focus groups, which provided greater understanding of the community, particularly with regard to the impact of the mines, severe lack of employment, impact of economic migrants, and the peoples’ attitudes about Bafokeng governance. During a meeting with community leaders in Potsaneng, additional oral history of the struggle for property and mineral rights was provided. These insights are included in the analysis. In order to acquire and integrate additional cultural knowledge, engagement in conversations took place every morning with the guesthouse manager, at barbecue (“braai”) and beer during evenings, and with survey staff on weekends. A meeting was arranged in Johannesburg with the Benchmarks Foundation for the headman of Robega Village, his municipal staff and colleagues. Traveling there and attending the meeting provided additional insight.

Survey Methodology Fieldwork was conducted between 1 - 28 February, 2018 in 25 of 29 villages and 124 clans in the 1400 square kilometre Bafokeng Region near Rustenburg in South Africa. The objective of the fieldwork was to collect primary data by way of face-to-face interviews with members of the community. The first objective was to determine their understanding of mineral ownership in their community and South Africa in general. The second objective was to solicit their opinions of benefits received to help answer the research question as to whether communal ownership of minerals is beneficial to

23 development. The third objective was to determine their preferences for development spending and compare it to the priorities of the administration. One of the premier researchers in this community, Susan Cook of Harvard University, asked the question in a journal article entitled “The Business of Being Bafokeng,” about how to determine the benefits received by the community (Susan E. Cook, 2011). This survey attempts to answer this question by asking residents directly.

Since the primary language of the local people is Setswana, it was important to hire interlocutors who could translate and explain the survey if necessary. Lebogang Moeketse served as the supervisor for a staff of five other surveyors who administered the questionnaires. The other surveyors were Tiisetso Rantho, Andile Segidi, Kamogelo Rangwaga, and two women, Neo and Karabo. This allowed coverage of most of the territory and ability to obtain surveys from most of the villages. Each surveyor administered the questionnaire in his or her local area, which overcame much resistance to participation. This way, a foreigner was not conducting the surveys, but a local person instead. Each surveyer carried a copy of the permission from the Supreme Council, which provided approval for the project. Due to the severe lack of employment, they were grateful for the work, and were given lunch in addition to payment for each survey they conducted. Local officials were also cooperative due to work given to members of their community. In this manner, 493 surveys were obtained in one week. The disadvantage was that many people were resentful of the administration, and by operating with its official approval, some people did not want to cooperate.

Format of questions:  Demographic information  Survey about Ownership  Survey about Benefits  Survey about Budget Priorities  Additional Comments

Survey rationale Demographic information was crucial to understand the population to provide important background to understand answers in the survey. With a local reported unemployment rate of 56%, it was understandable that employment was stated as one of the primary, if not the main concern. Occupations were generally reported as unskilled, although many of the Bafokeng are educated, which added to their sense of frustration. Village and clan information was important to ensure data from a wide cross section of the area, which was successful. This turned out to be crucial since dissatisfaction was proportional to distance from the main city of Phokeng, where most of the community investments were made. Age, gender, and marital status also ensured a wide cross section of the population. The question about Mafokeng refers to whether people surveyed were members of the Bafokeng community (Mafokeng) since there are also residents from outside the area, or those who do not identify with the community. Response to the survey by 86% Mafokeng accomplished the goal of surveying primarily members of the Bafokeng community.

The ownership questions were intended to determine the level of knowledge of the Bafokeng about their ownership of platinum on their lands. Understanding ownership is the first step in obtaining rights due to the confused and conflicting ownership rights to land and minerals over the last century.

The Royal Bafokeng Community Development Trust (RBNDT) is the sole shareholder of Royal Bafokeng Holdings and, thereby, distributes the entire revenue of this R40 billion sovereign wealth fund annually for community development in the Bafokeng region. A block diagram showing the generic flow of revenue is shown below.

Figure 2-3: Flow of Platinum Money

Mining Platinum Group Corporations Royal Bafokeng Metals (Anglo-American, Holdings/RBNDT Lonmin, RBPlat)

Beneficiaries: R600 Annual Bafokeng Community Citizens Investment

The benefits questions were intended to ascertain if the Bafokeng people feel they are benefitting from the R600 million community investment made by the Royal Bafokeng Development Trust annually as administered by the Royal Bafokeng Administration (RBA), and if not, why? This was a measure of the effectiveness of local investment and local governance.

The budget question was intended to determine if the budget priorities of the citizenry differ markedly from the administration, and they did. The additional comments question allowed the acquisition of qualitative information not contained in the direct questions. This turned out to provide valuable qualitative feedback that added greatly to the knowledge provided by the survey.

After collection of the surveys, the information had to be compiled. It was not possible to capture every answer in the results because similar categories were combined together to make analysis feasible. Raw data has substantial additional material that could be mined for future research if made available.

Justification of Sample Selection and Data Collection methods, and Verification of Data In the course of the study, 493 surveys were completed with members of 124 clans, from 24 out of 29 villages in the Bafokeng territory. For the population of 128,000 people this sample size provides a 95% confidence interval with +-5% margin of error. The responses from residents of 24 villages comprised 83% of the total villages in the Bafokeng territory ensuring a widespread sample of opinions.

Data collection was done by local interlocutors/surveyors, who were fluent in the local Setswana language. Although most residents also spoke English, Setswana is their first language. Having local translators administer the surveys ensured accurate translation of any confusing information and ability to respond to questions about the survey in their local language. The area of weakness in the survey information was in the demographic information about employment. Because the surveys were conducted mostly on weekdays, there was a higher percentage of unemployed people surveyed. This may have skewed the responses toward residents who were dissatisfied with local benefits. However, comparison with the local census information found in the Population and Land Use Audit found that unemployment figures by census were only slightly lower than the survey data, confirming that our figures were accurate. An attempt was made to mitigate this weakness by conducting additional surveys after business hours at a local pub, and on weekends in order to increase the number of employed person responding to the survey. Also, the regression analysis conducted took into account employment as an independent variable. It described the relationship between employment and satisfaction with benefits received, thereby accounting for any lack of data from employed persons. Results of the survey were also compared with previous research such as done by Cook and Mnwana, and was found to be in agreement (S. E. Cook, 2013; Mnwana, 2014).

A detailed oral history was obtained from the Royal Bafokeng Administration staff, which was recorded and transcribed, providing great detail. Other members of the community including traditional and hereditary leadership were also interviewed. History was also obtained from the literature to verify and confirm the agreement of oral and written histories. Written and oral history were largely in agreement, confirming the research materials.

2.3.5 Ethnography

Methods for ethnographic research are found in (Fife, 2005; Gray, 2003; Hautzinger, 2012; Owton & Allen-Collinson, 2014; Schensul, Schensul, & LeCompte, 2013). According to Murchison, “Unlike many other scientific research strategies, the ethnographer is not typically a detached or uninvolved observer. The ethnographer collects data and gains insight through firsthand involvement with research subjects or informants” (Murchison & Ebooks, 2010). The following is a five component framework for conducting culturally competent ethnographic research: valuing diversity, conducting cultural self-assessment, managing the dynamics of difference, acquiring and integrating cultural knowledge, and adapting to diversity and cultural contexts (M. Y. Lee & Zaharlick, 2013).

During research in the Bafokeng community in South Africa, every day for a month was spent with members of the administration and the community. The first two weeks was spent with the administration in their offices in Phokeng. During that time familiarity was gained with the administration and their management of the community’s business. Numerous members of the administration were interviewed, research plans were submitted to the administration and Supreme Council, and permission was obtained to conduct research in the villages of the Bafokeng Nation. An oral history of platinum mining from members of the administration was recorded and transcribed. The second two weeks was spent with the survey staff who were members of various villages within the community. At the end of each day the author and survey staff socialized at a local outdoor barbecue pub and music spot, interacting with employees and other members of the community. Significant time was also spent with the Headman of one of the villages in the community during a joint visit to Johannesburg. In addition, there was interaction with the local Bafokeng owner and staff at the guest house every day where the author resided in Rustenburg. Therefore, all of the criteria mentioned above was fulfilled for the conduct of ethnographic research. This cultural immersion provided qualitative insights into the community which was integrated into survey research results.

2.3.6 Summary

By using a wide variety of qualitative and quantitative methods, a robust analysis of communal and decentralised mineral ownership was accomplished. Historiography provides the context for the legal and empirical history of communal ownership, which is prominent in supra-national and indigenous jurisdictions. It explains the lack of communal title at the national level due to historical reasons of feudalism and the nation-state which followed it. The legal precedent for communal property originates in the Institutes of Justinian which is widely accepted as the origin of Western law. Statistical analysis using the HDI as the dependent variable allowed the disaggregation of decentralised ownership from other development factors. Comparison of the means t-test, simple regression, and multiple regression with instrumental analysis accomplished this goal. The case study of the Bafokeng Nation provided a real-world example to study the benefits of communal mineral ownership for an African community of 128,000 people. The combination of these methods provides a robust and original contribution to knowledge about the impact of mineral ownership on development. The following chapter is a survey of current literature on topics relevant to this thesis.

3 Chapter Three: Literature Review and Conceptual Framework This thesis includes several elements that are present in the literature: the resource curse, mineral ownership, decentralisation, and natural resources as common property. The following literature review summarizes previous research relating mineral ownership to development outcomes and the resource curse followed by the relationship between decentralisation and development, property rights, and development of the commons.

The Resource Curse Extensive literature and discussion have taken place with regard to the resource curse first identified by J. D. Sachs, Warner (1995). It was defined as reduced growth in GDP in countries that obtained a large amount of their revenues from resource exports. Many resource rich countries such as Nigeria, Myanmar, and Democratic Republic of Congo suffer from underdevelopment, while many resource poor countries such as Singapore, Japan, or Monaco are highly developed. Many explanations are offered for the resource curse including macroeconomic mechanisms and governance causes. The market explanation includes the “Dutch disease,” which is when resource exports drive up the value of domestic currency, thereby reducing the value of the non- mineral economy. Other market explanations include over-expanding the public sector, non-reinvestment of natural resource rents, and volatility of resource prices. When there is poor governance, government officials or entrepreneurs are able to monopolize resource rents for themselves.

Todd Moss (2011) summarized research on the resource curse identifying the following issues correlated with resource rich countries:  Macroeconomic instability and export concentration.  Poverty  Corruption  Authoritarianism  Conflict Moss points out that the basis of the social contract between citizens and the state is taxation. He claims that without taxation, the citizenry is unable to demand accountability from the government, and corruption results. In addition, states which

30 rely on natural resource revenue rather than taxation have less public investment and less efficient public spending (Moss, 2011). Ross (2012) defines the “rentier state” as one with independent source of revenue, such as resource rent, foreign aid, rent for use of military bases, etc. that is not accountable to taxpayers.

Ivar Kolstad and Wiig (2009) summarized three types of resource curse explanations, Dutch disease and two political economy (PE) explanations: centralised and decentralised. They explain the centralised PE model is based on rent seeking through patronage, and the decentralised model is due to rent seeking by entrepreneurs. In either case, they claim that resource rents create dysfunctional behaviour (patronage or rent-seeking) due to bad institutions of governance, which causes economic inefficiency (Kolstad & Wiig, 2009). A recent survey of the resource curse literature states ways that resource dependence can reduce growth have been demonstrated empirically. Also, some researchers claim it is not resource abundance that is the problem, but dependence of the economy on a small number of resources (Badeeb, Lean, & Clark, 2017).

Roland Hodler develops a model to explain the resource curse according to homogeneity or fractionalisation of societies. He uses ethnic, linguistic, and religious fractionalisation in his statistical model to evaluate outcomes on that basis. He also provides correlations with per capita incomes and property rights. He predicts that resource windfalls in fractionalised countries will result in infighting and rent seeking. As examples of his model, he finds that Nigeria, with an ethnic fractionalisation index of .85, has poor outcomes, while Norway, with fractionalisation of only .06, has effective property rights and high per capita income (Hodler, 2006).

This author considers GDP to be a very limited indicator of human wellbeing, and the UN HDI to be a much better indicator of human wellbeing because it includes educational and health indicators within it. There are some studies of resources in relation to the HDI such as Pineda and Rodriguez, for example, who claim that natural resources are beneficial for human development, due to their positive effect on non- income components of human development such as education and health (Pineda & Rodríguez, 2010). Ownership has been studied very little with respect to minerals

31 because most researchers assume minerals are owned by the state. Justice and fairness would demand that benefits from common property resources be distributed to the public who inherently own them (by Locke’s Proviso and others). Therefore, the topic of communal ownership is important to consider.

Resource Ownership Weinthal and Luong (2006) contend that ownership is largely ignored in the literature due to the assumption that minerals are mainly state owned. They point out that countries rich in minerals often have poor governance and high corruption, lower social welfare indicators, and high levels of authoritarianism. Most of the solutions are premised on revenues going to a central state, many of which do not have the institutional capacity to implement needed reforms. They particularly note the irony of recommending reforms requiring good governance in countries lacking it. Instead, they recommend an entirely different approach of domestic private ownership of mineral wealth to bypass the corruption of states (Weinthal & Luong, 2006). This is a different hypothesis than the option of communal ownership explored in this thesis, but both provide an alternative to the assumption of state ownership.

Anthony Venables (2016) also notes the need for good governance in resource rich countries where it is sorely lacking. He makes the explicit assumption of state ownership of minerals by stating, “Subsoil assets are property of the state in almost all countries except the United States.” It is true that state ownership predominates, but there are many other mineral ownership regimes worldwide. J. Otto (2015) defines the following categories: Ownership by the State, Ownership by the People, Ownership by the Ruler or nominally with the Crown, Ownership by the Landowner, Ownership by the Concession/Claim/Licence Holder, or Ownership is not defined by law. Flomenhoft (2018) identifies six different types of mineral titles in law, which are similar to Otto’s categories, and will be explored.

Tim Wegenast (2016) also notes the lack of research on ownership. “One important explanatory variable, however, has been largely ignored by the present quantitative literature: resource ownership.” He finds that state owned oil and gas production can increase the level of internal violence, while production by private companies has no impact. This is true for intermediate levels of production, while at high levels revenue

32 windfalls can allow states to essentially bribe or repress the population to keep them peaceful (Wegenast, 2016). Wegenast and Schneider (2017) investigate the impact of ownership on violence and state repression in sub-Sahara Africa. They investigate the relationship between violence and public, private, domestic or internationally controlled resource ownership. They contend that when international mining companies control resources, government violence against civilians increases. This is especially the case if property rights are not secure.

Leif Wenar (2008) demonstrates that ownership is important due to tyrants taking control of resources and not sharing it with citizens who by rights own them. He shows that resources correlate with authoritarianism, civil war and coup attempts, and lower rates of economic growth. He claims it is foreign money flowing into tyrants’ bank accounts through purchase of resources that fuels the problem (Wenar, 2008). Wenar contends that ownership of minerals by the people of each country is widely understood and embedded in international law, the UN declaration of human rights, and many national laws. Therefore, selling or disposing of minerals by petro-tyrants without the consent of the public amounts to selling stolen property, and he holds the purchasers accountable (Wenar, 2008). Luong and Weinthal (2006) analyse the impact of four different ownership structures on development which are: State ownership with control, State ownership without control, Private domestic ownership, Private foreign ownership. They contend that better governance including transparency, accountability, and oversight are mainly lacking in the developing world, so in order to overcome weak institutions they propose private domestic control. Joel Brätland (2012) evaluates private domestic control and finds it has shortcomings. He evaluates management of minerals when they are privately owned due to implementation of the “ad coelum”2 doctrine derived from Blackstone that gives the surface owner rights to sub-surface minerals. He claims this results in inefficiencies since the private surface landowner hampers the decision-making of the extractive enterprise in their use of capital. Therefore, he theorises that a “neo-Lockean” solution

2 Ad Coelum = Cuius est solum, eius est usque ad coelum et ad infernos (Whoever's is the soil, it is theirs all the way to Heaven and all the way to Hell)

33 would be better, where mineral ownership rights are given to the enterprise which discovers and develops resources (Brätland, 2012).

Resources and Human Development Most of the quantitative studies on the resource curse in the past used statistical analysis with the GDP growth rate as the dependent variable. GDP by itself is a poor indicator of social outcomes, as stated by the originator of GDP Simon Kuznets (Costanza, 2009, p. 4). Instead, this thesis uses the human development index (HDI), which is a quantitative quality-of-life indicator that includes GDP, but also includes education and health outcomes.

Some studies on the relationship between natural resource dependence and the human development index have been done. Jose Pineda and Rodríguez (2010), for example, claim that natural resources are beneficial for human development, due to their positive effect on non-income components of human development such as education and health. Ruben Dias, Mattos, and P. Balestieri (2006) show that energy consumption and HDI are directly correlated although there are outliers such as Costa Rica with low energy consumption per capita and high HDI. Natália Hlavová (2017) studied the impact of natural resources on the HDI in sub-Saharan Africa and finds that high resource dependent countries have a positive correlation with HDI and low resource dependent countries have a negative correlation. However, in neither case is the natural resource factor significant, affecting a maximum of 4% of the outcome (Hlavová, 2017). Richard Dwumfour, Agbloyor, and Abor (2017), contend that minerals have no impact on welfare in their models using remittances, financial development, and natural resources as independent variables. Yue Huang, Fang, Zhang, and Liu (2014) found, in a study of 30 Chinese provinces, that natural resource dependency as measured by percentage of workforce in mining had a short term positive effect on HDI, but had an overall negative effect from 2000-2011. These studies all focus on resource abundance, which is not the topic of analysis here, which is focussed on resource ownership and development.

Resource Nationalism Paasha Mahdavi (2014) contends that governments nationalize the oil industry when they perceive “unfairness” in the relative share of oil profits going to their own country compared to the countries where the oil companies reside. This only relates to the operations of the oil industry itself rather than who is the titleholder of the minerals. Foreign oil companies are often in control of oil or minerals belonging to other countries, such British Anglo-Iranian Oil company control of Iranian oil prior to the election of Mohammed Mossadegh in 1951, the subsequent oil nationalization, and again after the US/UK coup in 1953 (Risen, 2000). In the second cycle of resource nationalism, and due to social movements, Bolivia renationalized its resource sector in 2005. However, they did so by gaining only 51% ownership of hydrocarbon companies. This still allowed private investment to expand and the economy to grow, which created government revenue spent on social program by new President Evo Morales. In 2010, Indonesia also required foreign mining companies to transfer at least 51% of the shares to Indonesian nationals after 10 years of operation. In 2014 they went further and required domestic value-added industries rather than just exporting raw materials. Authors claim the latest cycle of resource nationalism is a response to US neoliberalisation and hegemony, while China is providing exporters with new alternatives (Kaup & Gellert, 2017).

Resource Decentralisation/Subsidiarity Javier Arellano-Yanguas (2011) states that consensus has developed over the last several decades that the resource curse results in negative effects such as authoritarianism, militarisation, regional secessionism, and socioeconomic inequality. In response, a consensus has developed around “localist” policies for redistribution of revenues to sub-national governments, participation of local citizens in spending decisions, and for mining stakeholders to be involved in these local decisions (Arellano-Yanguas, 2011). A related concept is subsidiarity. According to J. P. Williams (2008), in 2000, the Mining, Minerals and Sustainable Development ("MMSD") Project advocated subsidiarity as a best practice, including “decentralizing decision-making to the point as close to the impact as possible should be the norm.” Political subsidiarity is explained as being distinct from an older form, Catholic subsidiarity, because it refers to the decentralisation of power in the public sector,

35 while Catholic subsidiarity refers to distinctions between private and public sectors, and mainly refers to volunteerism. Barber contrasts subsidiarity with liberal nationalism: subsidiarity assumes that sub-national regions have rights to decisions over issues which affect them, whereas nationalists assume all power belongs to the centralised state (Barber, 2005).

Anne Larson and Ribot (2004) summarize many studies of natural resource decentralisation claiming it is a global movement. Justifications for decentralisation include:  better efficiency  equity and inclusion leading to improved management  democratisation and people’s participation  rural development  public service performance  poverty alleviation  relief of fiscal crisis  macroeconomic stability  national unity and state building  helping to increase the legitimacy of government According to Giorgio Brosio (2003), many countries have revenue sharing with sub- national governments including Argentina, Australia, Bolivia, Brazil, Canada, Colombia, Indonesia, Italy, Malaysia, Nigeria, Papua New Guinea, Peru, Philippines, Russia, and the United States. He provides a fascinating comparison of two principles of distributive justice, Rawls and Nozick. He points out that when oil deposits are known about, but not the actual regional distribution, then Rawls “veil of ignorance” is applied and property rights are assigned to the central government which protects the rights of all regions to a share of revenue. On the other hand, when the “veil of ignorance” is removed due to exploration, sub-national regions assert their claims to the resource as their rightful property, which Brosio compares to Nozick’s criteria of justice. Therefore, he contends that the actual distribution of revenue shared depends on the bargaining power of different levels of government. Brosio (2003) argues that revenue sharing is the most effective approach due to difficulties of administration and the need to keep energy policy at the central government level.

Anthony Bebbington (2014) identifies two sources of tension between localities where extraction takes place and central governments who usually manage it. The first is the distribution of rents, and the second is the impact of externalities in the “light or “dirty” form. The light form involves changes in the landscape including large-scale industrial installations, as well as machinery, noise pollution, and the possibility of tailings dam, waste-water or pipeline leaks. The ‘dirty’ form of extraction results in water pollution, waste rock, and tailings leaching as well as social impacts such as disease and prostitution. In either case, there can be severe economic impacts such as increase in the cost of land and housing, higher labour costs, and greater opportunities for crime. These are among the factors that drive extraction regions to greater demands from central government authorities for compensation in the form of revenue sharing (Bebbington, 2014). Boris Verbrugge (2015) identifies the potential of decentralisation to transfer mineral wealth to a large portion of the population, especially the local labour force. However, he identifies several areas of conflict that complicate the potential benefits. These impediments include conflicts between central and local authorities over large scale mining projects, conflict between large and small-scale mining such as artisanal mining, and conflicts with indigenous rights over resources (Verbrugge, 2015).

Mohammad Farzanegan, Lessmann, and Markwardt (2018) examined 91 countries and found that natural resources, especially oil, are some of the major causes of civil wars and conflicts. They found that political decentralisation reduces the likelihood that resource rents will lead to conflict, controlling for other factors (Farzanegan et al., 2018). Perez-Sebastian and Raveh (2016) claim the opposite, that fiscal decentralisation results in worse outcomes, using the example of Venezuela and Botswana from 1970-1990. Venezuela, which is highly decentralised fiscally, had negative economic growth, while Botswana had a high growth rate. “Resource windfalls may incentivize rent-seeking behavior of local, fiscally autonomous, governments—the political channel. In addition, natural riches can lead less agglomerated and efficient regions to cut taxes and attract capital from more productive areas—the market mechanism. These two channels can contribute to drop total output in the nation, following a natural resource boom” (Perez-Sebastian & Raveh, 2016). Governance seems to be key in decentralisation of revenue.

Methods of Decentralisation Eric Mottu and Ahmad (2002) describe three different management systems for distributing oil revenues: Centralization, assigning revenues to sub-national jurisdictions, and sharing revenues with resource producing regions. They advocate centralization of oil revenues, but which assign some control over tax rates to sub- national levels and some transfers to provide stable levels of financing (Mottu & Ahmad, 2002). Otto summarizes the use of taxes for decentralisation of revenues which allows different level of government to collect different taxes. Fiscal decentralisation is justified in order to provide revenue to mitigate local environmental and social impacts in the framework of sustainable development (James M Otto, 2001). Ross et al. (2012) explore horizontal inequality, which they define as inequality associated with “ethnic, religious or other divisions between groups”. They list nine cases of secession that were driven by the presence of resource wealth in each region and list three methods of decentralizing revenue from resources (Ross et al., 2012): 1. They may levy taxes directly on the resource industry. 2. They may receive a direct transfer from the central government that is a defined share of the revenues originating in the region. Each oil-producing state in Nigeria, for example, receives 13 percent of the oil revenues generated in that region. 3. They may receive indirect transfers—through the national budgeting process— that reflect preferential treatment for producing regions. Due to its greater management capability, they advocate that central governments collect and distribute resource revenue, but they recognize that in order to reduce secessionist pressure, they may have to grant subnational governments the ability to tax resources, in order to transfer a just share of revenues to them. All of these methods involve decentralisation of revenue, but do not specify decentralisation of ownership.

Post Conflict Decentralisation Several authors investigate the impact of wealth sharing to mitigate post conflict situations including Helga Binningsbø and Rustad (2012) and (Ross et al., 2012). Binningsbø and Rustad (2012) divide wealth sharing into the following categories:

1. wealth redistribution: specific provisions designed to distribute natural resource revenues across a post-conflict society 2. resource power allocation: guaranteeing rebel groups resource control in government 3. land reform: nation-wide rearrangements of land ownership Based on their results, “wealth sharing is more likely after natural resource conflicts and when the opposition wins the conflict, but less likely in autocratic societies” (Binningsbø & Rustad, 2012). Their findings are that post-conflict wealth sharing, most often introduced after natural resource conflicts, does not increase peaceful results. There are some successful cases however. They point to enduring peace in two countries, El Salvador and Guatemala, which they attribute to land reform (Binningsbø & Rustad, 2012).

Sierra Leone In 2001, the Diamond Area Community Development Fund (DACDF) was established in Sierra Leone to encourage peace and development in the post-conflict zone. 0.75 per cent of total diamond-export value is returned to diamond mining areas for community development. This money was first granted to chiefs, but more recently through district councils and Chiefdom Development Committees (CDCs). US$75,000 was also invested in five local mining cooperatives. The coops were a complete failure, while the DACDF program had some gains, but benefits were mostly captured by elite interests at the expense of the public (Zulu & Wilson, 2012).

Peru From 2004-2009 a significant amount of resource revenue in Peru was distributed to sub-national governments, especially in mining regions. The increase in conflicts in mining areas was proportional to the increase in revenue allocated locally from 47 conflicts in February 2004 to 197 in December 2008, while distributed revenue increased by a factor of 13 due to the mining boom. Several different sources of conflict were due to increased revenue distribution:  conflict between local communities and mining companies over perceptions of unfair distribution of profits

 conflict between local population and local authorities regarding the inability of the latter to use revenue transfers efficiently  conflict between different levels of government  conflict between subnational governments at the same hierarchical levels fight over their territorial boundaries  New labour conflicts due to unskilled public jobs paying high salaries The overall conclusion is that this policy has been a failure due to resulting local political conflict (Arellano-Yanguas, 2011).

Kenya Devolution of political, fiscal and administrative power to 47 counties was introduced in the 2010 constitution in Kenya. Agnes Cornell and D'Arcy (2016) analyse the results in terms of the public expectation that it will now be “our turn to eat.” What they find is that rent-seeking and ethnic patronage present at the national level is simply transferred downward to the county level (Cornell & D'Arcy, 2016). Another finding is that “Devolved units of government lack capacity” (Khamadi, 2014). Kathryn Sturman, et al, caution about applying devolution of resource revenues in Kenya to outlying, rural government areas with weak governance. Their concern is how to share revenue in a way that encourages development and avoids conflict (Sturman, Laichena, Wongombe, & Kisiangani, 2019).

South Africa Roy Bahl (2001) evaluates characteristics that define whether South Africa is a good candidate for fiscal decentralisation. He states that decentralised revenue structures more often appear in countries with the following characteristics (Bahl, 2001):  Greater land areas and larger populations  Higher level of economic development  More equal regional distribution of income  More heterogeneous populations  More stable macroeconomic and political conditions

Royal Bafokeng Nation (South Africa)

Through acquiring title to their communal lands, the 130,000 Bafokeng people were able to acquire rights to minerals located on their lands and, therefore, access to revenues from platinum mining. This has given them a substantial amount of revenue that they are able to use for community development. In 2011, the Bafokeng Administration spent US$100 million on education, public and community utilities, health and social services, public safety, and commercial and community sports. Individual benefits include support for university students and school lunches. It has argued successfully with the national government to maintain its tax exempt status as many of its services replace those that should be provided by the state, and therefore reduces the cost to the state (S. E. Cook, 2013). The Bafokeng Land Buyers Group on the other hand insists that its land rights have been ignored and usurped by the chief. They claim that their ancestors registered their land deeds on their own independent of the Bafokeng Chieftancy, and they have land rights to platinum bearings lands independent of the chief. Therefore, they claim that decentralisation has not taken place due to elite capture of mineral rent (Bafokeng Land Buyers' Association, 2018). This topic will be explored further in the case study in chapter 6.

Philippines Verbrugge (2015) warns against overoptimistic expectations resulting from decentralisation of mineral wealth. In the Philippines the results are ambiguous due to:  Intra-government conflicts over fiscal-regulatory authority in the mining sector  Conflicts between large-scale mining companies and small-scale mining over access to mineral-yielding land  Conflicts between tribal groups seeking to secure ancestral domain rights and associated mining royalties under the Indigenous People’s Rights Act. He concludes that decentralisation of resource wealth may in fact benefit local communities, but simultaneously is increasing conflict, sometimes leading to violence, as local politicians and government units compete for mineral resources. The labor force is the ultimate loser as they are deprived of access to minerals (Verbrugge, 2015).

Indigenous Rights/Devolution Heather Northcott (2012) asserts that indigenous communities should have sovereignty and self-determination over their resources as a matter of human rights and international law. She gives the example of the 1993 Nunavut Land Claims Agreement Act in Canada as providing the Inuit with sovereignty over the cultural, political and social dimensions of their communities. She also points to the cross- border sovereignty asserted by the Sami people of the northern latitudes of Finland, Norway, Sweden and Russia, to demonstrate that national borders are not the only meaningful determinants of sovereignty (Northcott, 2012).

The concept of permanent sovereignty over natural resources is gradually being expanded to cover non-state actors and sub-state peoples such as indigenous communities. Self-determination is another international legal principle that applies to indigenous people. These two principles strengthen the legal basis for indigenous people to assert rights to land and resources under their jurisdiction (Pereira & Gough, 2013).

Yukon (Northern Canada) Several agreements devolved land and mineral rights to the territorial governments of Yukon in the north of Canada. The Umbrella Final Agreement (UFA) settled final land claims with 14 First Nations involving land ownership, compensation moneys, self- government, and joint management of a land and resources. Christopher Alcantara, Cameron, and Kennedy (2012) conducted interviews with sixteen officials of the Yukon government (Canada) after the Devolution Transfer Agreement (DTA), which became effective in 2003. With this agreement, the federal government ceded control over all territorial lands, surface, and subsurface resources such as forestry, minerals, and waters. They found that consistent with theory, devolution is beneficial due to improvements in government efficiency and responsiveness at the provincial level. All sixteen interviewees reported positive results of devolution. For example, after devolution, environmental and social assessments were completed ahead of schedule, and the Yukon mining industry grew at a rate of 10.5% between 2003 and 2008. This rate exceeded all other industries, and was one of only two Canadian territories or provinces to achieve positive GDP growth in 2010 (Alcantara et al., 2012).

Dividend/Cash Transfers A number of writers propose the ultimate form of decentralisation of revenues, which is citizens’ endowments or dividends. These include (Cummine, 2016; Gillies, 2010; Moss, 2011; Sandbu, 2006; Segal, 2011). According to Martin Sandbu, not only do poor institutions cause poor outcomes in countries with large resource rents available to government, but resource rents also have a deteriorating impact on the institutions themselves (Sandbu, 2006). He cites two authors who claim that resource rents are easy money that tend to corrupt government institutions (Sala-I-Martin & Subramanian, 2003). Sandbu claims that the converse is therefore true, that governments who depend on citizen taxation tend to be more accountable. This is also the contention of Ross, who defines the “rentier state” theory of government as one that is less accountable to the population due to revenues independent of taxation (Ross, 2012).

Sandbu (2006) proposes that 100% of resource rents be first distributed directly to the citizenry as “natural wealth accounts” (NWAs), which are then taxed back by government as needed for public revenue. He claims that this would educate the populace about the magnitude of the resource rents, and require accountability from government to justify the level of taxation. It is also based on the contention that minerals and their revenue are the property of citizens in the first place. He claims it is based on an “endowment” effect, which means that possession of something increases its recognized value to individuals. In other words, people would have an aversion to the loss of a NWA in taxes compared to the government taking it directly before it passes through their hands. Therefore, the public is likely to hold the government more accountable. He also claims that it creates an information effect which educates the populace about the magnitude of the resource rents, especially among a population that is low in numeracy. Another justification is the income effect. He claims that individuals may make better investment decisions than government, and it is, therefore, beneficial to leave some money in their hands rather than tax the NWAs at 100%. He claims there are also institutional consequences, such as providing better banking services in developing countries. There may also be poverty alleviation benefits by direct payments to individuals. Finally, there could be institutional advantages. In addition to holding government more accountable,

Sandbu also contends that this system could help resolve conflicts between different levels of government by allowing each level of government to levy taxes on the NWAs according to their needs (Sandbu, 2006).

Paul Segal (2011) also proposes that countries distribute resource rents directly to the populace, which he claims will reduce global poverty by fifty percent. He disputes that poverty reduction is dependent on growth, and claims that resource dividends would reduce the number of people living on less than a dollar a day by 27-66% (Segal, 2011). He uses the example of India, which he estimates had 455 million poor people, or 34% of the world total. He notes that despite per-capita income growth of 135% from 1981-2005, the number of poor people is still slightly higher than 1981 (Chen & Ravallion, 2008). His estimate of resource dividends would reduce poverty by 56% from 41.6% to 18.2%. In the case of China, with the second highest number of poor people, the resource dividend without tax would have reduced poverty in 2002-2006 from 16.2% to 1.1% (Segal, 2011).

Angela Cummine (2016) in her book “Citizen’s Wealth” recommends amending the Santiago Principles for Sovereign Wealth Funds to achieve citizen-ownership of sovereign wealth, and transforming “sovereign funds into community funds, funds run by the people, for the people.” She contends that according to the venerable principal- agent model of government, that the government and state hold the assets of the people as fiduciaries, with the people as principals, who are the ultimate owners of resources. She asserts that as the ultimate owners of sovereign wealth, citizens should exert direct control over the management of the fund by election of the board of directors through objective-setting in original documents, and monitoring of the accountability of representatives to the citizens’ original objectives (Cummine, 2016).

Alexandra Gillies (2010) addresses the concentration of power that accrues to government officials from resource rents, and points out how they often distribute resources in ways that serve to enhance their power, influence, and wealth. Therefore, they may oppose the concept of direct allocation of cash transfers to the populace since it reduces their power. She posits four scenarios where cash transfers might be favoured, and two factors that can influence the likelihood of these reforms. The favourable scenarios for cash transfers are:

 Clean slates (new political order or new revenue stream)  Political competition where the majority matters  To promote peace and unity  The “benevolent” leader Mitigating factors include the political autonomy of the leader and the size of the resource endowment (Gillies, 2010).

Moss points out that cash transfers are becoming very popular with 45 countries having them covering 110 million families. He advocates cash transfers as a solution to the resource curse, and provides the following justifications in agreement with Sandbu: The advantage of distributing resource revenue and then taxing it back, so “citizens will have increased leverage and incentives to exert pressure on public policy” (Moss, 2011). He suggests that cash transfers give incentives to keep government accountable. It is good for distribution of income to underserved areas in developing countries, and it provides direct benefit to the poor which public services may not provide. One of the major decisions about resource rents is the question of whether to spend it or save it. In countries lacking in public services, the pressure for governments to spend it and not use it for cash transfers may be very high. Another proposal working against cash transfers is the idea to create a savings fund (Sovereign Wealth Fund) or a stabilization fund (reserve fund in case of budget shortfalls). Many barriers exist to the implementation of a cash transfer system in developing countries such as the lack of verifiable identity of citizens and the lack of banks accounts. Electronic transfers have been used successfully in Kenya, Brazil, and South Africa to reduce administrative costs and to improve verification. Another concern is the impact of prices that might come about due to increased consumer demand, but Moss refutes this argument by pointing out that government spending of these funds would have the same impact (Moss, 2011).

Common Property Ownership One of the most famous legal documents in history is the Magna Carta and the lesser known Law of the Forest, both in 1215, which established rights to use of the commons of forests and fisheries which included wild game, firewood, building materials, medicinal herbs, and grazing for livestock. Public access to the commons prevailed

45 throughout the period of feudalism until the Enclosure Acts of the British Parliament from 1750-1860 which enclosed 21% of British land area (Sharman, 1989). Since the land enclosures in England, the overriding trend has been toward privatisation of land and resources as part of the process of mechanisation and urbanization that began with the industrial revolution.

The global reawakening of common property concepts may have been due to the Swedish Reichbank economic prize (in honour of Alfred Nobel) granted to Eleanor Ostrom in 2009. She spent her entire career investigating management of “common pool” resources in both undeveloped and developed countries. Her book Governing the Commons, (Ostrom 1990), revolutionary at the time, is now considered the standard text on the topic of common management of resources. In her work, Ostrom contradicted the prevailing understanding of Garret Hardin’s famous essay “Tragedy of the Commons,” that users of common resources will inevitably overuse the resource and deplete or destroy it (Hardin, 1968). Ostrom identified the flaw in Hardin’s thinking, the conflation of an open access regime that is an unregulated “free-for-all,” with a commons that is regulated and managed by a community. It is true that an unregulated open access regime may result in overuse and destruction of the resource, of which there are many examples. Unregulated fisheries often deplete fish to extinction such as the famous Pacific sardine fishery told in the story of Cannery Row, by John Steinbeck. In recent years, the Canadian Grand Banks cod fishery was also fished nearly to extinction (Myers, Hutchings, & Barrowman, 1996).

The problem of polluting the atmosphere with carbon dioxide and other greenhouse gasses is another open access problem which the world is attempting to manage by weak international governance mechanisms through the United Nations. There have been prior successful measures implemented to manage the global commons, such as the Montreal Protocol to regulate CFC emissions destroying stratospheric ozone and measures to limit use of DDT and lead in gasoline (Flomenhoft, 2015).

The Commons Sector A 2006 book by Peter Barnes entitled, Capitalism 3.0, advocated the establishment of a “commons sector” to complement the state and market sector. He makes the case

46 that the state or government sector has been largely captured by the market in the form of large multi-national corporations: Because our economic operating system is far out of balance. On one side, representing owners of capital, are powerful profit-maximizing corporations. On the other side, representing future generations, nonhuman species, and millions of humans with unmet needs, are—almost nothing. The system lacks institutions that preserve shared inheritances, charge corporations for degrading nature, or boost the “demanding” power of people whose basic needs are ignored (P. Barnes, 2006). Therefore, a countervailing force of a third sector is needed to represent the interests of the public because governments are failing to do so. He identifies three components of the commons sector: nature, community, and culture (P. Barnes, 2006). Minerals fall into the category of nature. By applying common ownership to minerals it is possible that the needs of people might be better met than prioritizing state and corporate ownership.

David Bollier in his book, Silent Theft (Bollier, 2002) documents the silent loss of common resources that need to be recovered including:  Government owned property  Natural Systems  User-managed regimes  Gift economies  Shared inherited knowledge  Cultural traditions and norms

The most well-known aspect of the commons is probably the internet, and the World Wide Web, which was created by Sir Tim Berners Lee as an open access project for everyone to use. Open access software and files are ubiquitous aspects of the internet commons, Wikipedia being a prominent example. Most people are familiar and comfortable with certain aspects of the commons, but unaware of others such as the common nature of minerals.

Summarizing the Gaps The issue of communal rights to minerals is much discussed in the literature regarding the unclaimed territories of Antarctica, the deep-sea bed, and outer space, in particular in light of the “common heritage of mankind” (CHM) principle. The government of Malta first proposed the CHM principle in 1967 regarding peaceful uses of the seabed and ocean floor, declaring both of them to be a common heritage of mankind and to be used for the benefit of poor nations (Scovazzi, 2007). This concept was partially adopted in the UN Convention of Law of the Sea (UNCLOS), and the International seabed authority (ISA). The Moon Agreement of 1984 more explicitly embodies the CHM principle, but has only limited adoption, while the Outer Space Treaty of 1967 only specifies space as the “province of all mankind” (Leach, 2014), but has almost universal acceptance. Attempts to apply the CHM principle to Antarctica have largely failed due to proprietary claims of several countries which have been temporarily suspended by agreement until 2048. Also, Antarctica is managed as a “condominium” mainly of countries which had established research there by the International Geophysical year of 1957-1958 (Larschan & Brennan, 1983).

Communal ownership is also central to the concept of native property rights globally. For example, in the Australian case of Geita Sebea v. Territory of Papua, ownership of the native lands was described as a “communal usufructuary occupation” (Blackburn, Milirrpum, Northern Territory. Supreme, & Nabalco, 1971). In the Canadian territory of Nunavut, native Inuit (First Peoples) land settlement, if subsurface rights are also owned, 100% of royalties belong to the tribe (Canada: Indigenous and Northern Affairs, 2018a). The Dogrib (Tlicho) people also negotiated a fee simple title (including minerals) self-government agreement. Native Americans also have communal mineral rights, but lands are held in trust by the US government.

However, in national domestic laws, there is scarcely any mention of communal rights to minerals in the literature, except to deny them to native people as Justice Lee did in the Ward case, and some commentary in the Bougainville example. The gap in the literature seems to be a lack of discussion or consideration of the concept of communal ownership in national or provincial/state mining laws. Communal title essentially vanished at the national or state level. There is very little discussion of the relationship between mineral ownership and the resource curse, or consideration of communal

48 mineral title as a possible mitigating factor. In the Bougainville case, according to Professor Ciaran O'Faircheallaigh, payment of mining royalties to an individual landowner who did not share the revenue with other communal owners, resulted in that person being the first person murdered in the civil war (O'Faircheallaigh, 2015). Communal ownership could be a crucial factor in the reduction of conflict, and is little discussed.

Conceptual Framework Figure 3-1: Research Process (Source: Jill Harris adapted from (Bryman, 2016))

Ontology and Epistemology The ontology behind this research is the Taoist concept of the unity of polar opposites. Yin and yang combine to form a greater unity. In this system, all dualities are false; each side has wisdom and simply hide a greater truth. Dualities are resolved in the larger whole. Regarding epistemology in western philosophy is the philosophy of Hegel, which also transcends duality. He observed that history follows the pattern of thesis-antithesis-synthesis. The adversarial nature of the duality between capitalism in the west and communism in the east nearly ended life on earth on several occasions. Numerous false alarms of nuclear attack on both sides were miraculously averted, usually due to a single individual waiting for confirmation before pushing the button.

Through technological development, humans have the capacity to feed everyone on earth, and to eliminate poverty. World income divided by population could provide everyone with an adequate living. Buckminster Fuller calculated in 1970, with the

49 technology available then, that each person only needed to work about 5 hours per day, 4 days per week to meet everyone’s needs. Productivity has increased by several multiples since then. This indicates that the economic system is flawed, and a new paradigm is needed.

There are several economists who do not fall into the traditional dualistic mold. Herman Daly emphasises the steady state economy; infinite economic growth cannot continue on a finite planet, and the commons should be public property. Two writers on classical economics, Henry George and Thomas Paine also wrote about the common nature of land and resources. Paine in particular wrote an essay that is revolutionary in its implications. In “Agrarian Justice,” Paine asserts that there are two kinds of property, natural property and artificial property-the products of labour (Paine, 1797). He said the earth is “the common property of the human race,” and it is only the products of labour that are private property. This simple concept transcends both capitalism and communism. Therefore, Paine said, the earth had to be shared, or landowners should pay rent, and those who have been excluded should be compensated. In Paine’s terms, an “indemnification” should be paid to the landless for the loss of their natural inheritance. This led the author to ponder how to share the commons, which has occupied his thinking for many years.

Figure 3-2: Conceptual Framework

The Conceptual Framework for this thesis is based on systems of property ownership as influenced by governance at various levels of government leading to human development outcomes as measured by the Human Development Index (HDI). Systems of property ownership were originally defined by Roman law, but were carried forward into western law and especially to British civil and common law. At the supra- national level and in traditional communities, land is considered almost exclusively to be common property. At the supra-national level of governance, nearly every resource is defined by the principle of the “Common Heritage of Mankind.” Perhaps this is because of the more equal power relationship between nation states. Each can assert their equal rights. At the traditional local level of aboriginal people, indigenous tribes, and First Nations, communal land ownership is also universal. This may be due to the egalitarian nature of these societies and their lack of the concept of private ownership of earth in most (but not all) cases.

At the national level, however, communal ownership is almost non-existent, a paradox to be explored. An explanation might be that governments typically exert more power than citizens exert. They are considered as representatives of the people to act on their behalf, and they often make claims to valuable resources such as minerals. This is the case whether the country is a democracy or a monarchy, or as Louis the 14th said, “l'état, c'est moi” (I am the state). Human Development outcomes at the national level are highly dependent on governance mechanisms in place, as shown in the diagram as FPIC, institutions, processes (devolution, decentralisation, and subsidiarity), resource curse, fairness, justice, and commons theory.

Theories of the commons state that the earth is inherently common property and justice dictates that elements of the earth must be shared equitably. This provides theoretical justification for the hypothesis that communal ownership will have better development outcomes as measured by the Human Development Index (HDI). The type of mineral ownership and the governance of each nation influences the development outcome for each country as measured by the HDI.

The conceptual framework provided a basis for analysis. Regarding the various systems of property ownership, it was deduced that mineral ownership by nation- states is inherited as a remnant of feudal society, especially ownership by “the crown.”

Individual ownership came through the ad coelum doctrine transmitted from some Roman jurists through British common law by Blackstone. Various systems of mineral ownership evolved differently in British, Spanish, and Dutch history. A number of countries retain mixed systems of ownership at different levels of government. In the case of field research in the Royal Bafokeng Nation, insights were deduced about communal ownership from people’s attitudes. The sense of fairness recently discovered in other primates and mammals, implies that human beings’ sense of fairness is universal, and not restricted by nationality, religion, or culture. Thus, principles discovered about mineral ownership can be applied globally.

The conceptual framework provides a framework to analyse different mineral ownership systems at every level from local to global, taking into account the governance mechanisms using human development to measure outcomes.

4 Chapter Four: Historical and Empirical Basis for Communal Title in Minerals at the National level: Does Ownership Matter for Human Development? Major Portions Published in: Sustainability 2018, 10(6), 1958; doi: 10.3390/su10061958, 11 June 2018

Introduction The following is a comprehensive survey of legal and historical doctrines of land and mineral ownership, and mineral title regimes around the world to explore the validity of communal mineral ownership. Much of the vocabulary in legal literature is in Latin owing to the origins of western law in Roman law. Pertinent history is from the Commonwealth of Nations, historical writings about the idea of commonwealth, Aristotelian principles, Roman Law, British Common and Civil Law, mining rights globally, international law, space law, communal native title, public trust doctrine, theories of property rights, Ostrom’s work on governing the commons, ethology, and other background information to inform the subject.

This historical survey goes back to Aristotle, focuses heavily on Roman law, and proceeds though history to current concepts of common property such as “the common heritage of mankind” principle seen in international law, and communal native title. Sub-national cases of communal mineral title were explored in Australia, US, Canada, and South Africa. Potential case studies in Bougainville and the Royal Bafokeng Nation were also identified and evaluated. Evaluating potential for sub- national development case study, comparative quantitative analysis, and ethnographic studies were also obtained.

4.1.1 What is the Economic Commonwealth in the Mining Sector? Although “commonwealth” is normally defined in political terms, it literally means common property or riches3. Therefore, commonwealth is also economic. The basic assumption is that the earth and its minerals are common pool resources. In the mining sector, commonwealth is defined by communal title to minerals. The term “title” or “ultimate title” is used here to refer to the ultimate owner of a resource, in this case

3 Dictionary.com

53 minerals. This paper explores the empirical and legal history of communal title to minerals, and development outcomes in various mineral title regimes. 4.1.2 Research Question and Methods The general hypothesis is that communal ownership of minerals will have better development outcomes due to the broader distribution of benefits by redirecting benefits to the populace instead of to the state. In order to answer this question, one must first establish if communal ownership can be legally and historically justified. The historiography of property rights, in general, and mineral titles, in particular must be explored. The history of mineral titles from Rome to recent times is examined as well as communal property in western thought. Modern systems of communal property rights are explored looking at supra-national and sub-national property laws. Next, it is determined if communal title exists at the national level by conducting a comprehensive summary and categorization of national mineral title laws for 199 countries. Seven different categories of ownership are established: No minerals, President or Ruler, State or Crown, Communal (People/Common/Collective), “Customary” Landowners, Decentralised/Mixed, and Claimant/Ownerless/Landowner. It was found that communal ownership of minerals essentially does not exist at the national level, except in legal rhetoric. Therefore, the research question was modified to look at the impact of mineral ownership, in general, on the Human Development Index (HDI). The impact of the national mineral ownership category on the HDI was evaluated using linear regression analysis. It was found that individual categories had inadequate sample sizes, so it was not possible to determine a statistical relationship. Therefore, the samples were combined into two larger categories of centralised and decentralised ownership, and a comparison of the means was performed. This provides empirical evidence for the benefit of decentralised over centralised governance, which can also be found in the literature by (Farzanegan et al., 2018), (Weinthal & Luong, 2006), and others. This article addresses the question of mineral ownership, which has rarely been addressed in the literature. It provides the only complete list of national mineral ownership available, and adds to the literature on centralised versus decentralised mineral governance. This is important for sustainability, for mining governance, and for mitigation of the resource curse, which plagues resource-rich developing countries.

4.1.3 The importance of ownership

The issue of legal title to minerals and other resource wealth is of great importance because it has a large influence on economic development, as well as the distribution of wealth. Ownership of minerals is essential to understand who benefits. F.T. Cawood and R.C.A. Minnitt contend that the mineral owner is entitled to compensation if minerals are taken by another agent, giving the owner unique rights (Cawood & Minnitt, 1998). Hernando DeSoto in his landmark book, “The Mystery of Capital, Why Capitalism Succeeds in the West and Fails Everywhere Else” claimed that individual property titles are the key to development success (de Soto, 2000). There is currently a great deal of pressure for common pool resources to be privatized due to corporate globalization and the prevailing doctrine of neo-liberalism. The current trend in mineral ownership is mainly to allocate title to the state or “crown” which exists for 142 countries listed below. States are then under intense pressure from corporations to turn over mineral rights with generous concessions. Discussion of common or communal rights is almost non-existent at the national level, despite being the primary focus at the international level. Only a few jurisdictions such as the US and Scandinavia allocate rights to individuals or claimants.

As it stands now, countries having national title to minerals may not be required to distribute revenue or benefits directly to local people. Only the level of democratic participation in government and the responsiveness of officials to citizens’ demands determine it. Even in democracies such as Australia, many people feel that mineral revenue has been squandered because there is no savings fund for the future when resources become depleted, and massive resource wealth accrues to corporations and individuals. Sovereign wealth funds generate revenue and savings for the state but provide direct cash benefits to citizens only in a few rare cases such as in Alaska (Widerquist & Howard, 2012).

Providing legal title of minerals to the entire population, to communities, or individuals could provide a strong counterforce to the centralizing and privatizing tendency of modern states in the globalized era. There is a great deal of literature related to the “common heritage of mankind” (CHM) principle in seabed and outer space law. Thomas Paine suggested that the earth itself is the common property of mankind, not just deep seabeds or outer space (Paine, 1797). Hunter-gatherer people traditionally held property in common, not as individuals. The Rirratjingu and the Gumatj clans of

Australia were apparently able to equitably allocate use of “flints, clays and other useful minerals” on their land (Blackburn et al., 1971, p. 7). Many legal cases discuss the issue of communal native title, and the debate about native title can greatly inform the discussion of national mining title laws.

4.1.4 A Short Summary of the “Resource Curse” Jeffrey Sachs and Andrew Warner in their famous working paper defined the resource curse as the tendency of mineral exporting countries to have slower economic growth, controlling for other factors (J. D. Sachs, Warner, 1995). In “The Paradox of Plenty: A Meta-Analysis,” the authors identify the two major perspectives on the resource curse: Macroeconomic mechanisms as reflected in the market and the political function of institutions (Dauvin & Guerreiro, 2017). The market perspective includes the “Dutch disease” (currency inflation resulting in reduction of non-mineral economy), over- expanding public sector, non-reinvestment of natural resource rents, and volatility of resource prices. The institutional explanation focuses on rent-seeking behaviour, where due to poor governance or corruption, government officials or entrepreneurs are able to monopolize resource rents for themselves. This paper will look at the Human Development Indicator (HDI) as the indicator of “development,” which is a much broader indicator than GDP growth. While GDP is included in HDI, it also includes life expectancy and education.

4.1.5 The Rentier State Theory of the Resource Curse There are numerous theories that try to explain the resource curse according to governance; Paasha Mahdevi says that governments try to maximize revenue while minimizing costs, among other explanations (Mahdavi, 2014). Hootan Shambayati claims that the state maximizes its autonomy while making a segment of the population dependent upon it (Shambayati, 1994). Michael Ross contends that if governments can rely mainly on resource rents for revenue, “they are freed from the need to levy domestic taxes and become less accountable to the societies they govern” (Ross, 2012). This is the most plausible explanation, and it underlies the analysis in this paper.

According to the 2013 Resource Governance Index by the Revenue Watch Institute, out of the 58 countries accounting for 80-90% of world petroleum and mining, only 11,

56 or less than 20%, have adequate standards of transparency and accountability (Revenue Watch, 2013) reflecting the resource curse. Of the 58 countries rated, 27 were rated as authoritarian states by The Economist Intelligence Unit 2014 Democracy Index (The Economist: Intelligence Unit, 2014, pp. 7,8). Despite this, mining titles are usually allocated to the national government. Sometimes mineral titles belong to a single family, such as the allocation of most shares of the national oil company Aramco to the Saud family of Saudi Arabia, or even to a single individual, the President (Zambia or Zimbabwe). By giving all the mineral ownership rights to a dictator or family, it is not surprising that these countries suffer the resource curse. Therefore, an alternative property ownership regime, like some form of communal property title, might mitigate the resource curse.

4.1.6 Sustainability in the Mining Industry The International Council on Mining and Metals (ICMM) has determined a framework of ten principles for sustainable development including measures to cooperate on sustainable development strategies, respect human rights, minimize involuntary resettlement, improve social performance, partner with government and NGOs, address poverty, and report on performance (ICMM, 2015). All of these goals would be mitigated by reducing or eliminating the resource curse and increasing the human development index of the target country.

4.1.7 Categories of Property Rights in Land (See also Appendix 4-1) To begin the investigation into the history of communal property title in minerals, and why it is so rare at the nation-state level, it is first important to understand the basic categories of property. This is found in the literature on property rights such as (Anderson & Hill, 1983; R. Barnes, 2009; Dannreuther & Ostrowski, 2013; Feder & Feeny, 1991; Friedman, 1970; Levine, 2005; Sprankling & Ebscohost, 2014; Stephenson, 2013). Fedeer and Feeny provide a summary of the four basic categories of property rights (Feder & Feeny, 1991, p. 137):  Open access: Rights are not assigned, resulting in no motivation to conserve, resources are often degraded, the so-called “tragedy of the commons,” which is actually the “tragedy of open-access.”

 Communal property: Exclusive ownership rights are given to a group of individuals, communities, corporations, associations or other groups.  State Property: Natural resources are managed by government or the public sector.  Private property: Exclusive rights are assigned to individuals. It is crucial to comprehend the difference between mineral title and mineral rights. Mineral title refers to who has ultimate ownership of subsoil resources, in the commonwealth countries referred to as “radical title” usually by the crown. Mineral “rights” can be granted by the owner of mineral title to any number of agents including individuals, corporations, tribes, provinces, etc. Mineral rights can be granted on an inalienable4 leasehold basis, on an alienable freehold basis, or many other combinations. Therefore, the titleholder holds the ultimate sovereignty over the resources and holds the ultimate decision-making power.

Historical development of Property rights 4.2.1 Roman Law-Institutes of Justinian, ius gentium (Law of Nations) The first comprehensive system of laws was the Institutes of Justinian, compiled by the Roman Emperor Justinian in the sixth century, largely based upon the Institutes of Gaius, a Roman jurist of the second century A.D. (J. A. C. Thomas, 1975, p. vii). This information can be found in (Dobra, 2014; Friedman, 1970; Jagger, 2002; Johnson, 2010; Levine, 2005; Lindley, 1988; Rose, 1999; J. A. C. Thomas, 1975; R. A. Williams, 1983), etc.

Justinian asserted an “ius gentium” or law of nations, based on what he called, "the source of morality and the true foundation of all civic laws" which contained “the idea of all mankind as forming one natural community of which all are citizens" (R. A. Williams, 1983, p. 61). The concept of a “natural universal law” was later used by enlightenment writers seeking to overturn the authority of the church, and more recently to promote concepts of international law by the United Nations.

4.2.2 Communal Property in Roman law

4 Cannot be sold or transferred

The Codes of Justinian in Roman law established common property of citizens including the “air, running water, the sea, and consequently the shore of the sea” (J. A. C. Thomas, 1975). Roman law distinguished between res publica (state property), res privatae (private property), as well as two categories of common property: res communes (open access), and res universitatis (community property). They also had the category of res nullius, the property of no one (J. A. C. Thomas, 1975). Larschan and Brennan explain the difference between res nullius and res communis as follows:  Res nullius: Things that belong to no one but can be appropriated. It means the same as open access. The doctrine of res nullius was used by Western Europeans as a basis for making claims over supposedly uninhabited territory such as Australia, which was actually inhabited by aboriginal peoples.  Res communis: Items that (1) may not be appropriated (claimed as private property); and (2) use rights belong equally to everyone. For an example they cite, “the high seas, res communis omnium, as something that cannot be claimed as individual property, since its use for fishing as an example must be open to everybody” (Larschan & Brennan, 1983, p. 315). Although the sea cannot be appropriated, fish in the sea become private property after they are caught. Similarly, even if mineral ownership rights were communal, minerals could become private property after being removed from the ground.

“Res Publica were the property of the state and usable by individuals by reason of their membership of the body politic” [emphasis author] (J. A. C. Thomas, 1975, p. 75). This statement may be a key to understanding the resource curse. In undemocratic or authoritarian states, individual members of the public are definitively not members of the body politic since they are not ruled by consent, and have no voice in the rule of government. Therefore, it may be that allocating mineral title to the state in these cases contributes to the resource curse because the public is left out of the decision-making process. If there was an international standard applicable to mineral ownership globally, perhaps some progress could be made. The Extractive Industries Transparency Initiative (EITI) is mainly concerned with transparency of revenue, and only recently began to investigate beneficial ownership.

Res universitatis are described as “Things belonging to a community, not to individuals, are for instance, those in cities-theatres, stadia, and the like and anything else which is the common property of the community” (J. A. C. Thomas, 1975, pp. 65,75). This may come closest to describing the economic commonwealth. This also conforms to common pool resources as defined by Ostrom, which are managed by small communities. Defining the boundaries of the community is a considerable task. Therefore, the Institutes of Justinian provide a clear precedent for all forms of property including the subtle distinctions between res nullius, res communis, and res universitatis.

4.2.3 Renaissance Rebellion against Papal Rights

In the Catholic part of the world including Spain, Portugal, Italy, and France the pope asserted his authority over the entire world in his various legal claims or ‘bulls’ including the most significant bull, Romanus Ponifex, issued in 1455. In this claim of papal authority, the pope essentially claimed ownership over the entire world, and granted Portugal the rights to all the lands they occupied in western Africa. This drove the Spanish to the new world.

During the middle ages as part of the Renaissance there began a rebellion against the authority of the pope. Williams explains the significance of Roman law and the Institutes of Justinian in particular to this rebellion against papal authority: “Importantly, it was the revival of the study of Roman law in the later Middle Ages that energized the development and maturation of this emergent Renaissance consciousness. Long regarded as the ‘acme of jurisprudential achievement,’ the ancient texts of the Digest and the Compilations of Justinian provided the secular ruler with a respected, formalized, and readily available source of law and legal principles for the governance of a this-worldly, ‘unregenerated’ human society. This revival of Roman law scholarship was a direct reaction to ecclesiastical assertions of authority and jurisdiction in secular life, and was aimed at reconstructing a theory of autonomous royal power which medieval papal hierocratic ideology had historically denied” (R. A. Williams, 1983, p. 50). Anticipating the modern commonwealth, “these writers ultimately accepted and advocated the revolutionary corollary of this core principle of Aristotelian determinism:

60 that the basis of all authority resided in the voluntary consent of the ruled” (R. A. Williams, 1983, p. 53).

The most important of the Spanish Humanist writers was Franciscus de Victoria, a Dominican scholar who first applied natural law theory to the relations between states. “His juridical system of a Law of Nations helped establish the foundations of modern international law, and his works on Indian rights are widely recognized as the source of the basic legal principles of post-sixteenth century Spanish colonial administration” (R. A. Williams, 1983, p. 68).

4.2.4 Dominican Support for Native Rights

These humanist theorists were radically opposed to the Spanish colonial system in the new world, which involved enslavement and abuse of the native people, and believed the natives were entitled to self-determination and autonomy. By virtue of these natural rights, they "were true owners alike in public and in private law before the advent of the Spaniards among them. The Indians, being possessed of this divinely inspired natural reason common to all men, fulfilled any and all requirements for true ownership of their possessions, and, according to Victoria, ‘just like Christians,...neither their princes nor private persons could be despoiled of their property’ without just cause" (R. A. Williams, 1983, pp. 71-72). At least as early as 1532, when Franciscus de Victoria delivered his lecture entitled “On the Indians Lately Discovered,” native title to their land was recognized in law if not in practice. That did not stop Europeans from annihilating the Native Americans of the continental United States under the Christian doctrine of “manifest destiny.” The contrast between legal principle and practice has often been quite vast.

4.2.5 British Civil and Common Law The definitive authority on British Law is found in the commentaries on British law written by Sir William Blackstone from 1765-1769. Blackstone asserted that all of British law was derived from Roman Law as compiled by lawyers such as Tribonian in the 6th century(Blackstone & Warren, 1856, pp. 55,56). Many writers such as B. Ryan identify the origins of British civil and common law in the Institutes of Justinian, “The Romans had a great legal system, and much of our present day law, including mining law, had its origins in Roman law” (Ryan, 1974, p. 104).

4.2.6 Ad Coelum Doctrine Although Roman Law established the rights of minerals to the state, British common law evolved under the doctrine of “Cuius est solum, eius est usque ad coelum et ad infernos” (Latin: "whoever's is the soil, it is theirs all the way to Heaven and all the way to hell"). This doctrine is also known as the ad coelum doctrine, traced to the glossator Accursius in the 1200’s, included in Blackstone’s famous commentaries on English law, and becoming influential in American law (Blackstone & Warren, 1856). By comparison, most countries in the world, including British Commonwealth countries, allocate mineral title to the state (or crown), and not to individuals. The principle of using minerals for the common good was enunciated by Curtis Lindley, “they are by nature public property, and that they are to be used and regulated in such a way as to conduce most to the general interest of society" (Lindley, 1988, pp. 21,22). Through the ad coelum doctrine, the US allows individual landowners in some jurisdictions to own subsurface rights as well. This is only the case in a few countries around the world.

Communal Property Rights in Western Thought 4.3.1 Locke’s Proviso The most prominent legal doctrine regarding land in Western thought is probably “Locke’s Proviso,” that individual property rights are legitimate, “at least where there is enough, and as good, left in common for others” (Roark, 2012). If all property is owned then there is no more land left in common for those who do not own land. This concept is very problematic in a full world, where most of the land and minerals already are owned by someone.

4.3.2 Paine’s Justification for Communal Ownership of the Earth A much more satisfying definition of property is in Thomas Paine’s essay entitled “Agrarian Justice.” This essay was submitted to the French authorities after the revolution in response to an essay written by a priest, entitled, “The Wisdom and Goodness of God in having made both Rich and Poor.” In his essay, Paine asserts that poverty is manmade, not god made, and there are two kinds of property, natural property and artificial property; which is the product of labour. “It is the value of the

62 improvement only, and not the earth itself, that is individual property” (Paine, 1797, pp. 6,7).

Paine proposed creating a fund to pay every person fifteen pounds sterling upon reaching the age of twenty-one as a payment for the loss of his or her share of the earth due to the introduction of private property. Paine also proposed additional payments to people when they reach the retirement age of 50, and those who are lame or blind and thereby unable to work. This essay is often credited as proposing the first social security scheme, the first disability payments, and the first description of a system of dividends from common ownership of property that became embodied in the Alaska Permanent Fund dividend. He makes the claim that the earth itself is common property, and those who displace others from using it must compensate them for their loss. He is essentially saying the entire earth is the common heritage of mankind, and those who have been excluded should be compensated.

4.3.3 Governing the Commons Eleanor Ostrom was the foremost analyst on the governance of common pool resources, especially her book Governing the Commons (Ostrom & Ebooks, 1990), for which she won the Swedish Reich Bank prize for economics in honour of Alfred Nobel. She asserts that governance of common resources was carried out successfully by many communities historically, in contradiction to Garret Hardin’s essay about the “Tragedy of the Commons.” Hardin’s story of overuse of a grazing pasture for cows took the form of an open access regime or res nullius, rather than res communis or res universitatis with laws governing their use. Ostrom’s common pool resources do not fall in the category of res communis, because they are not accessible to everyone, only members of the community. Therefore, they are more appropriately categorized as res universitatis. The communities described by Ostrom were on a small scale; the challenge is to scale the management of common resources up to a larger scale, and to maintain environmental and social sustainability.

4.3.4 The Public Trust Doctrine The Public Trust Doctrine is a pertinent body of common law as it originates in the Magna Carta and the Law of the Forest in 1215-1217 enumerating rights of the barons as opposed to the king. Extensive literature is available since the seminal work of

Joseph Sax including (Rose, 1998, 1999; Sax, 1970; Wood, 2007). The public trust has historically been applied mainly to resources in environmental law that are subject to degradation such as clean air and water. They also apply to traditional common access to seashores, rivers, forests for gathering and hunting, and other res communis resources. Vermont Senate Bill S.44 in 2008 also included minerals in the calculation of the value of these public trust resources (Farley, Costanza, Flomenhoft, & Kirk, 2015).

Contemporary Mineral Title Regimes 4.4.1 Supra-National Communal Ownership Regimes: International Law, Law of the Sea, Antarctica, and Space Law While most countries allocate mineral title to the state, it is in international law, space law, seabed law, and native title law that the most explicit description of communal, rather than national or private rights, including the “common heritage of mankind” principle are found. In addition to ancient Roman law, this area of law may contain the greatest precedent for understanding the principles of common ownership in contemporary legal systems.

A number of books and articles are available discussing property rights in previously unclaimed areas including (Buxton, 2004; Coffey, 2009; Larschan & Brennan, 1983; Leach, 2014; R. J. Lee, 2012; Pop, 2009; Zell, 2006), and others. Because they had not been previously subject to national or private appropriation, they can provide great insight into potential common property regimes that could be applied to the commonwealth of domestic minerals. These property regimes include:  Common Heritage of Mankind Principle  High Seas (Convention on the High Seas, 1958)  Deep seabed (ISA, 1994 and UNCLOS III),  Antarctica (Treaty 1959),  Outer Space (Outer Space Treaty, 1967),  Moon (Moon Agreement, 1984),  Geo-synchronous orbital slots (ITU, ITC),  UN International Law Concepts or Principles

4.4.1.1 Common Heritage of Mankind (CHM) Principle There are four essential elements defining this new principle (Larschan & Brennan, 1983, p. 1):  The area under consideration cannot be subject to appropriation  All countries must share in the management of the region  There must be an active sharing of the benefits reaped from the exploitation of the area's resources  The area must be dedicated to exclusively peaceful purposes This new principle in international law remains very controversial and the meaning is disputed. The main intent is that the benefits, financial and otherwise, from valuable resources in new territories should be shared by all countries, whether they have the technology to access them or not. In practise, there is no apparent difference between CHM and the Roman concept of res communis.

4.4.1.2 High Seas (Convention on the High Seas, 1958) The high seas are subject to the principle of res communis, since the convention states that the high seas are available to all countries, but no government can legally claim (appropriate) them, which would be the case if they were res nullius (Larschan & Brennan, 1983, pp. 314, note 334). The high seas are so large, that they are virtually non-rival, meaning one person’s use does not leave less for anyone else. Nor are they excludable, meaning one person may not exclude others from using them. Non- excludable and non-rival is the definition of a pure public good in economics.

4.4.1.3 Deep Sea Bed (ISA, 1994 and UNCLOS III) The International Seabed Authority (ISA) administers seabed resources which are considered to be “the common heritage of mankind,” and are not vulnerable to claims of ownership by governments. Minerals in the international area and benefits are supposed to accrue to mankind as a whole without discrimination (Buxton, 2004, p. 695). This is subject to much dispute, but currently the deep seabed is managed as the common property of all humankind by the International Seabed Authority (ISA); this is primarily for the collection of seabed minerals.

4.4.1.4 Antarctica (Treaty 1959) The Antarctic Treaty of 1959 set aside the southern polar region for scientific research and environmental protection. Prior to the treaty, seven countries made claims of ownership over territory in the Antarctic, and the treaty freezes the claims of these countries, although not denying them (Buxton, 2004, p. 696). Twelve countries were originally parties to the agreement which now has 52 parties to the treaty, and 29 voting members (United Nations, 1961). Voting rights are determined by the criteria of having substantial Antarctic research and a permanent facility located in the Antarctic, what could be referred to as “skin in the game”.

The CHM principle has not been extended to the Antarctic, and can probably be explained by the fact that Chile and Argentina have both asserted claims to Antarctic territory (Larschan & Brennan, 1983, p. 331). In 1988, a convention for mining called Convention on the Regulation of Antarctic Mineral Resources (CRAMRA) was created allowing for government supported mining activities with environmental protection. However, France and Australia refused to ratify it, so the treaty failed. A new protocol prohibits consideration of commercial mining until 2048 (Coffey, 2009, p. 132).

4.4.1.5 Outer Space (Outer Space Treaty, 1967) The Outer Space Treaty differs slightly from other similar regimes. Article I uses the wording “province of all mankind” which differs from CHM language (R. J. Lee, 2012, p. 154). However, recently the Congress of the United States passed the Space Resource Exploration and Utilization Act of 2015, which makes private property claims to outer space objects. This seems to conflict with the Outer Space Treaty of 1967 which says the Moon and ‘other celestial bodies’ cannot be claimed by governments (Koeber, 2015). This emphasizes the traditional American reliance on the ad coelum doctrine of individual property rights. However, the Asteroid Bill explicitly states that companies cannot claim sovereignty over asteroids or appropriate them, but only have use and extraction rights, which is, therefore, consistent with the Outer Space Treaty. This is also consistent with res communis, rather than res nullius.

4.4.1.6 Moon (Moon Agreement, 1984) The moon treaty has more specific language regarding appropriation than the Outer Space Treaty:

“[n]either the surface nor the subsurface of the moon, nor any part thereof or natural resources in place, shall become property of any State, international intergovernmental or non-governmental organisation, national organisation or non- governmental entity or of any natural person (Article 11.3)” (Pop, 2009, p. 63). This leaves much less leeway for interpretation, and Virgilio Pop claims that is the reason the Moon Treaty has not been universally accepted, while the Space Treaty has a better record of ratification.

4.4.1.7 Geo-synchronous orbital slots (ITU, ITC) Geo-synchronous satellite orbits cannot be subjected to either res nullius or res communis principles due to signal interference and possibly satellite collision. If they were res nullius, under open access anyone could appropriate unclaimed satellite slots leading to competition and chaos. Under res communis allowing open access to satellite slots, even without “appropriation,” would result in problems because they are rival goods, since there are a restricted number of slots. Occupation of a geo- synchronous orbit amounts to appropriation in practice. Therefore, a management regime has been created under the ITU and ITC assigning rights both on a priori (quotas by nation) and a posteriori (first come-first serve) basis (Buxton, 2004, p. 703), but conflicts continue with various national claims.

4.4.1.8 UN International Law Concepts or Principles There is wording in international law, that resources rightly belong to “peoples” and not to states or nations. Nations can often mismanage national resources with little regard to the abject poverty facing their compatriots (Majinge, 2008, p. 259). Charles Majinge also informs us that “the right to self-determination and how to freely dispose of natural resources is a right of peoples not of states according to article 1(2) of the two United Nations human rights Covenants of 1966. The provision prescribes rights to natural resources for "all peoples” and not to governments (Majinge, 2008, p. 260).

Ricardo Pereira and Orla Gough also cite UN documents to assert the right of peoples as opposed to states. They cite the 1962 Resolution on Permanent Sovereignty over Natural Resources (RPSNR), Article 1 of the International Covenant on Civil and Political Rights (‘ICCPR’), and art 1 of the International Covenant on Economic, Social

67 and Cultural Rights (‘ICESCR’), which all confirm peoples’ rights to self-determination. (Pereira & Gough, 2013, p. 459).

The mining industry is currently implementing concepts such as Social License to Operate, and Free, Prior and Informed Consent (FPIC) of local communities. Since these principles are not found in domestic law, they are more of an international standard. They are motivated by the same concerns for fairness that are found to be universal. The principle of FPIC is found in the UN Declaration on the Rights of Indigenous Peoples (UNDRIP). Article 10 states, “Indigenous peoples shall not be forcibly removed from their lands or territories. No relocation shall take place without the free, prior and informed consent of the indigenous peoples concerned and after agreement on just and fair compensation and, where possible, with the option of return” (United Nations, 2007). Articles 11, 19, 28 and 29 also explicitly use the term FPIC.

4.4.2 Sub-National Communal Ownership Regimes 4.4.2.1 Australian Communal Native Title In the arena of native title there are numerous cases in Australia and globally describing the concept of communal native title. Judge Blackburn in the Milirrpum case, although finding no prior concept of native title in Australian law, did define numerous principles later incorporated into native title. He referred to the case of Geita Sebea v. Territory of Papua, which was Australian territory at the time. The case established that the ownership of the native lands was a “communal usufructuary occupation [emphasis author] with a perpetual right of possession in the community” (Blackburn et al., 1971, pp. 52,53). Although Blackburn did not find native title in common law at the time, it had already been recognized by statute in a previous Australian case. Therefore, the principle of communal ownership is not alien to common law jurisdictions in the British Commonwealth.

Native interest in their land was described in the Milirrpum case in the following way including the following description of mining, “The right to dig for and use the flints, clays and other useful minerals in the said lands” (Blackburn et al., 1971, pp. 7,8). It is noteworthy that in economics, the primary definition of private property is the ability to exclude others from the right to use your property (excludability) for rival goods (your

68 use leaves less for others). In this characteristic, the Rirratjingu and the Gumatj clans appeared to have communal private property rights to their land, including subsoil minerals. In the later Ward case, the majority found no evidence of native title to the subsurface rights in the traditions and customs of the indigenous community and concluded that native title in Ward did not include ownership of mineral resources despite the contradiction.

Australia was settled under the Justinian doctrine of “terra nullius,” meaning that the land was empty or unoccupied, and preceded according to that definition for 200 years until native title was established in the 1992 and 1998 Mabo cases. Legal authorities readily found res (or terra) nullius in Roman law but were unable to locate res communis, res universitatis, res publicae, or any other communal ownership concept. This is disingenuous. In the recent native title cases, native title is described as “sui generis” or original and unlike anything else. It is not inaccurate that native title is described as sui generis, since native title varies globally. For example, the Merriam people in the Mabo case were gardeners, thus having individual use if not title of their garden plots. Some African cases established ownership by a chieftain on behalf of all his tribe, so there is a wide variety of native titles. However, hunter-gatherer peoples almost universally hold land communally, not individually.

4.4.2.2 Native Americans Extensive literature is available about development and land rights for Native Americans including (Dippel, 2014; Grogan, Morse, & Youpee-Roll, 2011; Henson, 2008; Hurst, 1997; Necefer, Wong-Parodi, Jaramillo, & Small, 2015; Niblock, 2007; Randall, Spilde, & Taylor, 2014). What is interesting about Native American mineral rights is that it is similar to Australia where Native American tribes rarely have actual title to minerals since reservations are in the form of a trust held by the federal government. Therefore, communal title is more in the form of perception than actual law. However, Native American tribes, like Australian Aborigines, can negotiate payments for use of their lands for mining, and some tribes have more extensive ownership rights (Grogan et al., 2011, p. 10).

4.4.2.3 Canadian First Nations In the Canadian territory of Nunavut, native Inuit (First Peoples) have settled a single comprehensive land claim. If subsurface rights are also owned, 100% of royalties belong to the tribe (Canada: Indigenous and Northern Affairs, 2018a). The Dogrib (Tlicho) people negotiated a fee simple title (including minerals) self-government agreement (Canada: Indigenous and Northern Affairs, 2018b). For Canadian Aboriginal Groups there is often crown ownership on land reserved for natives, surface ownership, and subsurface rights. There are treaties, land claim settlements, and self- governing agreements: a variety of different ownership regimes for Canadian tribes.

4.4.2.4 Royal Bafokeng Nation The case of the Royal Bafokeng Nation (RBN) in South Africa is quite extraordinary. In the late 1800’s under the leadership of Chief Mokgatle, the tribe was able to purchase legal title deeds to their land (S. E. Cook, 2013, p. 62). In 1920, one of the largest platinum finds on earth was discovered on Bafokeng land, and was later developed by mining companies starting in the 1960s. The Bafokeng fought many battles through the apartheid era and after to retain rights to their land and minerals. A landmark case in 1999 finally gave them legitimate compensation of 22% of mining company net income for minerals on their land and other benefits (Manson & Mbenga, 2003, p. 45). Throughout their existence, the Bafokeng maintained communal title. By careful management of mining revenue, the Bafokeng have earned the title of “The Richest Tribe in Africa” (Manson & Mbenga, 2003). The RBN can provide a case study of successful communal title to minerals, and is found in chapter 6.

4.4.2.5 Alaska Permanent Fund Dividend In the case of the Alaska Permanent Fund dividend, a sovereign wealth fund was created from oil royalties on state land starting in 1979 and written into the state constitution. Later a legislative statute was written that mandated using revenue from interest payments on the fund as a per capita dividend to every resident of Alaska. This dividend system typically pays each resident of the state $1000-$2000 per year from interest on the Permanent Fund. This payment has been credited with reducing inequality and poverty in the state of Alaska, and is considered as a model for other countries to follow (Widerquist & Howard, 2012). This is one of the few cases, which de facto establishes communal rights to the resources of the state as opposed to

70 individual or state rights. The state funds 80% of its state budget from oil, so is also receiving revenue, but the profit of the permanent fund is allocated directly to the people.

Figure 4-1: Alaska Dividend Amounts per Year (Apfc.org)

Citizens’ Wealth-State vs. Citizen Ownership of Sovereign Wealth in Alaska: Angela Cummine, in her book entitled, “Citizens’ Wealth,” discusses the issue of whether mineral wealth belongs to the state or to the citizenry. Regarding Sovereign Wealth Funds (SWFs) typically derived from minerals, she writes, “…vagary dogs the question of whether SWF assets are primarily the property of states or citizens, causing confusion, competition, and conflict within numerous SWF-sponsor communities. Moreover, these squabbles occur irrespective of how democratic the government is that is managing those sovereign funds, suggesting a fundamental uncertainty about the ownership status of sovereign wealth itself” (Cummine, 2016, p. 10). There is ongoing confusion about whether minerals should belong to the state or to the people, and if there is any difference.

She reports on a legal case in Alaska in the 1980’s when the citizenry sued the state for ownership rights to the state’s sovereign wealth. Cummine notes that the courts treated the State and Alaska citizens as separate and competing entities for ownership of mineral wealth. The courts wrestled with the question of who was the rightful owner,

71 the people or the state, administering resources on the people’s behalf. The appellate court ultimately decided the case on behalf of the state citing, “language in the Alaska Constitution referring to the state as owner of Alaska’s natural resources” (Cummine, 2016, p. 37). Note the determination of the case based on the ultimate mineral title granted to the state in the Alaska Constitution. This bolsters the argument that ultimate title to minerals is crucial in the determination of who benefits from minerals, the government or citizens.

Cummine recommends amending the Santiago Principles for SWFs to achieve citizen- ownership of sovereign wealth, and transforming “sovereign funds into community funds, funds run by the people, for the people” (Cummine, 2016, p. 16). This would also enhance the sustainable development goals of ICMM.

4.4.3 National Mineral Title Regimes 4.4.3.1 Compilation of National Mineral Title Laws In order to understand the current property regimes for mining countries globally it was necessary to construct a table of mining title laws in all nations (Appendix 4-2). Mineral title laws were found in national Constitutions or Mining laws for 199 nations of the world. These different mining titles were then separated into the following categories:

1. No Minerals: Some states having no mineral resources were listed as “No Minerals.” This was straightforward. 2. President or Ruler: Five mainly African countries give mineral titles to the “President” or “Ruler.” This was clearly stated in the law books. In many other cases wording was ambiguous. 3. State or Crown: For example, in Indonesia, the law states that minerals, “shall be controlled by the State and exploited to the greatest benefit of the people” (GOXI, 2018). Since the state is named as the primary agent, Indonesia was listed under the category of State/Crown. The vast majority of countries (142) retain title to ownership of minerals by the state, or “Crown.” 4. “Communal (People/Common/Collective): In the case of Vietnam, the law states that minerals are, “property invested and managed by the State are public properties, coming under ownership by the entire people represented and uniformly managed by the State” (Vietnam, 1992). In this case ownership

is twice stated as belonging to “the entire people and being “public properties,” and also twice stated as being “managed by the state.” Therefore, Vietnam was put in the category of “Communal.” Algeria asserts collective mineral titles; Ethiopia and South Africa assert “common” mineral titles, and a total of 19 countries grant titles to the “People, “Public,” “National Community,” or the “Public Domain.” These are all categorized as Communal or Common Ownership according to the words on the pages of law. The goal was to interpret to the greatest extent possible what the meaning of the legal passage was, and the intent of the authors. Upon further research using the United States Geological Survey of each country, it was found that the words on the page do not correspond to any real form of Communal Ownership, and are, in practice, no different than National Ownership (Fong-Sam, 2017). 5. “Customary” Landowners: Numerous Pacific islands grant mineral titles to “Customary Landowners” which may or may not be communal such as Bougainville, Vanuatu, Kiribati, Micronesia, Nauru, Marshall Islands, Tuvalu, and Palau. For example, in the case of Nauru, land ownership is private by family, not communal. The Merriam Islanders, where the famous Australian “Mabo” native title case originated, are gardeners and have individual plots, while mainland Aboriginal tribes mainly held land communally. Some Pacific islands had laws stating that minerals belong to “Landowners” and some to “Customary Landowners.” Since the cultures are similar, they were all categorized as customary landowners. 6. Decentralised/Mixed: The UK, US, Canada, Australia and a few others have mixed or ambiguous systems of ownership, and are divided between the state and smaller subdivisions such as canton, province, or regional, and extending to claimants, and landowners. These were categorized as Decentralised/Mixed. 7. Claimant/Ownerless/Landowner: In eight cases, there was no mention of the state or government as owner, merely as registrar of claims for landowners or claimants. These were categorized as Claimant/Ownerless/Landowner. Finland, Germany, Korea, Singapore, and Sweden were unique in minerals being essentially ownerless until found by a claimant. The claimant is then granted mineral rights by the state. In Finland, this is referred to as “everyman’s

right.” Only in Iceland, Latvia, and Lebanon are mineral titles exclusively given to landowners.

4.4.3.2 Myanmar-Mineral Ownership in an Authoritarian State Quoting from a recent article about Myanmar, Andrew Bauer and Maw Htun Aung of NRGI state, “Today, approximately 99 percent of official oil, gas and mining revenues are collected by the national government or state-owned entities, as prescribed by the 2008 constitution” (Myanmar, 1994). This follows Ross’s definition of a “rentier-state” receiving resource rent independent of, and not accountable to, the public. The lack of benefits to resource-rich regions exacerbates ethnic conflicts in the various regions, such as Kachin, Kayah and Tanintharyi. Bauer and Aung advocate greater sharing of resource wealth at a decentralised level as key elements of peace-making (Myanmar, 1994). Since minerals are the property of the state, and 99% of “official” revenue has been received by the state, it is not surprising that conflict has ensued from the sense of injustice over use of revenue.

4.4.3.3 Examples of Communal Ownership at the national level Mongolian Mining Stock Ownership Mongolian mineral law grants mineral title to “the people under state protection.” Consistent with that principle, every citizen of Mongolia was granted 1072 shares in the mine at Oyu Tolgoi, and was granted some cash from mining activities in the past. There is currently no dividend being generated by the project, but there may be in the future. Through this universal share in the mine, the state recognizes the communal property rights of its citizens to minerals.

Figure 4-2: Mongolian Public Mineral Stock certificate5

5 Acquired from anonymous Mongolian classmate in Mining and Natural Resource Law Course, UQ, 2015

Bougainville-Individual Payments Due to the devastating Civil War which had the largest number of fatalities in the Pacific region since WWII, estimated at 10-20,000, there is substantial literature on Bougainville including (Denoon, 2000), (Hermkens, 2015), (Lasslett, 2014), (Regan & Griffin, 2005), and others. The island has a system of matrilineal land inheritance, and communal “customary” landownership. Violation of these principles and retention of 98% of mining royalties by the central Papua New Guinea government, are said to be some of the proximate causes of the civil war. In the Bougainville case, according to Professor Ciaran O'Faircheallaigh, of Griffith University, Australia, payment of mining royalties to an individual landowner who did not share the revenue with other communal owners resulted in that person being the first person murdered in the civil war (O'Faircheallaigh, 2015).

Nauru-Customary Landowners The island nation of Nauru is a unique case. People on Nauru fished, farmed, and gathered coconuts prior to occupation by foreign colonists. A valuable mineral was found, leading foreign powers to take control of the resource. Nauru had one of the world’s largest and most valuable deposits of phosphates, prior to depletion. After attaining independence in 1968, they were able to obtain substantial royalties for the resource totalling $3.6 billion (in 2000 dollars) by 2002. In 1975, Nauruans had a per capita GDP of $50,000, exceeded only by Saudi Arabia at the time. Nauruans now

75 suffer catastrophic conditions of child malnutrition and anaemia. More than half the population smokes cigarettes. Violence against women due to alcohol is widespread. Eighty-two percent are overweight, leading to a quarter of adults having diabetes, including fifty-three percent for women over fifty-five. Life expectancy is only fifty-six for men and sixty-five for women (T. Thomas, 2013). A more extreme example of the resource curse could hardly be found.

4.4.3.4 Human Development Index Evaluation In order to evaluate the impact of mineral ownership at the national level, a correlation was performed with the 2014 Human Development Index for the categories of mineral ownership explained in Table 4-1. Although the small number of cases may reduce the statistical significance of the results, some basic trends can be perceived from these correlations. The first interesting finding is that countries with no minerals fared better than many of the others, with a mean HDI of 0.748. This is consistent with the idea that resources are often a curse if governance is corrupt. Countries with the least accountability to the population, which presumably are the countries where a President or Ruler controls the minerals, had the worst HDI of .595. This is only five cases, so perhaps is not a robust result.

Customary Landowners had the third lowest HDI of .651, but this only represents eight Pacific Island countries which are mainly underdeveloped. The most robust result is the HDI of .673 for 143 countries that have state or crown mineral title, which is essentially tied for the second lowest outcome. This supports the contention that giving mineral title to the national government leads to the resource curse except where governance is good. In the 19 cases where laws indicated “communal” ownership, the HDI was 0.683, which was only slightly higher than the national case. This supports the finding that in reality, saying that the “people, public, or communal society” owns the minerals means nothing in practice and it is actually the same as government ownership.

Where there was a decentralised/mixed system of mineral ownership the HDI was the second highest at 0.851. The best outcome turned out to be where individuals or claimants have mineral titles with an HDI of .875. This tends to support De Soto’s

76 contention that individual property titles have the best outcome. Weinthal and Luong (2006) also suggest that domestic private ownership would help reduce conflict.

Table 4-1: Summary of Mineral Title Regimes and HDI (From Appendix 5.2)

Type of Ownership Mean HDI 2014 Number of cases No minerals 0.748 7 President 0.599 4 State/crown 0.673 143 People (common, communal) 0.683 19 Customary (traditional) landowners 0.651 8 Decentralised/mixed 0.851 10 Claimant/landowner 0.875 8 Total 199

4.4.3.5 Analysis of Ownership Categories A multiple regression analysis was attempted using these ownership categies as the independent variables, and HDI as the dependent variable. Due to small sample sizes the results were not statistically significant, and the communal category did not provide much insight. Therefore ownership categories were aggregated into larger groups titled centralised and decentralised. This allowed to a statistical test of difference between centralised and decentralised mineral ownership. Decentralised ownership may achieve benefits by distributing mineral governance and revenues more widely in society. There is also rent-seeking at the local level, so the topic is subject to great debate. Results are in chapter 5. During the review process some of the reviewers suggested that additional statistical analysis was required to disaggregate the impact of mineral ownership from other factors affecting the Human Development Index. The comparison of the means test between centralised and decentralised ownership of minerals is not conclusive regarding the impact of ownership on the HDI, but only a correlation. There are many other factors that could be having an effect, and therefore additional regression analysis was suggested in order to disaggregate the impact of ownership from other factors. One of the primary tasks was to determine the other factors that bear on the HDI that could be used as independent variables. In chapter 5 all the independent variables influencing the HDI were sought, and attempted to be

77 statistically separated, to determine the effect of mineral ownership. In other words, what is the impact of mineral ownership controlling for all other available factors?

4.4.3.6 Why do national government claim mineral titles? The history of government ownership of land and resources is based on a number of historical principles. In western society, initially the Catholic Pope claimed divine authority of all the lands of the world under the principle of Hierocratic Ecclesia stated in the Romanus Pontifex in 1455. This was rejected during Renaissance humanism and religious authority was replace by secular authority. The rights of the sovereign (the King) replaced the rights of the Popes. This developed the feudal system of “tenures” vesting all property in the monarch or sovereign, from which the nearly universal national ownership of minerals are inherited today. National government as sovereign have replaced the monarch (R. A. Williams, 1983).

During exploration of the world, feudal monarchies such as England, France, Germany, Spain, and many others followed a number of principles to assert ownership over foreign lands. The first was the principle of “discovery,” meaning that the land was empty or “terra nullius” and therefore according to Roman law it was free for the taking. This principle was claimed in Australia despite the fact that close to one million aboriginal peoples were already living there, and the land was not “empty” (Appendix 4-1).

Under British Common Law, there were three additional principles for acquiring title to foreign lands, “conquest, cession, and occupation.” The meaning of conquest is obvious; it is the taking of land by force. Cession means that the existing population “voluntarily” ceded the land to the British, which, in reality, is the same as conquest. Finally, “occupation” is a temporary measure that eventually becomes permanent through annexation. The final principle used to acquire foreign lands is colonization. This is the assertion of land claims over “inferior people” by a superior force through settlement of their land. Assimilation and appropriation of the native peoples’ culture is used as a strategy to colonize land. In North America, this was the principle of “manifest destiny.” In reality the assertion of mineral titles by national governments over communities is based historically on violence and conquest (Appendix 4-1).

Sense of Fairness- Basis in ethology and anthropology Do people find government ownership of minerals to be fair? Recent ethology research has found that the sense of fairness extends to primates and other animals, and not just humans. Prof Frans de Waal in particular has written numerous books about the evolution of morality and that it is inherent in not only human beings but also in primates (Waal et al., 2006). Other researchers such as Yamamoto and Takimoto (2012) have confirmed the same findings. Therefore, what is found in national laws, often based on the history of conquest, occupation, or settlement, may not seem fair to all citizens. International law in particular is more responsive to the concerns of lesser-developed countries due to their greater numbers in the UN General Assembly.

Overcoming the resource curse through distribution of revenues and mineral titles Martin E. Sandbu in 2006 and Paul Segal in 2011 each proposed the distribution of resource rents to the public as a solution to the resource curse. Sandbu proposes a “Natural Wealth Account” which distributes mineral royalties to every citizen from a “Natural Wealth Office.” Then, the government can tax this rent back at any rate they desire up to 100% (Sandbu, 2006). This theoretically restores the accountability of government due its need for consent of the governed to taxation. Segal proposes a similar scheme where all resource revenues are paid directly to the citizenry through a resource dividend. He estimates that global poverty would be cut in half (Segal, 2011). Both of these proposals depend on the national government to voluntarily give up direct collection of mineral revenues, and instead pay them directly to citizens. While these proposals are sound, it would be enhanced if ownership of minerals itself was changed. Then the distribution of revenue will follow naturally and legally. Recommendations for changes in ownership of minerals could occur through creation of an international best practice or development of customary law. If mineral titles do not belong to the state in the first place, it will be more difficult for governments to be corrupted by this unaccountable revenue. If mineral ownership is decentralised and belongs by law to the citizenry communally, to citizens individually, or to “claimants” as in the Finnish “every man’s right,” then development outcomes are likely to be better, and the resource course is more likely to be avoided.

Conclusion Chapter 4

National government ownership of mineral titles often results in the resource curse, especially in authoritarian states, since leaders have an independent source of income that is not accountable to the population, as seen in Myanmar, Democratic Republic of the Congo, Saudi Arabia, and other autocracies or warlord states. If some individuals are compensated but not others, such as in the Bougainville case, there may be resentment and conflict generated. States such as Alaska and Mongolia have distributed direct benefits or revenue to the public, thereby recognizing some communal ownership rights. There is ample precedent and clear legal history to implement communal titles. Communal title to minerals, and resulting decentralised benefit sharing, may result in less conflict and better development outcomes than either state or individual title to minerals. This would contribute to Angela Cummine’s call to “turn sovereign funds into community funds, funds run by the people, for the people” (Cummine, 2016, p. 16). This statement could be expanded to include all mineral revenues, since sovereign funds only receive a small fraction of public mineral revenues, such as 12-15% in the case of Alaska. Future research by this author will investigate the statistical correlation between mineral titles or benefit sharing with the human development index (HDI) to help create better development outcomes and reduce conflict.

5 Chapter Five: The Case for Decentralization in National Mineral Ownership for Human Development

Introduction The resource curse remains a “wicked problem” that defies solutions (Rittel & Webber, 1973). The approach pioneered by Sachs was to look at natural resource dependency as a primary factor resulting in low economic growth (J. D. Sachs, Warner, 1995). However, benefits from mineral extraction are often determined by ownership (Cawood & Minnitt, 1998). Owners of mineral bearing land or sub-surface minerals are the beneficiaries of mining by receiving payments for extraction from mining or fossil fuel companies. The “rentier-state” theory of the resource curse is based on evidence that central governments that have ownership rights and therefore acquire revenue from minerals without relying on taxation, are less accountable to their citizens (Ross, 2012). Conversely, if decentralised levels of government have mineral ownership and receive resource revenues, they might be more accountable, and thus have better development outcomes. Therefore, rather than looking at just resource dependency, the criteria of legal ownership to minerals is evaluated for its impact on human development. None of the other studies of decentralisation analyse the impact on human development.

The UN Human Development Index (HDI) was selected as the indicator for development rather than GDP, since it is a more robust indicator, as it also includes education and longevity in addition to income (United Nations Development Programme, 2018). In this chapter, the authors attempt to analyse this issue in granularity using advanced econometric methods and comprehensive data. The initial hypothesis was that communal ownership of minerals would generate better outcomes. However, it was found that although communal ownership was stated in some national laws, in practise it amounts to state ownership, so the communal category is meaningless for the analysis. However, by combining ownership into centralised and decentralised categories, there was enough data for meaningful results.

The historiography and global categorization of minerals in chapter 4 and the case study in chapter 6 provide qualitative evidence for the benefit of communal or decentralised mineral ownership. In this chapter a quantitative approach was adopted to disaggregate the impact of ownership from other factors in order to strengthen the argument. Decentralization is believed to have significantly positive impact on social and economic development, however, little or no evidence is available where researchers have explicitly examined its relationship with HDI. It would be interesting to find if there is any significant relationship between ownership (or decentralization) and development outcomes of countries under the analysis.

In this study, econometric methods are employed to analyse the impact of ownership on development outcomes. Various confounding factors are used to control for the ownership impact which include, governance, demographic, geographic, and economic factors. Governance factors include Accountability, Stability, Effectiveness, Regulatory Quality, and Rule of Law. In addition, other included factors were corruption perception, and democracy score, whereas demographic factors include gender gap and population. To account for regional and geographic impact, region of the world was included. Similarly, international competitiveness and resource exports are used to account for economic factors. The regression analysis provides significant evidence of ownership impact on development outcomes as measured by the Human Development Index. To overcome the endogeneity issues (and possible consequences), an instrumental variable approach is employed in the analysis (See for instance, Wooldridge (2020).

Research Question and Design The objective of this chapter was to evaluate the quantitative relationship between mineral ownership and human development, especially communal or decentralised ownership. The primary research question was: “How can communal/decentralised ownership of minerals address the resource curse problem?” A secondary question was “What type of mineral ownership provides the best development outcomes at the national level?” This analysis attempts to answer both questions. Since it was not possible to analyse communal ownership at the national level, decentralised

82 ownership is evaluated instead. Communal ownership could not be evaluated because the sample sizes were too small, and the category doesn’t really exist at the national level. If this hypothesis turns out to be wrong, insight may be obtained into what ownership category provides better outcomes.

In order to evaluate the impact of the mineral ownership regimes on development, controlling for the effect of other independent variables is necessary. Analyses of the resource curse in the past have been done using GDP growth as the dependent variable. Some of the independent variables used by Sachs and Warner can be useful for the regression analysis in this chapter. They are found in the 1999 paper by Sachs and Werner entitled, “The Big Push, Natural Resource Booms, and Growth”. These factors include openness to trade, landlocked, central government savings, tropics, institutional quality, natural resource exports/GDP, mineral exports/GDP, Standard deviation of Terms of Trade, and manufacturing export share (J. D. Sachs & Warner, 1999, pp. 64-67).

Organization of the study/chapter The chapter is organized in the following manner. First is a shortened literature review dealing only with resource ownership, decentralisation, and development. Next is an explanation of methods and analysis. That is followed by a summary of countries according to their ownership model, and the HDI of each country according to category of ownership. Next are the results of three different statistical analyses of the data: First is a comparison of the means t-test to compare countries with centralised versus decentralised categories of mineral ownership. Since this was not conclusive without accounting for other governance factors, the results of a multiple regression analysis is reported next. The final analysis explained is the instrumental variable approach that allows for accounting of the endogeneity problem, due to the fact that several independent governance variables are correlated with decentralisation. Discussion and conclusions are at the end.

Brief Literature Review 5.4.1 Resource Ownership and Development

The relationship between resource ownership and development has not been extensively explored. The following are key points summarized from the more extensive literature review found in chapter 3. “Ownership is largely ignored in the literature due to the assumption that resources are mainly state owned” (Weinthal & Luong, 2006). For example, Venables (2016) states, “Subsoil assets are property of the state in almost all countries except the United States”. It is true that state ownership predominates, but there are many other mineral ownership regimes worldwide. For example, J. Otto (2015) defines six categories of ownership, and Flomenhoft (2018) has previously identified seven different types of mineral ownership in national laws which are similar to Otto’s categories.

Most of the existing literature evaluates the impact of decentralization on economic growth, not on human development, or focusses on fiscal decentralisation, not ownership. There have been some studies on the relationship between natural resource dependence and the human development index such as (Dias et al., 2006; Dwumfour et al., 2017; Hlavová, 2017; Huang et al., 2014; Pineda & Rodríguez, 2010). Larson and Ribot (2004) summarize many studies of decentralisation, and justifications for it include: efficiency, equity, democratization, rural development, public service improvement, poverty alleviation, relief of fiscal crisis, stability, unity, and legitimacy of government.

Previous research explores the relationship between ownership and state repression, public or private ownership, resource nationalisation, devolution, the monopolisation of resources by tyrants, and is found in (Flomenhoft, 2018; Mahdavi, 2014; J. Otto, 2015; Venables, 2016; Wegenast & Schneider, 2017; Weinthal & Luong, 2006; Wenar, 2008). For example, Wegenast and Schneider (2017) contend that when international mining companies control resources, that government violence against civilians increases, especially if property rights are not secure. Mahdavi (2014) contends that governments nationalize the oil industry when they perceive “unfairness” in the relative share of oil profits going to their own country compared to the countries where the oil companies reside. Wenar (2008) shows that resources correlate with authoritarianism, civil war and coup attempts, and lower rates of economic growth. He claims it is foreign money flowing into tyrants’ bank accounts through purchase of resources that fuels the problem. Luong and Weinthal (2006) analyse the impact of

84 state ownership with control, state ownership without control, private domestic ownership, and private foreign ownership. They contend that better governance including transparency, accountability, and oversight can be overcome by private domestic control. Categories of ownership studied here include private domestic ownership, so their findings overlap with this study. However, none of these studies addresses ownership at all levels of government, individuals, claimants, and traditional owners as done in this analysis.

5.4.2 Resource Decentralisation

Numerous writers summarize the recent trend toward resource decentralisation including (Arellano-Yanguas, 2011; Barber, 2005; Bebbington, 2014; Brosio, 2003; Farzanegan et al., 2018; Larson & Ribot, 2004; Perez-Sebastian & Raveh, 2016; Verbrugge, 2015; J. P. Williams, 2008), Consensus has developed over the last several decades that the resource curse results in negative effects such as authoritarianism, militarisation, regional secessionism, and socioeconomic inequality. In response, a consensus has developed around “localist” policies for redistribution of revenues to sub-national governments, participation of local citizens in spending decisions, and for mining stakeholders to be involved in these local decisions (Arellano-Yanguas, 2011). Larson and Ribot (2004) summarize many studies of natural resource decentralisation claiming it is a global movement. Justifications for decentralisation include: “better efficiency, equity and inclusion leading to improved management; democratization and people’s participation; rural development; public service performance; poverty alleviation; relief of fiscal crisis; macroeconomic stability; national unity and state building; and helping to increase the legitimacy of government” (Larson & Ribot, 2004). According to Brosio (2003), many countries have revenue sharing with sub-national governments including Argentina, Australia, Bolivia, Brazil, Canada, Colombia, Indonesia, Italy, Malaysia, Nigeria, Papua New Guinea, Peru, Philippines, Russia, and the United States. He argues that revenue sharing is the most effective approach due to difficulties of administration, and the need to keep energy policy at the central government level (Brosio, 2003).

Verbrugge (2015) identifies the potential of decentralisation to transfer mineral wealth to a large portion of the population, especially the local labour force. However, he

85 identifies several areas of conflict that complicate the potential benefits. These impediments include conflicts between central and local authorities over large scale mining projects, conflict between large and small-scale mining such as artisanal mining, and conflicts with indigenous rights over resources (Verbrugge, 2015). Kolstad and Wiig (2009) summarize three types of resource curse explanations, Dutch Disease and two political economy (PE) explanations, centralised and decentralised. They explain the centralised PE model is based on rent seeking through patronage, and the decentralised model is due to rent seeking by entrepreneurs. In either case they claim that resource rents create dysfunctional behaviour (patronage or rent- seeking) due to bad institutions of governance, causing economic inefficiency (Kolstad & Wiig, 2009). A number of writers propose direct distribution of revenues for the purpose of reducing poverty and increasing government accountability including (Cummine, 2016; Gillies, 2010; Moss, 2011; Sandbu, 2006; Segal, 2011). All the studies cited about decentralisation explore revenue distribution and some empowerment of decentralised level of governance, but do not explicitly study decentralisation of ownership.

5.4.3 Methods of Decentralisation

Mottu and Ahmad (2002) describe three different management systems for distributing oil revenues: Centralization, assigning revenues to sub-national jurisdictions, and sharing revenues with resource producing regions. They advocate centralization of oil revenues, but which assign some control over tax rates to sub-national levels and some transfers to provide stable levels of financing. James M Otto (2001) summarizes the use of taxes for decentralisation of revenues, which allows different level of government to collect different taxes. Fiscal decentralisation is justified in order to provide revenue to mitigate local environmental and social impacts in the framework of sustainable development. Ross et al. (2012) explore horizontal inequality, which they define as inequality associated with “ethnic, religious or other divisions between groups.” They list nine cases of secession that were driven by the presence of resource wealth in each region. They list three methods of decentralizing revenue from resources: 1. They may levy taxes directly on the resource industry.

2. They may receive a direct transfer from the central government that is a defined share of the revenues originating in the region. Each oil-producing state in Nigeria, for example, receives 13 percent of the oil revenues generated in that region. 3. They may receive indirect transfers—through the national budgeting process—that reflect preferential treatment for producing regions. Due to its greater management capability, they advocate that central government collect and distribute resource revenue, but they recognize that in order to reduce secessionist pressure, they may have to grant subnational governments the ability to tax resources, and transfer a just share of revenues to them. All of these methods involve decentralisation of revenue, but do not specify decentralisation of ownership.

5.4.4 Devolution

Northcott (2012) asserts that indigenous communities should have sovereignty and self-determination over their resources as a matter of human rights and international law citing the 1993 Nunavut Land Claims Agreement Act in Canada as providing the Inuit with sovereignty over the cultural, political and social dimensions of their communities. The cross-border sovereignty asserted by the Sami people of the northern latitudes of Finland, Norway, Sweden and Russia, to demonstrate that national borders are not the only meaningful determinants of sovereignty (Northcott, 2012). The concept of permanent sovereignty over natural resources is gradually being expanded to cover non-state actors and sub-state peoples such as indigenous communities. Self-determination is another international legal principle that applies to indigenous people. These two principles strengthen the legal basis for indigenous people to assert rights to land and resources under their jurisdiction (Pereira & Gough, 2013). Alcantara et al. (2012) conducted interviews with sixteen officials of the Yukon government (Canada) after the Devolution Transfer Agreement (DTA), which became effective in 2003. With this agreement, the federal government ceded control over all territorial lands, surface and subsurface resources such as forestry and minerals, and waters. They found that in this case, devolution was beneficial due to improvements in government efficiency and responsiveness at the provincial level (Alcantara et al., 2012). Devolution can include providing sovereignty over natural resources to indigenous groups such as in the Nunavut Land Claims and Yukon devolution

87 agreement. These studies address decentralisation of resource ownership. However, they are limited to indigenous communities and not to nation-states.

What is Decentralised Ownership in this Analysis? In this chapter, the main emphasis/argument is that decentralised mineral ownership has a positive impact on economic and social development of the country as measured by the human development index (HDI). There are three categories of ownership defined as decentralised: Claimant/landowner, Decentralised/mixed, and Customary/traditional landowners.

Table 5-1: Decentralised Ownership Countries

OWNERSHIP COUNTRIES Claimant/landowner Finland, Germany, Iceland, S. Korea, Latvia, Lebanon, Singapore, and Sweden

Decentralised/mixed Argentina, Australia, Austria, Belgium, Bosnia & Herzegovina, Canada, Greece, India, Switzerland, and United States.

Customary/traditional Nauru, Palau, Kiribati, Tuvalu, and Vanuatu landowners (See Appendix 5-1 for complete list of centralised and decentralised countries)

Sample Laws for Claimant/landowner:  Iceland: “According to section 3 of the Act, minerals belong to the property owner. Conversely, the state owns those minerals that are found on publicly owned lands” (Hojem, 2015, p. 42).  Latvia: “The subsoil and all mineral resources therein belong to the landowner” (Latvian Parliament, 1999).  Finland (and Sweden): “under the Mining Law, prospecting is considered to be a part of the so-called everyman's right, which is a special Nordic tradition, giving as a general rule public access to all land, public or private” (Kortman, 1996). There is really no owner until the minerals are located through exploration (res nullius in Roman law). Once minerals have been located, government charges a stamp-duty, and they must pay the landowner an annual concession fee and a reasonable annual mining fee.

These are all high-income countries with high HDI, except for Latvia and Lebanon.

Sample Laws for Decentralised/mixed:  Argentina: Title II, Article 124. “The original ownership over natural resources existing in their territory belongs to the Provinces.”  Austria:  “Bergfreie—For resources in this category, the holder of the mining license has ownership of those minerals in the deposit  Bundeseigene—the resources in this category are state-owned  Grundeigene—the resources in this category are owned by the owner of the land”  Belgium: No national mining law exists. The management of mineral resources is the responsibility of the regions (except for the continental shelf).

These countries have mixed jurisdictions where the landowner, claimant, states, provinces, and central government all have ownership under different circumstances and different conditions. Most of these countries also have high GDP levels and high HDI. These two categories of decentralised ownership lend support to the claims of Weinthal and Luong (2006) that private domestic ownership has better outcomes.

Sample Laws for Customary (traditional) landowners:  Tuvalu: “Nothing in this Act shall — prevent a Tuvaluan from taking…minerals from any land from which it has been customary to take such minerals” (Tuvalu Government, 2008).”  Vanuatu: “All land in the Republic of Vanuatu belongs to the indigenous custom owners and their descendants.” These are all Pacific Islands ranked as lower-middle or upper-middle income countries, so the finding of significance for the correlation between decentralisation and HDI does not depend on national income (GDP) in this case. It contrasts with the mostly upper income countries found in the first two decentralised categories, so adds robustness to the results.

Methods and Analysis

To examine the impact of decentralization on development outcomes the Human Development Index (HDI) is used as the key dependent variable because communal ownership couldn’t be used for reasons already stated; The sample sizes were too small, and the category doesn’t really exist at the national level. HDI is used as the dependent variable because it is a more complete measure of development compared to GDP, since it includes income, education, and life expectancy. HDI provides an alternative way to examine the performance of any country by including more knowledge which is insightful for policy analysis, with particular on economic and social disparities measurement among countries (Harttgen & Klasen, 2012). HDI begins with National Income per capita (GDP), but then adds life expectancy as an index of health, and expected years of schooling and mean of years of schooling to account for education (United Nations Development Programme, 2018).

199 countries’ constitutions and mining laws were reviewed and the sub-categories of ownership were recorded according to statements of ownership found in these legal documents (Appendix 4-2, column 3). Many of the categories were similar, so they were combined, and they naturally fell into the seven major categories of ownership listed in Table 5-1. A unique taxonomy of mineral ownership categories was therefore devised from these national mineral laws. The categories identified and used for analysis were: 1) No minerals, 2) President, 3) State or Crown, 4) People/common/communal, 5) Customary Landowners, 6) Decentralised/mixed, and 7) Claimant/landowner.

First, a multiple regression analysis was conducted using all ownership categories as exogenous factors to see the impact on HDI. However, due to small sample sizes the regression results turned out to be insignificant. Therefore, these six categories were then transformed into two categories as centralised or decentralised ownership (Table 5-1, column 2) (Flomenhoft, 2018). Table 5.1 summarizes the HDI for each category. Ownership types categorised as centralised included ownership by the President, state or crown, and people/common/communal (“communal”).

Although “communal” implies decentralised ownership, it was found upon further research that these statements in national mineral laws or constitutions were just rhetoric, and in practice were no different than ownership by the state. A referee for a

90 previous paper refuted the idea that “communal” ownership in Vietnam, for instance, meant anything other than ownership by the state (Flomenhoft, 2018). Review of the country report for Vietnam by the US Geological Survey supported this opinion (Fong- Sam, 2017). The nearly identical mean HDI score of “communal” and state/crown ownership added additional weight to this judgement.

Table 5-2: Summary of Mineral Title Regimes and HDI (Flomenhoft, 2018)6

Mean HDI Number Type of Ownership Category 2014 of cases No minerals n/a 0.748 7 President centralised 0.595 5 State/crown centralised 0.673 142 People/common/ communal centralised 0.683 19 Customary (traditional) landowners decentralised 0.651 8 Decentralised/mixed decentralised 0.851 10 Claimant/landowner decentralised 0.875 8 Total cases 199

5.6.1 Descriptive Analysis of Decentralisation Impact

Decentralised ownership may achieve benefits by distributing mineral governance and revenues more widely in society. To determine whether there is significant difference in HDI between the two categories, an independent samples t-test was conducted for equality of means between the centralised and decentralised country HDI data7. “The Independent Samples t-test compares the means of two independent groups in order to determine whether there is statistical evidence that the associated population means are significantly different. The Independent Samples t-test is a parametric test” (Kent State University Libraries, 2018). The UN classifies countries according to their HDI score into four categories. (United Nations Development Programme, 2018, p. 3):  Very High Development: HDI >.800  High Human Development: HDI = .700-.800  Medium Human Development: HDI = .550-.700

6 Corrected data 7 Analysis was conducted with SPSS software Version 25, 2017 (Armonk, NY).

 Low Human Development: HDI <.550

Figure 5-1: Independent Samples t-test graph

Difference of the Means-2014 HDI 1.00

0.90 0.805 0.80

0.70 0.673

0.60

0.50

0.40

0.30

0.20

0.10

0.00 centralized mineral ownership decentralized mineral ownership

Table 5-3: Independent Samples t-test results

Group Statistics Std. Std. Error Category N Mean Deviation Mean HDI 2014 Centralised 161 0.67283 0.152011 0.01198 Decentralised 25 0.80528 0.123874 0.024775

Independent Samples Test Levene's Test for Equality of Variances Sig. (2- F Sig. T df tailed) Equal variances assumed 2.137 0.145 -4.145 184 0.000 Equal variances not assumed -4.813 36.239 0.000

The difference between the two categories of ownership was .132 points and was statistically significant at the 1% (i.e., p<.001) level. Centralised ownership countries have a mean HDI of .673 which falls into the medium human development category. Decentralised ownership countries mean HDI of .805 falls into the very high human development category, two levels higher in the UN HDI scale. To provide an example of the importance of this difference, countries rated as medium level of development have an average life expectancy of 69.1 years, while countries rated as very high development have an average life expectancy of 79.5 years. A ten year difference in life expectancy is quite substantial. Many countries in the decentralised category belong to the OECD list.

The t-test statistics are useful to evaluate the mean differences of a variable between two outcomes. However, it does not provide a holistic picture to justify the HDI differentials between countries with centralised and decentralised mineral ownership. There could be numerous other factors that have direct and indirect impact on HDI differentials, which warrants further investigation. For this, in the next step, multiple regression analysis was used to disaggregate the influence of decentralised mineral ownership from these other factors of development, along with control variables such as gross domestic product (GDP), resources exports, and population. These variables capture the macroeconomic environment of the countries included in the analysis. The regression analysis was conducted in two steps and the results are discussed in the following sections.

5.6.2 An Econometric Analysis

The baseline model was created by introducing possible exogenous factors to study for their impact of these variables on development. Using the HDI as a dependent variable, many variables were tested in the multiple regression model for statistical significance. These included country income group, region, population, global competitiveness index, democracy score, corruption perception index, governance variables, gender ratio, metals and ores as % of total exports, natural resources as % of total exports, resource rents as % of GDP, resource revenue as % of government revenue, year joined EITI and EITI status. Country income groups are computed as high, medium high, medium low, and low by the World Bank Analytical Classifications

(presented in World Development Indicators), and is based on GNI per capita in US$ (Atlas methodology) (World Bank, 2019). Due to the lack of statistical significance or not enough data, the following variables were left out of the final analysis: metals and ores as % of total exports, resource rents as % of GDP, resource revenue as % of government revenue, year joined EITI, and EITI status.

The linear regression model can be described as:

H D I Xiii (1)

Where X i represent the set of exogenous variables accounting for economic, demographic, geographic, and governance factors, and i represents the vector of K 1 random error term, respectively.

 is the vector of coefficients for exogenous factors included in the analysis. The centralisation variable is of particular interest in this analysis, therefore decentralisation was introduced in the regression analysis. The estimable ordinary least square regression model is expressed as:

K HDIXCikkiii0  (2) k1

Whereas vector Ci represents decentralisation and  represents the corresponding coefficients to be estimated. In our final analysis, the variables chosen were economic factors including GDP, resource exports, competitiveness and income groups. Governance variables include the corruption perception index (cpi), and democracy score, whereas demographic factors are captured by including the gender gap and population size. Womens’ empowerment is often considered to improve development outcomes, therefore, the inclusion of this variable as an exogenous factor that could provide useful insights on gender differentials and its impact on HDI. Regional classification was used to investigate if region of the world is a significant geographical factor influencing HDI.

5.6.3 Instrumental Variable Approach to Overcome Endogeneity Issues

Decentralised mineral ownership (decentralisation in this analysis) is a governance factor. Therefore, it is expected that the governance variable may be dependent on several other factors, hence, make the estimation of causal effects challenging. There can be several factors (instruments) influencing the decentralisation decision in the countries of analysis, which requires resolving the identification issues. In other words, the results of OLS analysis may confound the relationship between variables, and due to enogeneity, the direction of causation becomes unclear. This endogeneity problem can be resolved by using instruments, which are correlated with decentralisation but uncorrelated with the error tem. Decentralisation is a multifaceted process and involves various fiscal, political and administrative angles both at national and local levels. The literature on decentralisation is growing both in economics and political science subjects (Alexeev & Mamedov, 2017; Arzaghi & Henderson, 2005). There are several institutional, governance, or economic factors that are considered to be the main drivers of decentralization. Therefore, estimation of the impact of decentralization on development outcomes is difficult due to endogeneity and omitted variables bias, which need appropriate instruments to estimate the impact of decentralization on development indicators. The identification strategy in this analysis follows the inclusion of various institutional governance, demographic, economic, and geographical factors to account for the variation in ownership impact on development to overcome endogeneity problem. To address the identification problem various factors including rule of law, control of corruption, democracy and government effectiveness are included in the analysis. The selection of valid instruments is a pre- requisite for predicting the impact of decentralization. However, these instruments cannot be correlated with unobserved variables affecting the development outcomes. Let Z be an instrumental variable that is correlated with C but uncorrelated with . i i i This variable can be used as an instrument such that:

CZi i i (3)

Where Zi is a vector of, m1,  is vector of parameters and i is a vector of error term. To ensure the identification of the casual effect of  from equation (2), assume that i) EZ(ii ) 0, and ii) EZC(ii ) 0. Now in the presence of instrumental variables,

95 unbiased estimates of the causal effect of decentralisation on HDIi can be obtained by implementing the above mentioned estimation strategy, which enable to obtain unbiased estimates of causal effects of exogenous variables on HDI.

5.6.4 Data Description

For the proposed analysis, the data has been drawn from different sources for 193 countries. The summary statistics are presented in Table 5.4. Inequality adjusted HDI (IHDI) would have been preferable as the dependant variable because it accounts for the overall loss to human development due to inequality (United Nations Development Programme, 2018). However, IHDI was only available for 150 countries, while HDI was provided for 187, so was a more complete set of data. HDI was used as the dependent variable, which has been obtained from the World Development Report 2014 available at the UNDP website. A significant variation was noted in HDI ranking among countries. For instance, it is the highest (0.944) for Norway while 0.348 for Niger. Population data comes from the World Bank Factbook. Resources exports as a percent of total exports were used as one of the exogenous variables in the regression analysis, which is also extremely variable from 0-100%. Competitiveness is from the World Economic Forum (WEF), and is defined as the “factors driving productivity, growth and human development in the era of the Fourth Industrial Revolution” (World Economic Forum, 2014-15). WEF defines “The Fourth Industrial” revolution as the convergence of the physical, digital, and biological worlds at an exponential rate due to information technology and artificial Intelligence (Schwab, 2016).

Transparency International (2014) publishes the corruption perceptions index annually. A higher score indicates lower corruption perception and data shows that North Korea has the lowest index (i.e., 8) and Denmark has highest index (i.e., 92). The Unified Democracy Scores (UDS) were developed by James Melton (University College London), Stephen Meserve (Texas Tech University), and Daniel Pemstein (North Dakota State University) (Melton, Meserve, & Pemstein, 2014). The gender gap ranking is obtained from the World Economic Forum (World Economic Forum, 2014), showing the highest score (.859) almost equality of genders in Iceland.

Governance indicators include Voice and Accountability (V), Political Stability/No Violence (S), Government Effectiveness (E), Regulatory Quality (R), Rule of Law (L), and Control of Corruption (C) (McMahon & Moreira, 2014). (V) means freedom of expression and ability to choose their government, (S) means likelihood of government instability due to violence, criminality, or terrorism, and (E) means the quality of public services, policy, and independence of government employees. (R) refers to government policies which support and encourage private sector development. (L) is an indicator of crime, as well as universal enforcement of property rights, and the honesty of the police and courts. Finally (C) refers to capture of the state by private interests and corruption at all levels of government. (World Bank Institute, 2009). These indicators are rated on a scale of -2.5 to +2.5. Regional and income classifications were used as dummy variables in the analysis (Table 5-5). In addition, included were correlation coefficients of independent variables, which are presented in the Appendix 5.2 The following table provides a summary of the all variables described above that are used in the regression analysis.

Table 5-4: Summary Statistics

Standard Variables List Mean Deviation Minimum Maximum Count Dependent Variable HDI 2014 0.693 0.155 0.348 0.944 187 Exogenous Variables Population 37341826 139898783 10081 1393783836 193 Resources % of Exports 22.08 26.79 0.00 100.00 149 Competitiveness 4.196 0.673 2.793 5.704 142 CPI 2014 43.11 19.89 8.00 92.00 172 Democracy Score 0.3524 0.8864 -1.9997 2.1531 188 Gender Gap 0.6921 0.0593 0.5145 0.8594 142 Voice and Accountability -0.04 1.00 -2.26 1.68 193 Government Effectiveness -0.07 1.00 -2.45 2.18 191

Dummy Variables Region-Europe and Central Asia Region-Latin America and Caribbean Region-Middle East/North Africa Region-North America Region-South Asia Region-Sub- Sahara Africa Income group: High Income group: Low Income group: Low-middle Income group: Upper-middle

5.6.5 Ordinary Least Square Estimates

The estimation of ordinary least square (OLS) is used as the base model. The estimates are based on data obtained on different variables from the sources mentioned in previous section. The objective of this base regression model is to examine the relationship between several social, economic, regional and governance factors on human development, with particular focus on mineral ownership. The OLS results are presented in Table 5.5 and Table 5.6. The regression estimates show expected estimates results. R-squared varies from 0.72 to 0.89 demonstrating a high explanatory value for the influence of these variables on HDI. Decentralisation of mineral ownership shows a significantly positive correlation with HDI in all estimated models, controlling for other variables. For instance, the coefficient 0.061 of the dummy variable (decentralised) in Model 4 shows that countries with decentralised mineral ownership explain/drive high HDI when controlling for other factors, varying

98 from 0.02 percent to 0.08 percent. This is consistent with the hypothesis that decentralised ownership is likely to result in more accountability to the public, while centralised government mineral ownership and receipt of resource rent, have been shown to result in less accountable government (What Ross calls the “rentier-state” theory of the resource curse) (Ross, 2012).

The coefficient of population shows a significantly negative relationship with HDI indicating that highly populated countries have lower HDI. This is expected as most of the countries with large population are developing economies such as India, China, Indonesia, Brazil, Pakistan, and Bangladesh, which are mainly in the “medium level of human development”. A few are in the “high level of development”, but none have reached the “very high level of development”. The only exception to that rule is the United States, which is the third most highly populated country in the world. Regional effects are introduced to overcome the heterogeneity and it was found that Sub- Sahara Africa (SSA) has a negative impact on HDI, which is statistically negative (see Model 1-10 in Table 5.5 & Table 5.6). This region is especially known for its harsh climate, poor governance, political conflict, and low human development. Similarly, South Asia (SA) shows a negative influence on HDI in nearly every model, which is also considered a region with chronic underdevelopment. SSA and SA have the lowest human development of all regions of the world (United Nations Development Programme, 2018, p. 3). Europe and Central Asia (ECA), by contrast, have a positive correlation with HDI in nearly every case. This might be explained by the fact that this region has the highest HDI of all regions, and includes the OECD countries in Europe, which have the highest HDI of all countries (United Nations Development Programme, 2018). However, North America and Middle East do not show a statistically significant relationship in most cases. Latin America and the Caribbean (LAC) had mixed results.

One of the most interesting findings directly related to the resource curse question is the fact that resources as a percentage of exports was favourably correlated with HDI in every model 1-10, and statistically significant in 7 out of 10 cases, controlling for other factors. This may appear to contradict the original resource curse hypothesis (J. D. Sachs, Warner, 1995). However, it is consistent with some previous findings. Pineda and Rodríguez (2010), for example, claim that natural resources are beneficial for human development, due to their positive effect on non-income components of

99 human development such as education and health. Hlavová (2017) studied the impact of natural resources on the HDI in sub-Saharan Africa and finds that high resource dependent countries have a positive correlation with HDI and low resource dependent countries have a negative correlation (Hlavová, 2017). Huang et al. (2014), found in a study of 30 Chinese provinces, that natural resource dependency as measured by percentage of workforce in mining had a short term positive effect on HDI, but overall negative effect from 2000-2011. Also, the resource curse literature relates resources to GDP growth, not the nominal GDP level. Resource exports contribute to GDP and therefore to HDI.

Several different variables are introduced in models 6-10 compared with 1-5, and statistically significant results are obtained in each case. The Competitiveness variable is positively correlated with HDI in one model and is statistically significant. A positive correlation is noted with HDI for the 2014 Corruption Perceptions Index, which is consistent with good governance being associated with countries that do not suffer the resource curse. Competitiveness is correlated with high GDP, and therefore high HDI.

The mean Unified Democracy Score (UDS) is found to be positively correlated with HDI, which is another indicator of good governance. A high score for the gender gap variable implies higher gender equality. High equality for women is correlated with higher literacy among women, which results in empowerment, and is correlated with better quality of life indicators such as lower infant mortality, and higher life expectancy among other factors (Reid & Shams, 2013). A positive relationship with HDI supports the argument that gender equality contributes to human development positively.

The other variables used in this analysis, include Voice and Accountability, Political Stability/No Violence, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. These variables have been used to account for governance. All variables turn out to be statistically significant and positively correlated with HDI, and results are presented in Table 5.5 and 5.6. Better governance is likely to result in more public investment in health and education, and a higher GDP, indicating that all these governance factors seem to contribute to higher HDI.

100

Table 5.5: Regression Results (Model 1-5)

Model 1 Model 2 Model 3 Model 4 Model 5

Decentralised 0.0290* 0.0213 0.0369 0.0612** 0.0758*** (0.081) (0.240) (0.105) (0.010) (0.002)

Log Population -0.0148*** (0.00122) (0.00571) -0.0110** -0.00908** 0.000 (0.719) (0.111) (0.014) (0.021)

Region-Europe and Central Asia 0.0575*** 0.0393** 0.0536** 0.0262 0.0780*** (0.001) (0.036) (0.017) (0.291) (0.001)

Region-Latin America and Caribbean 0.0249 (0.0149) -0.0403* -0.0668** (0.0204) (0.231) (0.478) (0.098) (0.015) (0.442)

Region-Middle East/North Africa 0.02200 0.00532 0.0481* 0.02100 0.01350 (0.313) (0.820) (0.087) (0.509) (0.664)

Region-North America 0.0463 0.0252 0.0560 0.0742 0.123* (0.294) (0.611) (0.361) (0.236) (0.079)

Region-South Asia (0.0303) -0.0910*** -0.115*** -0.118*** -0.131*** (0.319) (0.004) (0.001) (0.003) (0.001)

Region-Sub- Sahara Africa -0.107*** -0.195*** -0.212*** -0.254*** -0.227*** 0.000 0.000 0.000 0.000 0.000

Resources % of Exports 0.0233 0.0509** 0.0980*** 0.0207 0.0346 (0.244) (0.021) (0.001) (0.465) (0.250)

Competitiveness 0.135*** (0.000)

Corruption Perception Index 0.00392*** (0.000)

101

Democracy Score 0.0674*** (0.000)

Gender Gap 0.567*** (0.000)

Constant 0.381*** 0.577*** 0.784*** 0.556*** 0.877*** (0.000) (0.000) (0.000) (0.000) (0.000)

N 125 139 144 125 148 F 79.48 73.00 43.38 30.75 31.94 R-squared 0.8746 0.8508 0.7654 0.7295 0.6757 p-values in parentheses * p<0.10, ** p<0.05, *** p<0.01

Table 5-6: Regression Results 6-10

Model 6 Model 7 Model 8 Model 9 Model 10

Decentralised 0.0283 0.0242 0.0377* 0.0196 0.0295 (0.136) (0.126) (0.055) (0.236) (0.103)

Log Population -0.00079 -0.00480* -0.00604* -0.00176 -0.00068 (0.844) (0.074) (0.054) (0.504) (0.826)

Region- Europe and Central Asia 0.0363 0.0467*** 0.0359** 0.0439*** 0.0546*** (0.136) 0.000 (0.016) (0.006) (0.001)

Region- Latin America and Caribbean -0.0482* 0.0255* 0.000674 0.022 0.00877 (0.058) (0.093) (0.971) (0.217) (0.652)

Region- Middle East/North Africa 0.0499 0.0311* 0.0227 0.0181 0.0208 (0.126) (0.066) (0.266) (0.379) (0.343)

Region- North America 0.0516 0.0398 0.0375 0.0273 0.038 (0.114) (0.111) (0.263) (0.559) (0.161)

102

Region- South Asia -0.0980** -0.0327 -0.0520* -0.0557** -0.0691** (0.028) (0.212) (0.096) (0.041) (0.050)

Region- Sub- Sahara Africa -0.208*** -0.133*** -0.162*** -0.166*** -0.177*** 0.000 0.000 0.000 0.000 0.000

Resources % of Exports 0.0904*** 0.0573*** 0.0547*** 0.0702*** 0.0626*** (0.001) 0.000 (0.006) (0.001) (0.002)

Voice and Accountability 0.0750*** (0.000)

Government Effectiveness 0.0983*** (0.000)

Regulatory Quality 0.0868*** (0.000)

Rule of Law 0.0870*** (0.000)

Control of Corruption 0.0760*** (0.000)

Constant 0.740*** 0.770*** 0.805*** 0.735*** 0.726*** (0.000) (0.000) (0.000) (0.000) (0.000)

Sample size 148 148 148 148 148 F-Statistics 78.81 119.48 76.43 83.53 86.76 R-squared 0.7802 0.8901 0.8367 0.8591 0.837 p-values in parentheses * p<0.10, ** p<0.05, *** p<0.01

The decentralised variable is one of the key determinants of HDI in the regression analysis as shown in Table 5.5 and Table 5.6. However, decentralisation may not be determined exogenously. There may be several other factors that are conducive to the decentralised ownership process. For example, highly competitive economies and/or countries in high income groups may tend to have more private property rights, and

103 thus encourage landowner, claimant, or other forms of decentralised ownership. Countries with good governance such as high regulatory quality or low corruption perception might have less centralised mineral ownership, which often leads to corruption. These factors may be coincident with decentralisation, therefore, the endogeneity needs to be accounted for. To remedy this problem, an instrumental variable approach is used to obtain robust estimates of interest. These results are discussed in the next section.

5.6.6 Results of Instrumental Variables Approach

The primary objective of this analysis is to examine the impact of decentralised mineral ownership on human development, however, ownership is potentially linked to other variables. There many factors that are instrumental to determine the ownership status including rule of law, government effectiveness, democratic environment, and control of corruption. Considering the fact that decentralisation may have been determined by several institutional and governance factors, it thus violates the orthogonality conditions as a result of its correlation with numerous factors. These variables were used as instruments in the analysis to ensure that the endogeneity issue is resolved. The two stage least square (2SLS) method was used to estimate the model. Tests were conducted for the instruments’ validity and endogeneity hypothesis and results are presented in Table 5.7. The overidentifying restrictions test shows that the instruments are valid as all p-values are greater than 0.05. Similarly, the endogeneity hypotheses test are conducted for each model included in the analysis. The p-values of the Durbib-Wu-Hausman endogeneity test are reported in the last row of Table 5.7. The test statistics confirm that decentralization indicators are determined exogenously in the model.

Results estimates indicate that decentralisation has a significantly positive impact on human development across the countries. The income group dummies are included in the model to account for regional differences in economic development and results estimates show expected results. The “Low Income Group” category is considered as a reference group in the analysis. Significant differentials were noted across different income groups. The other factors such as competitiveness, rule of law and governance account for institutional, and resource governance. The estimated results show a

104 significantly positive impact on human development indicators. After taking care of endogeneity and instruments validity, the overall results estimates indicate that decentralised mineral ownership, as defined by the authors’ taxonomy, is one of the important factors in the determination of human development.

Table 5-7: Instrumental Regression Results

Model 1 Model 2 Model 3 Model 4 Decentralised 0.148** 0.118 0.0435 0.123** (0.022) (0.113) (0.250) (0.042)

Log-GDP 0.0326** 0.0552*** 0.0633*** (0.022) 0.000 0.000

High Income group 0.180*** 0.329*** 0.128*** 0 (0.000) (0.000) (0.000) (.)

Low-Middle Income group 0.0907*** 0.139*** 0.0697*** 0.0632** (0.000) (0.000) (0.000) (0.018)

Upper-middle income group 0.163*** 0.266*** 0.128*** 0.00014 (0.000) (0.000) (0.000) (0.993)

Competitiveness 0.0398*** (0.008)

Corruption Perception Index 0.00132*** (0.008)

Log (Population) 0.00376 (0.249)

Regulatory Quality 0.0276*** 0.000

Constant 0.112 0.352*** 0.117** 0.166* (0.178) 0.000 (0.043) (0.062)

Sample Size 139 167 179 179 Over-identification 0.2086 0.1339 0.4547 0.5370 Endogeneity (Roust F-test) 0.0016 0.0000 0.0002 0.0003

105 p-values in parentheses * p<0.10, ** p<0.05, *** p<0.01

5.3.8 Results Discussion Considerable research has focused on investigating the impact of resource development on economic growth and the approaches used in the analysis have not reached any agreement yet (Auty, 1991; J. D. Sachs, Warner, 1995; 1999). There is a great controversy around the resource curse hypothesis and researchers are trying to investigate whether resource dependency has a positive or negative impact on development and growth. Much of the negative impact is attributed to governance factors. A better institutional setup may help improve resource rich countries human development by utilising a decentralisation process. This study attempts to investigate how decentralised mineral ownership can impact on the human development index. Our results indicate that decentralised mineral ownership can contribute to better governance. An instrumental approach has been adopted to take into account the endogeneity issue resulting from institutional factors. The introduction of regional variables allowed the examination of regional disparities in resource rich countries socioeconomic development.

One of the debates about decentralisation is the question of private control of resources. Luong and Weinthal (2006) contend that better governance including transparency, accountability, and oversight that are mainly lacking in the developing world, can be overcome by private domestic control of minerals. Brätland (2012) evaluates private domestic control and finds that the private surface landowner hampers the decision-making of the extractive enterprise in their use of capital. Although not answering this question specifically, the findings of this analysis do support decentralised ownership such as private domestic control.

Good governance and decentralised ownership of minerals are highly correlated, but the question remains as to which is the cause and which the effect. Although this study does not directly answer the question, it can be inferred that governments with high levels of corruption will want to retain exclusive ownership of minerals at the centralised level in order to reap the revenues and resource rent, without accountability to the citizenry (the rentier-state). This analysis has shown that controlling for governance factors, decentralised mineral ownership has better

106 outcomes as measured by the HDI. So independent of governance factors, decentralised ownership can be recommended as a best-practice in government mineral legislation and policy.

Conclusions

This analysis aimed to examine the impact of decentralised mineral ownership on the development outcome. An original taxonomy was created for mineral ownership worldwide. HDI for every country was found, and mean HDI for each category was calculated (Table 5.2). Looking at the mean provided some insight into the correlation between ownership and the HDI. For example, countries with no minerals have a higher mean HDI than countries with state ownership, providing some evidence of the resource curse.

The next step was to perform a regression analysis using HDI as the dependent variable and ownership category as the independent variable, but this did not obtain statistically significant results, since the sample sizes were too small. Therefore, categories were combined to form a group called centralized ownership, and a separate category for decentralized ownership. First the means were compared, using a t-test, and the decentralized category was found to have an HDI of 13 points higher than the centralized category, and the results were statistically significant. Simple mean differentials (t-test) may not provide a holistic picture to justify the HDI differentials between centralized and decentralised economies. Therefore, the impact of ownership needed to be disaggregated from other factors. A multiple regression and instrumental analysis was performed to analyse the impact of decentralised mineral ownership on the Human Development Index, controlling for other economic, geographic, regional, and governance factors. Findings support the concept that decentralised ownership of minerals provides better outcomes as measured by the HDI controlling for other factors. This is consistent with the conceptual framework in section 3.13 based on HDI being dependent on the system of ownership as influenced by governance and other factors.

107

The favourably significant impact is noted of ownership and other exogenous factors on HDI. This has important implications for the analysis of the resource curse. It lends support to the principle of subsidiarity, that mineral governance and revenue should be managed at a decentralized level. This goes against the primary current method of governance for 143 out of 199 countries, which allocate mineral ownership to the centralized state. It provides evidence for research question B about what type of mineral ownership provides the best development outcomes. Although the superiority of any specific ownership type such as individual, or claimant could not be proven, statistically significant evidence was found that decentralized ownership provides for better results as measured by the HDI. The levels of ownership analysed in the decentralised category included sub-state, provincial, municipal, individual, claimant, communal, traditional owners, etc. A limitation of this analysis is that all these categories had to be aggregated to get meaningful results. With more data or perhaps longitudinal analysis, the findings might be further refined to disaggregate the results of different levels of ownership in the decentralised category.

108

6 Chapter Six: Communal Land and the Attitudes of the Bafokeng on Benefits from Mineral rights Published in South African Journal of International Affairs, Volume 26, Number 2, Johannesburg, South Africa, June 2019,

Introduction The Bafokeng people, now known as the Royal Bafokeng Nation (RBN), have occupied their communal land – here defined in contrast to private freehold land8– amounting to 1400 square kilometres in the Rustenburg area of Northwest Province in South Africa for several hundred years. The European system of individual land ownership and legal titles was introduced in the mid 1800’s following the settlement of Europeans in South Africa. The Bafokeng and other traditional communities were forced to adapt to this system and acquire legal titles in order to retain their land. This institution of private property was ill-suited to Bafokeng communal culture; it has been an endless source of trouble since it was introduced 150 years ago. A series of major ongoing disputes (some successfully won) arising from subgroups, syndicates, families, and individuals asserting historical title to the land, contradict the ‘tribal’ authority, which claims all land is collectively owned under the authority of the kgosi (chief or king). Within this question of land ownership is also the question of mineral rights and mining benefits. This article explores the role of communal property ownership by the Bafokeng in capitalising on the benefits of mining, and evaluates community members’ attitudes towards those benefits.

Along with the question of land ownership, mineral ownership is a contentious question in South African society – a society which has been characterised by inequality and dispossession for generations. As F.T. Cawood and R.C.A. Minnit note with regard to South Africa’s mining sector, “The issue of mineral rights ownership is at the heart of the policy debate. The holder of mineral rights, as the possessor of the title, is entitled to some form of compensation when minerals, covered by these rights, are removed or depleted by another party” (Cawood & Minnitt, 1998).

8 Communal land or title: A system of land use rights (usufruct) administered by a community governance system, which can include private occupancy, collective ownership, individual and family land rights, but traditionally did not allow alienation or sale. Communal land transactions occur through social relations, and freehold (private) land transactions take place through market transactions.

109

Over the entire period from 1868 to the present, the Bafokeng registered most of their surface land titles on a collective basis under the authority of the chief, since Europeans recognised only the chief as representative of the “tribe”.9 According to the tradition of Roman-Dutch law which pertains in South Africa, as the holder of titles to their surface land, the Bafokeng were entitled to ownership of sub-surface minerals as well. However, that right has been eroded in South Africa, as in most countries, with the result that sub-surface minerals now legally belong to the state.

In particular, the Bafokeng’s rights to the minerals in the ground were usurped by various entities over a period of 130 years until they won a landmark court settlement in 1999 from South African mining firm Impala Platinum (Mbenga & Manson, 2010, p. 151). The struggle by the Bafokeng to retain their property rights from the 1870’s to nearly 2000, through continual legal advocacy in the courts, culminated in that victory through which the Bafokeng were ultimately able to enforce their land titles and obtain mineral royalties and mining company shares. The 1999 settlement granted the Bafokeng royalties of 22% of Impala Platinum taxable income and one million shares on all Bafokeng areas where Impala mining took place (Mbenga & Manson, 2010).

Due to receipt of royalties, corporate equity shares and creation of their own mining corporation – Royal Bafokeng Platinum (RBPlat) – as of 2017 the Bafokeng had accumulated a sovereign wealth fund of US$2.27 Billion (R32.1 B), which they manage with their financial company Royal Bafokeng Holdings (RBH) (Royal Bafokeng Holdings, 2017, p. 19). The Royal Bafokeng Nation Development Trust (RBNDT) as the sole shareholder of RBH allocated earnings of US$50.3 Million (R601 M) in 2015-2016 to economic and social development of the local population (Royal Bafokeng Holdings, 2016, p. 48). Development had been conducted from the mid 1990’s using the Vision 2020 Plan under the previous king, Kgosi Lebone II. The current king, Kgosi Leruo Molotlegi, took power in 2000, and established the Vision 2035 plan (Bekker, 2017). This plan directs resources to the economy, education,

9 The term ‘tribe’ was a European settler colonial term used to refer to a traditional community that is culturally or ethnically affiliated. In the Setswana language this is referred to as ‘morafe’ or simply community.

110 workforce development, quality of life, transportation, infrastructure, and traditional culture and heritage. There is a sizeable literature about the Bafokeng, both as a success story and as an example of a “rentier chieftancy”. Some call them the “Richest Tribe in Africa” (Manson & Mbenga, 2003, pp. 25-47), others report the relative success of the Bafokeng in obtaining their land and mineral rights (S. E. Cook, 2013, pp. 61-66) and their landmark settlement with Impala Platinum in 1999 (Manson, 2013, pp. 409-423). These articles summarise the complex legal battle undertaken by the Bafokeng over many decades to retain title to their land and minerals, and obtain payment from mining companies. The history of mining law in South Africa is covered in detail by Cawood and Minnitt (1998, pp. 369-376) and by J. S. Bergh (2005, pp. 95-115). Susan Cook explores the contradictions inherent in the corporatisation of a traditional community, and considers tensions between infrastructure spending by the administration as contrasted with the immediate financial needs of the community (Susan E. Cook, 2011, pp. S151-S159). She also looks at the Bafokeng Nation as a hereditary patriarchal monarchy, a tax exempt organisation, and a universitas persona (S. E. Cook, 2013, p. 63). Gavin Capps introduces the concept of “tribal-landed-property” and explores the concept of the ‘rentier chieftaincy’ in acquiring Ricardian ground rent from mineral resources. He demonstrates the adaptation of the Bafokeng to changing mining laws and their retention of benefits by acquiring mining company shares when the South African Government claimed ownership of all minerals in 2002 (Capps, 2016, pp. 472-473). In addition, two popular books tell the Bafokeng story: People of the Dew (Mbenga & Manson, 2010), and Mining the Future (Totem Media, 2011).

The motivation for the study underlying this article was in part based on a question from Susan Cook: If the benefits are collective, how is the effect on individuals measured? What, specifically, constitutes evidence of service delivery and equitable distribution of communal resources? Is it the annual budget and spending priorities of the nation? Is it anecdotal feedback from the community members as they represent themselves to kgotha-kgothe and increasingly to the media? (Susan E. Cook, 2011, p. S156) To answer Cook’s question, a survey was conducted among the Bafokeng population. Community members were surveyed about their opinions on communal property and

111 benefits received from investments by the Royal Bafokeng Holdings (RBH), proceeds intended mainly for community services and infrastructure. Budget and spending priorities were obtained and compared to community preferences.

Methodology and structure of analysis This study employed several different methods. First was the historiography of communal property ownership and the context of the constantly changing legal environment to which the Bafokeng had to adapt. A detailed oral history was obtained from the Royal Bafokeng Administration legal staff, which was recorded and transcribed, providing great detail. Other members of the community including traditional and hereditary leadership were also interviewed. Legal history was also obtained from the literature to verify and confirm the agreement of oral and written histories. Second, face-to-face surveys were conducted with 493 community members, involving a written questionnaire, to obtain information about their attitudes on communal ownership and their perception of benefits received from spending by the RBA on development. Third, a tabulation and summary of these findings were completed in order to understand in detail the factors leading to satisfaction or dissatisfaction with benefits received. Fourth was a simple statistical analysis demonstrating the significance of primary factors identified in the survey leading to satisfaction or dissatisfaction with development spending. Finally is a summary of findings.

History of land law in South Africa The history of how the Bafokeng came to acquire title rights to their land is well established (S. E. Cook, 2013, pp. 61-66). However, before exploring the role of communal title in garnering the benefits of mining for the Bafokeng, and the villagers’ perceptions of those benefits, a brief review of land law in South Africa is called for. The first and crucial point is that when the Dutch colonised the South African Cape in 1652, the Roman-Dutch legal system was imported from Holland (Cawood & Minnitt, 1998, p. 370). According to that system, under the ad coelum doctrine the owner of surface land owns the minerals below as well. When British rule began in 1806, that legal system was initially retained (Cawood & Minnitt, 1998). In 1836, following the Groot Trek by the Boers into the interior, the Republics of the Transvaal, Orange Free State and Natal were created, all retaining the rights to mine various minerals including

112 coal, gold, silver and precious stones; private ownership of minerals was not challenged (Cawood & Minnitt, 1998).

Upon the arrival of the Boers in the Rustenburg region, the Bafokeng and other local communities such as the Bakatla Ba Kgafela and Bapo began to interact with the Europeans and the European land title system for the first time. The Boers drove out the Khumao Ndebele people led by the Zulu warrior Mzilikazi, who had invaded the area in an era called the ‘difakane’ (scattering) (Mbenga & Manson, 2010, p. 16). The Boers then claimed the region by right of conquest and settled the area starting in 1839 (Bergh, 2005, p. 100). After numerous battles with the British, the Boers were granted the right to govern the Transvaal region in 1852 and named it the Zuid- Afrikaansche Republiek-ZAR (South African Republic or Transvaal Republic). The Boers then divided the land into magisterial districts, and granted all property rights to themselves, under a resolution in June 1855 which stated:

No one who is not a recognized burgher (Afrikaner citizen of a Boer Republic) shall have any right to possess immovable property in freehold…All colored persons are excluded herefrom, and the burgher-right may never be granted or allowed to them (Totem Media, 2011, p. 33).

From this point on, the Bafokeng were legally excluded from owning their own communal land. However, Hendrik Potgieter, a leading white settler, reportedly reserved some farms for the Bafokeng due to their assistance in fighting other local populations such as the Ndebele. It is also widely agreed that Paul Kruger, a neighbour of the Bafokeng, cooperated in some manner with the chief (kgosi) at the time named Mokgatle, urging the Bafokeng to secure their land by registering titles according to European law (Bergh, 2005, p. 106; Susan E. Cook, 2011, p. S152). Having always held communal land, the concept of freehold land titles was alien to the Bafokeng, but Kruger convinced them to purchase the titles to their land starting in 1868, in order to retain their rights (Royal Bafokeng Administration, 2018). This was not entirely a benevolent action, as the Boers claimed ownership by dint of superior force and no other reason, and certainly benefitted financially; the Bafokeng were required to purchase the land from the Afrikaners who now held title to it.

113

Since Africans were forbidden to own property during this time in South Africa, the role of the Lutheran Church as a proxy to hold communal land became crucial. Lutheran Missionary Christoph Penzhorn had been invited to build a mission in Phokeng in 1867, due to the desire of Kgosi Mokgatle to educate his people in reading and writing – a service offered by the church (Totem Media, 2011, p. 35). To assist the Bafokeng, Penzhorn arranged for Bafokeng land titles to be registered in the name of the Hermannsburg Missionary Society. Later, after legislation changed, land titles were held in trust by the Superintendent of Native Affairs, the President of the South African Republic (or the Transvaal) (Manson & Mbenga, 2003, p. 25), or the Bophuthatswana Homeland Government. During this entire period of colonialism and segregation, two factors worked in favour of land titles being registered in the name of the chief. First the colonial authorities required that any group of six or more “natives” must register land as a member of a “tribe”, and second the claim could only be registered in the name of the chief of that ‘tribe’ (Capps & Mnwana, 2015).

According to oral and written history, Bafokeng men went to work at the Kimberly diamond mines from 1868 until about 1911 to raise money for collective land purchases registered in the chief’s name. Since this was a 40-year project, community members of different generations contributed, and some members went to the mines as many as three times (Royal Bafokeng Administration, 2018). This was a communal venture enabling the Bafokeng to retain their land. Throughout the 20th century, however, these rights were eroded, as noted above, and the Bafokeng were forced to fight in the courts to keep their land and share in the proceeds from the platinum group metals (PGMs) that were mined on their land. According to Capps, ‘the “tribe” itself was legally defined as a universitas personarum: a corporate individual with the capacity to acquire property rights, enter contracts and incur obligations via its chief, subject to the administrative authority of the state trustee’ (Capps, 2016, p. 470). It is the view of this author that the Bafokeng could not have continued their long campaign for their land without their communal governance structure and the pooled resources of the community.

Ironically, Penzhorn may have contributed to the long-running land conflict at the same time. Several members of the community who served as church elders in the Lutheran Church who reportedly purchased land for themselves separate from the chief’s

114 administration, were also given the opportunity for that land to be held in trust by the missionary society. This contributed to current land disputes, as descendants of those parishioners, according RBA oral historians, are perceived as being wealthy from mineral royalties, generating envy in the community (Royal Bafokeng Administration, 2018, p. 35). Penzhorn’s actions also contradicted the claim by the chief that all land was purchased collectively. Furthermore, accounts indicate that Penzhorn also registered land under the individual names of the chief, relatives of the chief, village headmen, and others as documented in the legal history below.

There are reliable accounts that validate the claims that some land titles were bought by individuals, families, sub-groups or syndicates and thus that not all land was collectively purchased. For instance, an account by J S Bergh states (Bergh, 2005, p. 108): It would seem that the money brought back by Bafokeng men from the diamond fields (and later gold fields of the Witwatersrand) also enabled other individuals in the Bafokeng community to participate in buying back land. For example, in December 1906 Petrus Mokgatle testified before the Native Location Commission that the farm Zanddrift No. 82 ‘belongs to me personally and alone. I paid £600 for the farm.’ In the case of Haakbosch No.79 kgosi August Mokgatle testified that his grandfather Mokgatle Thethe had bought it for his sons Abraham and Dick—presumably with money they provided. The farm Bierkraal No.120 was bought by four Bafokeng kraals, Tweedepoort No. 283 by the ‘petty chief’ Charlie Molisaking and two others, and Turffontein No. 302 by the ‘petty chief’ Hlage and his following. Bernard Mbenga and Andrew Manson (Mbenga & Manson, 2010, pp. 87-88) report the same phenomenon: Among the Bafokeng, the purchase of land by groups and individuals, though rare, seems not to have been completely non-existent. In January, 1911 Reuben Mokghatle, James Mokhatle, and Titus Mathuloe jointly bought a portion of the farm Uitvalgrond 34…Kgosi Mokgkatle and a group of 167 Bafokeng attempted to buy Welbekend 738…another group of 250 Bafokeng…led by a certain Jeremiah Liyoe, attempted to buy the same farm. In August 1932 Andreas Sepi bought Portion ‘E’ of Kookfoentein 337…In 1908 there was dispute between village chief Modiwsakend Petlele with 24 followers

115

against the tribal claims of Kgosi Molotlegi. Shortly afterward Paulus Khunou claimed his predecessor and 22 other residents had rights to Klipfontein farm no. 538. With the introduction of individual freehold land titles, individual and group competition for land ownership began, at times resulting in conflict. Communal land disputes were traditionally settled within the traditional governance system. By acquiring land titles, individuals, groups, or syndicates could now appeal to the outside authority of the South African judicial system, bypassing traditional governance and leadership structures to conduct market transactions. In two court cases in 2011 and 2013 regarding the Bakgatla ba Kgafela and Bapo ba Mogale communities, the courts have interpreted customary law as, by default, deferring to the power of the chief, and have denied land rights groups the standing that would allow them to sue for their rights, assigning punitive costs to community leaders who brought the cases to court (Claassens & Boyle, 2015).

The early Bafokeng land purchases comprised 20% of all land purchases by traditional African communities in the Transvaal region (Bergh, 2005, p. 115). The Bafokeng received small payments from mining companies as early as the 1920’s – although at about 20c per hectare (Royal Bafokeng Administration, 2018), these amounted to very little. When the South Africa Native Affairs Department was deciding on mining concessions in 1926, the Bafokeng had no authority despite being the legal landowners (Mbenga & Manson, 2010, p. 107). Some Bafokeng areas are still being mined under surface rights contracts (Royal Bafokeng Administration, 2018). There were many court cases in the 1970’s as Impala Platinum refused to disclose their mining production volume underground. Those revenues paid to the Bafokeng starting in the 1970’s were earmarked for development.

From the time they first received revenues in the 1920’s, the Bafokeng were managing mining royalties and mining company shares collectively through their community governance system. When the Bafokeng acquired shares in 1999 and formed a holding company to invest them, the management of the funds was established on the basis of corporate governance. The Bafokeng formed Royal Bafokeng Platinum (RBPlats), a mining company with its own management, and a holding company to manage all the investments from mining royalties and shares (Royal Bafokeng

116

Holdings-RBH). The financial management of RBH was set up in the standard corporate format with a board of directors and operating executives, a format foreign to most community members (Susan E. Cook, 2011). The RBN Development Trust is the sole shareholder of RBH, and has a democratic structure which chooses how to spend those funds. That is the connection between the corporate investment fund and the Bafokeng government, which allocates the funds.

Survey overview and results In February 2018, the author worked with a team to conduct a survey among the Bafokeng people by going door-to-door in the community and also to their meeting places during five sequential weekdays. Local translators/interlocutors were hired who were residents of a village in the area. The survey was in two parts: In part one the surveyors asked residents about ownership of minerals, in order to determine their awareness of mineral laws both in South Africa and in their region. In part two, the question was whether they perceived benefits from the Bafokeng’s communal mineral ownership and spending priorities. The purpose of the survey was to measure the Bafokeng community perceptions about the RBN governance system and whether it has remained intact since moving into the era of corporate financial management. In the course of the study, 493 surveys were completed with members of 124 clans, from 24 out of 29 villages in the Bafokeng territory. This comprehensive sample encompasses nearly every clan and village within the territory. Bafokeng people self- identified as members of clans and villages; 85.8% identified as Bafokeng (Mafokeng) while 5.7% were not and 8.5% were indeterminate; 45.4% were female and 54.6% male; and 69.6% were single, 23.3% were married and the rest were divorced, widowed or held another marital status.

Out of a labour pool of 472 people, 56.4% were unemployed and 43.6% were employed full-time, part-time or were self-employed. The labour force was defined to include everyone who was not a student or pensioner. Repondents were not asked if they had given up looking for work. These are referred to as ‘discouraged’ workers in unemployment statistics (Research Unit: Royal Bafokeng Aadministration, 2016, p. 7). The perception created by the pool of respondents was that everyone would have preferred to be working. Therefore, discouraged workers were not left out as in many unemployment statistics. Occupations most often cited included mining (22.8%),

117 cashier, cleaner, and security guard (11% each), and merchandiser, general worker, teacher, nurse, director (6% each). The employment figures may have been skewed by the fact that the survey was conducted during weekdays, when employed people were likely at work and thus not at home in the villages. To mitigate this weakness in the survey data, some surveys were conducted during evenings, and over a weekend. Employed people were generally more positive about the benefits received from mining, so the results must be considered in this light. The Bafokeng Population and Use of Land (PULA) audit in 2016 had an unemployment figure of 49.3% including discouraged workers, so the difference was less significant than one might expect from a weekday survey (Research Unit: Royal Bafokeng Aadministration, 2016, p. 7).

The Bafokeng area population at the time, according to the PULA audit, was 128,900 (Research Unit: Royal Bafokeng Aadministration, 2016, p. 1), including informal settlements. Using a survey size calculator it was found that for a population of 128,900, a confidence interval of 95% with a +-5% margin of error can be obtained with a sample size of 384 (FluidSurveysUniversity, 2018), which this study surpassed.

6.4.1 Ownership Survey Three questions were asked in order to ascertain people’s understanding of mineral ownership laws (see Table 6-1), both in the Bafokeng region as well as in South Africa in general. Owing to the constantly changing nature of laws governing mineral ownership, these questions were intended to evaluate political awareness among members of the Bafokeng public about mineral laws, since those affect their welfare so significantly. The first question was an attempt to determine if respondents were aware of current mineral ownership laws in South Africa. The second question attempted to ascertain their opinions about current ownership rights to minerals within the Bafokeng territory. The third question was an aspirational one. It attempted to determine who respondents thought should be the rightful owner of the minerals in the Bafokeng territory, regardless of law. Table below summarises the results.

Table 6-1: Bafokeng Ownership Survey

118

1. In South Africa 2. In the Royal generally who Bafokeng Nation owns the who owns the platinum mineral platinum mineral 3. Who should resources (in the resources (in the own the platinum in ground) from the ground) from the the Royal Bafokeng following list? following list? Nation? RBN/tribe/community 13.6% 26.2% 71.2% Kgosi (king) n/a 48.3% 14.4% Tribe & Kgosi n/a 5.7% n/a National government 50.3% 4.1% 8.7% President 5.1% n/a n/a Corporations 18.1% 9.9% 2.8% Corporations and tribe 4.9% n/a n/a Individuals 3.2% 3.2% 0.6% Other 4.1% 2.0% 0.0% Blank or do not know 0.8% 0.6% 2.2% 100.0% 100.0% 100.0%

Since the mining law of 2002 was passed, the South African government claims ownership of all minerals in the country. Of the respondents to question 1, 50.3% answered this ownership question correctly, demonstrating awareness of current laws affecting them. Only 13.6% believed that ‘tribes’ had ownership of minerals, and 18.1% named the mining corporations as owners.

In responding to question 2, only 4.1% of respondents correctly identified the South African government as the legal owner of the minerals in the Bafokeng territory, as is the law for all of South Africa since 2002. Since ownership has been in dispute for 150 years, it is not surprising to have this response; respondents may believe the new mining law of 2002 may not be the last word. It has allowed transitional arrangements where communities with traditional ownership have continued to receive royalties and ownership shares (Claassens & Boyle, 2015). However, only 26.2% identified the community or ‘morafe’ as the legal owner; 48.3% of respondents identified the kgosi or chief as owner. This perception may just reflect that historically their land was held in trust in the name of the kgosi, or it may reflect current feelings about governance, as many people feel that decision-making has become centralised, as revealed by the surveys.

119

Figure 6-1: Question 3: Who should own the platinum in the Royal Bafokeng Nation?

The results for question 3 were definitive, as seen in Figure 6-1. The Bafokeng evidently have a strong sense that the community is entitled to the minerals on their land. Among respondents, 71% stated that the community, rather than the national government, is entitled to own the minerals; 85.6% felt that the minerals should belong to the community or king; only 9% believed the national government should own the minerals.

Several factors might explain why the Bafokeng feel so adamantly that the minerals should belong to them, not to the state. For one, this community purchased the land with hard-earned funds earned over years of working in the diamond mines and on white farms. Second, there were the long legal battles to obtain proper compensation for minerals mined from these lands. Furthermore, there is the lack of services provided by the state, and hardships associated with this long history. The difference between the number who perceive there to be current ownership by the community (26.2% of those surveyed) and the number who believe the community should own the minerals (71.2% of those surveyed) may explain some of the dissension about current management of mineral revenue, revealed by further survey questions as reported below.

6.4.2 Benefits survey Next, the survey asked whether people believed they were benefitting from services provided by the Royal Bafokeng Administration (RBA). This is the crucial question at the heart of the survey, and attempts to answer part of Sue Cook’s question about

120 whether the Bafokeng perceive they are benefitting from platinum on their land. The question (4a) was set up on a Likert scale (Wilson, 2013, p. 67) of five choices, from strongly agree to strongly disagree. For an overview, see Figure 6-2.

Figure 6-2: Question 4a: Do the RBA Services benefit you or your family?

Summarising the results, 22.7% agree or strongly agree they benefit from RBA services, 51.3% disagree or strongly disagree, and 25.8% were neutral. 77.1% of the people do not think they are benefitting. That means that the number of people who felt they were not benefitting were more than double in number compared to those who felt they were benefitting. Strong opinions were heavily weighted against satisfaction with RBA services, with 19.9% strongly disagreeing vs 2.2% strongly agreeing; that is a ratio of nearly 9 to 1.

The next question (4b) was designed to help clarify why respondents felt they benefit (or do not benefit) from RBA services (See Appendix 6-1). A summary of the responses follows.

Summary of favourable responses The reasons of those that agree that they benefit from the BFA are represented below (see Figure 6-3 and Figure 6-4).

121

Figure 6-3: Benefits Survey Results-Strongly agree (11/493)

Benefit Survey-Strongly Agree- Reasons Given

Community Benefits 36% Personal Benefits 64%

Figure 6-4: Benefits Survey Results-Agree (101/493)

Benefit Survey-Agree-Reasons Given

Blank employmen 6% t 17%

infrastructur e…

Community Services 51%

Those who agreed or strongly agreed they were benefitting from RBA services comprises only 22.7% of the total. They perceived personal or community benefits such as infrastructure, education, bursaries for their children, or if they were employed. Some of the services or infrastructure listed were schools, education and training; health care; bursaries; security and police services; service delivery for basic needs; and sports. It is noteworthy that 63.6% of those who strongly agree they are benefitting from RBA services received personal benefits, though we can see from other responses that these benefits are very unequally distributed. Some of the personal benefits cited were jobs, houses, bursaries, RDP housing, water and electricity.

122

Summary of neutral and unfavourable responses The neutral responses are summarised in Figure 6-5, below, whereas the responses of those who disagree or strongly disagree that there are benefits accruing to them from minerals mined from their territory are in Figure 6-6 and Figure 6-7.

Figure 6-5: Benefits Survey Results-Neutral (127/493)

BENEFIT SURVEY-NEUTRAL-REASONS GIVEN

Blank 8% Services lacking 16% some services 39% management 12%

unemployment 25%

Figure 6-6: Benefits Survey Results-Disagree (155/493)

123

Figure 6-7: Benefits Survey Results-Strongly Disagree (98/493)

BENEFIT SURVEY-STRONGLY DISAGREE- REASONS GIVEN Mines Poor conditions 1% 13% Poor Services 23%

Bad management 28% unemployment 35%

Those who were neutral, disagree, or strongly disagree they benefit from RBA services comprised 74% of the total survey population, or just under three-quarters of the population surveyed. Many of their reasons were similar. One noticeable trend is the impact of employment on people’s answers. Four out of five sets of responses showed employment or unemployment as an important factor, and the two set of responses under the dissatisfied category both listed it as the most important aspect. Those who were neutral listed unemployment as the second most important factor in their responses. With an unemployment rate of 56% among those surveyed, these responses are understandable. The poor quality of services or services lacking were the second most common complaint. Despite significant expenditures on services and infrastructure by the RBA, many Bafokeng still live in corrugated iron shacks with no indoor plumbing and a lack of other infrastructure such as paved roads. Some complained that services such as schools or health clinics were too far away, and that transportation was lacking. The second or third complaint in each case was bad management on the part of the RBA. Note that less than 3% of respondents, in any of the figures above, named problems with the mines as the issue. However, unemployment was highly related to the mines, as a major complaint was the dominance of foreign workers occupying jobs; it is evident that these factors overlap somewhat.

Sonwabile Mnwana’s work from 2014 provides a backdrop for these findings. He acknowledged the benefits of infrastructural developments within the Bafakeng and

124

Bakgatla Ba Kgafela territories, such as in Phokeng and Moruleng, but notes discontent at the community level due to what he calls ‘infrastructure fixation’ and a neglect of human developmental issues such as food security and economic empowerment. He concludes that failing to give effective voice to the people through the governance system engenders further discontent with the administration (Mnwana, 2014, p. 834).

Bad management was listed as a factor by those responding as neutral or dissatisfied. Of the 98 people who were most dissatisfied, bad management was listed by 28.3% of respondents as the most important reason. Only unemployment (35%) was listed more often by the most dissatisfied respondents. This will be explored in more depth below, by comparing RBA budget allocations with preferences respondents listed.

Before turning to that task, it is important to note that one element lacking in the revenue structure of the arrangement with RBA is the lack of any apparent tax contribution by the Bafokeng population to the RBA budget; it appears that the entire budget comes from the return on RBH investments. While this matter is outside the purview of this study, it is worth noting that the payment of taxes to a government administration is claimed to hold officials more accountable to the wishes of the public (Claassens & Boyle, 2015). This element of contribution and accountability appears to be lacking in this community.

RBA investments and expenditures, and the budget survey The community survey on the RBA’s management of funds is enlightening. As noted earlier, Royal Bafokeng Holdings (RBH) had a net asset value of US$2.27 Billion (R30 billion) in 2016, and investments generated a return of US$50.3 million (R601 million). This was to be used for development. In 2010, they diversified from about 80% in minerals to about 15% today with most in financial assets. This avoided the volatility in the platinum sector, and reversed losses after the 2008 GFC. According to the RBH Integrated review of 2016 (Royal Bafokeng Holdings, 2016, p. 48), the budget was divided into several categories (see Table 6-2). The next survey question asked how the Bafokeng would allocate the RBA budget using those same categories. Their responses are tabulated below (see Table 6-3). By combining topics to create similar

125 categories, a comparison between the community’s preferences and the RBA budget could be made (see Table 6-4).

Table 6-2: RBA Expenditures 2016 Item % Expenditure in Expenditure in SA Rand US Dollars (millions) (millions) Infrastructure 43% R258.43 $21.5 Education 30% R180.3 $15 Security 12% R72.12 $6 Health and Social development 8% R48.08 $4 Sport 7% R42.07 $3.5 SMMEs (part of social (.62%) R3.75 $.312 development) Total 100% R601 $50.3

6.5.1 Summary of Responses and Comparison to RBA Budget One of the noteworthy results of this set of survey questions is the small number of people who advocated direct distribution of some or all revenue directly to families or villages (2%). This is consistent with the findings of Cook and Hardin, “But rather than push for the right to claim their share of the community’s wealth in cash, most Bafokeng adhere strongly to the paternalistic model by which their long-term survival and needs will be catered for by the kgosi and his administration” (S. Cook & Hardin, 2013, p. 234).

As evident in Table 6-4, there were differences between the spending preferences of the populace and the administration on infrastructure, education, and health and social development. These findings are generally consistent with Mnwana’s (Mnwana, 2014). The public wants less spending on infrastructure and education, and more spending on social services and employment.

Table 6-3: Bafokeng Budget Survey Q5. How would you allocate the RBN budget?

126

Budget item Totals % Infrastructure 264 22.9% Education/training/schools 223 19.3% Jobs/employment/business development 203 17.6% Security/lighting 116 10.0% Health 78 6.8% Housing and land 78 6.8% Help the needy 47 4.1% Community Development/Services 34 2.9% Sports & recreation 29 2.5% Don't know or blank 29 2.5% Distribute money directly to villages 23 2.0% Arts & culture 18 1.6% Transportation 13 1.1%

Grand Total Answers 1155 100% Respondents 493 Answers each 2.3 Note: Infrastructure = Infrastructure + housing + land + transportation = 30.8%

Health and community development = Health + Help the needy + community development/services + distribute money directly + arts and culture = 17.4%

Table 6-4: Comparison of RBA Budget with Survey Results on Budget Priorities RBA 2018 Survey Infrastructure 43% 30.8% Infrastructure Education 30% 19.3% Education/training/schools Security 12% 10% Security/lightning Health and 8% 17.4% Health and Community development Social development Sport 7% 2.5% Sports and recreation SMMEs (.62%) 17.6% Jobs/employment/business development

127

2.5% Blank TOTAL 100% 100%

6.5.2 The impact of employment The biggest difference between the community’s views and those of the administration was in the category of employment. Subsumed in the RBA 2016 budget is support for small, medium, and micro enterprises (SMMEs) listed as US$267,305 (R3,749,368) (Royal Bafokeng Holdings, 2016, p. 49). This amounts to less than 1% (.62%) of the US$50.3 million budget. The goal of the RBN is stated as follows, “We aspire for current and future Bafokeng generations to be economically independent and self- sufficient” (Royal Bafokeng Holdings, 2016, p. 48). The three priorities RBNDT listed for 2017-2019 are education and skills development, supplier and enterprise development, and preferential procurement. The following statement is made in the 2016 RBH review: Our supplier and enterprise development programme is focussed on supporting businesses which we can also use to provide RBH with services in future. Supplier and enterprise development are an integral part of ensuring sustainable transformation and empowerment at grassroots level. To this end RBH invested over R3.7 million in impacting and improving small enterprises in Phokeng and our suppliers in Johannesburg (Royal Bafokeng Holdings, 2016, p. 49).

The minute budget allocation (.62%) for SMMEs does not reflect this stated long-term strategy on business development. The survey, on the other hand, shows that local respondents perceived a much greater need for immediate employment to meet their livelihood needs (17.6%). The survey revealed a desire for immediate job creation, in addition to support for SMMEs. There is a national program of public job creation called the Expanded Public Works Program (Dept. of Public Works, 2019), but it hasn’t been widely implemented and the salaries are said to be woefully low (Bekker, 2018). There is no evidence of this national program in the Bafokeng territory. This study found no evidence that the RBNDT has made provision for a public works employment program in their strategy or budget.

The impact of centralisation

128

The statement above from the 2016 RBH review about developing suppliers in Phokeng and Johannesburg is revealing; Johannesburg is not in their territory, yet the administration is investing in suppliers there. Some survey responses from villagers who are dissatisfied with RBA services complained about benefits accruing to the main town of Phokeng and not to other villages. The following quotes are examples: “[The RBA budget] only benefits certain individual from specific villages of Phokeng”; “The Bafokeng don't exist according to us because our village is like one of the ones they sideline in development on everything compared to Phokeng”; “No work, bad roads, no clinic (too far away), no job contracts here, only in Phokeng”; “We suffer from poverty, nothing is being done, they only concentrate among Phokeng only”; “We only see development at Phokeng, our villages are still poor with infrastructure”.

A world cup soccer stadium, a five-star hotel with athletic training centre, the Lebone private high school, the civic centre administration building and a shopping mall were all built in Phokeng with RBN funds. Only the shopping mall, soccer stadium and administration building are accessible to the general population.

129

Figure 6-8: Bafokeng Platinum Belt and Villages-Source Bafokeng Planning Dept. (Ernie Kemm)

The impact of the mines The western half of the Bafokeng territory lies over the platinum mining region (see map, Figure 6-8), and these communities are affected much more directly by the mines. One of the major complaints by respondents was the perception that migrants were obtaining most of the jobs at the mines, bringing many problems with them such as overcrowding of schools and health clinics, an additional burden on utilities, crime,

130 and disease. Informal settlements of foreign workers were said to be bigger than the village in Photsaneng, according to a headman there. The PULA audit of 2016 shows the population of Photsaneng of 2690, while the population of the adjacent informal settlement of Nkaneng is given as 3763 (Research Unit: Royal Bafokeng Aadministration, 2016, p. 2), confirming it is larger than the village population.

In addition, respondents accused mines of damaging their homes by blasting, and offering no compensation, as well as extracting and polluting groundwater, and taking their grazing and farming land without permission among other infractions. Therefore, proximity to the mines was considered a negative, especially when local people were not the ones getting jobs in the mines.

The level of dissatisfaction with the mines is reflected in several mining communities forming the Bafokeng Land Buyers Association, who are trying to exert family or syndicate claims to land titles for 61 farms in close proximity to mines. These communities feel that the negative impact of the mines has not been adequately mitigated by efforts of the Bafokeng Administration, and they have not received adequate revenue. They are seeking their own land titles and ability to negotiate land use and royalty agreements with the mines separately from the RBA, hoping for greater resources than they receive now (Bafokeng Land Buyers' Association, 2018). A decision on 9 March 2018 overturned the decision of a lower court to transfer ownership to the Royal Bafokeng Nation of those 61 farms, which are currently held in trust by the Minister of Land Reform and Rural Development. The conflict between the Bafokeng administration and subgroups, which goes back at least to 1908 as detailed in the quotes above, continues.

Summary of the regression analysis A multiple regression analysis was conducted from the dissatisfaction factors discovered in the survey. Results and analysis are found in Appendix 6-2. The main purpose was to discover the relative importance of the three factors which could be quantified: Unemployment, proximity to mines, and distance from Phokeng. What we found is that satisfaction was reduced by 2/3 a point if the person lived in the mining belt. Satisfaction increased by 2/3 a point if the person was employed. Satisfaction was reduced by 1 point for every 21 km distance from Phokeng. This was reflected in

131 the surveyors’ visit to Tlapa (a distance of 44.3 km from Phokeng), where the interviewers were threatened with violence if they did not leave, such was the hostility towards the Bafokeng administration which they were seen as representing. By comparing the standardised coefficients of these three factors we found that distance from Phokeng has nearly double the impact of the other two factors.

Other factors that influenced people’s satisfaction levels were benefits, services, infrastructure, conditions, and perceptions of bad management, corruption and nepotism (shown above in the explanation of unfavourable responses to question 4b). These are qualitative factors that cannot be quantified easily.

Qualitative factors reflecting satisfaction with administrative services include personal benefits such as bursary payments provided for youth education, and running water and electricity provided to the homestead. Community benefits resulting in satisfaction include roads, lights, police and security, schools/training, health clinics, sports infrastructure, sanitation/trash, and business development.

Qualitative factors reflecting dissatisfaction include the widespread complaint of mainly outsiders hired for jobs, youth unemployment, crime, lack of adequate infrastructure, schools, health care or transportation, and lack of any sense of progress by some villagers. Complaints specifically targeted at the RBA included accusations of nepotism, corruption, greed, bad management, lack of concern or information. Some felt that their villages were ignored by the RBA. Some surveys reported suffering and hunger. Damage to homes from mines without compensation, as noted above, was another common complaint.

Discussion: The RBA and perceptions of benefit among the community On the one hand, the RBA has been given credit for managing many public services such as infrastructure development, education, security, health and social development and sports. Many believe they have done so far better than the municipal or national governments. For instance, according to Cook, Over 95 per cent of Bafokeng houses are electrified and all the formal residential stands receive reticulated water. Schools and clinics are better than the government norm, and there are more paved roads and community halls,

132

and many other direct benefits such as hot lunches, sports programmes, and libraries in schools, where there would otherwise be none (S. E. Cook, 2013). The Bafokeng provide trucks for rubbish pick up from the entire area. They also built numerous health clinics, which the government had not provided. As noted above, the RBA built a world cup soccer stadium, a five-star hotel with athletic training centre, the Lebone private high school, the civic centre administration building and a shopping mall in Phokeng.

On the other hand, there is the dissatisfaction of 51.3% of the Bafokeng population with the benefits received from their mineral wealth, according to the survey. How is this explained? One explanation may be that people’s perceptions are based on relative wealth, not absolute wealth (Wilkinson & Pickett, 2009). They see many of their neighbours and people in Rustenburg living in nice homes, with indoor plumbing and toilets, while many of them are still living in corrugated iron shacks that flood when it rains, and using pit toilets. Some mine employees have dedicated housing in brand new single-family homes and townhouses near the mines – but many of these mine workers are outsiders. The descendants of the church elders who registered individual titles with Christoph Penzhorn were said to be “driving Mustangs and Bugattis” and generating envy owing to their ostentatious wealth (Royal Bafokeng Administration, 2018). Other local families who managed to register individual titles to land (as documented by Bergh, Mbenga and Manson above) may also be enjoying mineral wealth. However, regardless of the comparisons, the criticism remains that there is a clear lack of employment opportunities among the Bafokeng, a problem shared across South Africa. Addressing that effectively with jobs, whether through public works programmes or expanded business development, would seem an important priority for the RBA.

Supplemental Analysis: The Mineral Commonwealth and Ostrom’s CPR Principles One factor not previously discussed is the level of technology needed to exploit mineral resources, and how that might work against communal management. Ostrom’s study of successful commons managing systems included a Swiss case of managing communal grazing lands, a Japanese case of managing timberlands and other communal lands, farmers in Valencia, Spain managing a communal irrigation

133 system, and Zanjera irrigation communities in the Philippines. Her design principles of long-enduring Common Pool Resource (CPR) Institutions are the following (Ostrom & Ebooks, 1990): 1. Clearly defined boundaries Individuals or households who have rights to withdraw resource units from the CPR must be clearly defined, as must the boundaries of the CPR itself. 2. Congruence between appropriation and provision rules and local conditions Appropriation rules restricting time, place, technology, and/or quantity of resource units are related to local conditions and to provision rules requiring labour, material, and/or money. 3. Collective-choice arrangements Most individuals affected by the operational rules can participate in modifying the operational rules. 4. Monitoring Monitors who actively audit CPR conditions and appropriator behaviour are accountable to the appropriators or are the appropriators. 5. Graduated sanctions Appropriators who violate operational rules are likely to be assessed [sic] graduated sanctions (depending on the seriousness and context of the offence) by other appropriators by officials accountable to these appropriators, or by both. 6. Conflict-resolution mechanisms Appropriators and their officials have rapid access to low-cost local arenas to resolve conflicts among appropriators or between appropriators and officials. 7. Minimal recognition of rights to organise The rights of appropriators to devise their own institutions are not challenged by external governmental authorities. For CPRs that are parts of larger systems: 8. Nested enterprises Appropriation, provision, monitoring, enforcement, conflict resolution, and governance activities are organised in multiple layers of nested enterprises.

In the case of minerals, some of these principles may be difficult to apply, which might explain the difficulty of applying communal ownership principles to minerals. While principles 1 and 8 may be met by communities with mineral ownership, many of the

134 others may be problematic. In all of Ostrom’s examples, members of the community are able to exploit the resource themselves directly without the need for outside investment or technology. In the case of minerals, the high level of investment and technology required usually demands that experienced, outside technical and financial organizations, such as mining corporations, be engaged to exploit the resource. This contributes to loss of control by local communities over mineral resources on their land even if they have mineral ownership rights in the first place. Principles 2-6 may be difficult to implement in the case of mining operations.

Congruence between appropriation and provision of local resources may be broken due to major resources such as machinery, labor, and capital brought in from outside (2). Collective choice may be violated since once mining companies have been granted rights to mine, the local community may lose control of governance of the resource (3). Monitors may be accountable to government, environmental agencies, shareholders, banks, etc., or other institutions outside the local community (4). Local communities may be unable to impose graduated sanctions, or any sanctions at all, on mining corporation violations, which may result in labor or social conflict (5). Conflict resolution mechanisms may be available, but unequal power relationships might make the local community less able to assert their position (6). Regarding the right to organize their own institutions, mining corporations operate under institutions that may be recognized by government, but are independent of local communities. These institutions include stock exchanges, boards of directors, shareholders, banks, investors, etc. The appropriators in this case are the mining corporations, not the local community residents, so a disconnect is created (7). One of the few forms of accountability is the unofficial “social license to operate” granted by communities if their rights are not violated too badly.

An example, which was not part of this study, but which local residents reported during the month long research on the Bafokeng communal ownership system, was an incident with the locally owned Royal Bafokeng Platinum (RBPlat) mining company. The company is managed in the standard corporate style and is not directly accountable to the local community, but more to the Board of Directors, executive committee of the Bafokeng Supreme Council, and the Royal Bafokeng Holding Company (Susan E. Cook, 2011). Community members could exert influence only

135 indirectly through the community governance system which meets infrequently, the Kgotha-Kgotha (annual meeting). One example of the lack of accountability was that shortly before the survey team arrived to conduct research, a resident of the local Robega Village, engaging in a labor protest at the mine, was allegedly shot to death by company security officers (ANA Reporter, 2018). By comparison, a British owned company, Lonmin, was at the center of an international scandal at the Marakana Mine where 34 striking workers were shot by security in 2012. Although the RBPlat shooting did not get much publicity, it demonstrates that even a locally owned company subject to pressures of the global mining industry may engage in the same behaviour as an international mining giant. This incident illustrates the difficulty of applying successful common property resource management principles to minerals. It also contributed to the general sense of dissatisfaction that the Bafokeng people expressed regarding mining operations on their land.

Conclusion This study has attempted to answer two questions regarding the Bafokeng experience: First, what is the role of communal land in the benefits they have received from mining. Second, what are the opinions of the populace regarding the benefits received. Communal property cannot be the sole explanation for the success of the Bafokeng in capitalising their mineral rights and funding development, compared to other traditional communities. The Bafokeng have done much better than some neighbouring traditional communities, which communal land ownership cannot explain, since all the traditional communities in the region share similar communal land systems. Manson notes that: One can draw some comparisons and distinctions between the baPo and baKwena ba Mogopa cases and the baFokeng. The vast injection of capital into the hands of ethnic entities through mining revenues has created the potential to corporatize their existence. While the baFokeng have done so with startling success – the current kgosi is CEO of Bafokeng Holdings, the former two have failed dismally so far (Manson, 2013, p. 421). The Bakgatla Ba Kgafela also had a system of communal land ownership. They were entitled to assets worth US$1.77 billion (R25 billion), but according to news reports, the South African government and local chiefs embezzled the entire fund leaving the community with nothing for development (Bloom, 2018). Communal land is a

136 necessary, but not sufficient explanation for the benefits the Bafokeng have received. Bafokeng lawyers have been challenging government and corporate land grabs in the courts for over 100 years, and the courts have largely supported their land claims, since they were established by legal titles acquired since 1868. Thus, they are often called the “tribe of lawyers”. The population is highly educated and informed, and the communal governance system has held the leadership accountable in the past. Communal land titles gave them the ownership rights to minerals, but only their strong governance and legal advocacy allowed them to retain the benefits.

The second question of this study was, do the Bafokeng people enjoy the benefit of those mining resources? A survey to determine their perceptions about those benefits yielded several interesting results. The foregoing discusses in detail the qualitative factors in both satisfaction and dissatisfaction with the performance of the Royal Bafokeng Administration, the body entrusted with administering the RBN’s wealth. The corporatisation of RBPlat and Royal Bafokeng Holdings, the centralisation of benefits around Phokeng, the lack of mitigation from mining problems, and severe lack of employment, appear to be alienating the administration and royalty from villagers, based on survey results. The study also found that employment, proximity to mines, and distance from Phokeng, which could be quantified, were statistically significant factors in determining the satisfaction of local residents with RBA services.

The primary difference between the priorities of the Royal Bafokeng Administration budget and the stated preferences of survey respondents is in the funding for employment. While the administration allocates .62% of the budget for employment and business development, the survey respondents’ average desired allocation for jobs, employment, and business development is 17.6% of the budget. This is a huge discrepancy reflecting the desperate need for jobs in the community. Compensation to residents affected by the mines is another measure that might be advisable.

137

7 Chapter Seven: Conclusion The thesis started with the premise that minerals are a common property resource as part of the earth and that people inherently desire fairness. Therefore, the hypothesis was that communal ownership would be the most just form of distribution and have the best outcomes. This hypothesis is based on both a normative and empirical basis. Answers to the primary and secondary research questions can be evaluated through a review of findings.

Precedents exist for the Economic Commonwealth The history of communal property rights was reviewed and extensive evidence was found for communal ownership in Justinian Roman Law, in British common law, and contemporary legal precedents. In Justinian Law the principle of res universitatis is found, which is the common property of a community, group, or corporation. This is virtually identical to Eleanor Ostrom’s concept of common pool resource management by communities.

The ad coelum doctrine does not define communal ownership, but rather it gives mineral rights to individual landowners, which can also be groups such as tribes or communities granting them ownership rights to their resources. In the case of the Bafokeng, since they own their land communally, the ad coelom doctrine in South Africa granted them communal ownership of minerals also.

“Locke’s proviso” gives a historical justification for private property, but only if “as much and as good” is left in common for others (Locke, 1689). Thomas Paine proclaimed that the earth is common property and only the products of labour are private property. According to Paine, everyone is entitled to a share of the earth or its equivalent in cash from rent paid by landowners.

Eleanor Ostrom documented the management of common pool resources for centuries by communities in her book “Governing the Commons.” In British Common Law, the “Public Trust Doctrine” holds government responsible as a trustee for natural resources on behalf of the citizenry. In contemporary property law, there is extensive use of communal principles at the supra-national level and the sub-national level. At

138 the supra-national level, nearly every agreement on managing global resources is explicitly based on common property under the “Common Heritage of Mankind” principle. These property management regimes include the Convention on the High Seas, Deep Seabed Authority, Antarctica Treaty, Outer Space Treaty, Moon Agreement, Geo-synchronous orbital slots, and numerous United Nations International law concepts and principles establishing the rights of peoples to their own resources.

At the sub-national level, Australian law recognized the “communal usufructuary occupation of the community” (Blackburn et al., 1971, pp. 52,53) even before it established the concept of “native title” in the Mabo legal case. Native American lands are held in trust by the federal government, but tribes can negotiate for mineral rights on their lands. Canadian First Nations in Nunavut have settled land claims granting the some sub-surface rights, and the Dogrib (Tlicho) settlement grants them fee- simple title over all their land including minerals. The Royal Bafokeng Nation in South Africa was able to retain ownership of their lands and minerals due to the Dutch- Roman ad coelum doctrine in effect in South Africa. The US state of Alaska arguably has communal ownership of oil since every citizen receives an annual dividend of approximately $2000.

Based on all of this historical and empirical evidence, the secondary research question “A” can be answered in the affirmative; there is extensive historical and legal precedent for communal ownership of minerals and other natural resources in legal history and contemporary law.

Decentralised ownership condusive to development Next, the mining laws of 199 countries were compiled in order to establish a taxonomy of ownership of minerals for every country in the world. 193 countries were used in the analysis. 19 countries claimed in law that minerals belong to the people, the public, or are collective rights. However, upon further investigation using US Geological Survey materials and other sources, it was found that these are just empty words and in reality are not different from state ownership in practice. An anonymous peer reviewer also refuted the concept that these statements signified anything other than

139 legal rhetoric. Furthermore, evaluating the HDI for these countries obtained nearly identical results as state ownership. Using simple regression analysis the sample size was too small to obtain any significant results. Therefore, the attempt to answer research question B about development outcomes at the national level was modifed.

The original taxonomy created of mineral ownership worldwide is as follows: 1. No minerals 2. President 3. State/crown 4. People (common, communal) 5. customary (traditional) landowners 6. Decentralised/mixed 7. Claimant/landowner Categories 2-4 were combined to form a group called centralised ownership, and categories 5-7 to form the decentralised category. First the means were compared, and it was found that the decentralised category had an HDI of 13 points higher than the centralised category, and the results were statistically significant using a t-test. Anonymous peer reviewers were interested in the results of further analysis of these statistics, which was a desirable task for this author as well. The impact of ownership needed to be disaggregated from other factors. Therefore, a more extensive statistical analysis was performed, with assistance from Shabbir Ahmed, and included many national factors in order to determine the impact of ownership on the Human Development Index, holding other factors constant. These results were found in Chapter 5.

Decentralised ownership categories were taken from the taxonomy listed above.. Other factors included: Income group, region, corruption perception index, democracy scale, and gender gap, population, and fuel exports as percentage of total exports, ore exports as percentage of total exports, total resource exports as percentage of total exports, resource rent as percentage of GDP, resource revenues as percentage of govt revenue, EITI status and year joined. In addition, six World Bank governance factors were used including: Voice and Accountability, Political Stability/No Violence, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. After many trials, statistically significant results were obtained for the

140 independent variable of decentralised mineral ownership using the following additional independent factors: Competitiveness, population, region of the world, resource exports, corruption perception index, gender gap, and several others. Although the impact of communal ownership was not determined, a statistically significant impact was found for decentralised ownership. This has important implications for the analysis of the resource curse. It lends support to the principle of subsidiarity, that mineral governance and revenue should be managed at a decentralised level. This goes against the primary current method of governance for 143 out of 199 countries, which allocate mineral ownership to the centralised state. It provides evidence for research question B about what type of mineral ownership provides the best development outcomes. Although the superiority of any specific ownership type such as individual or claimant was not demonstrated, statistically significant evidence was shown that decentralised ownership provides for better results as measured by the HDI.

Communal ownership necessary, but not sufficient for local benefits Chapter 6 was based on a case study of an African traditional community, which has communal ownership of land and minerals, the Royal Bafokeng Nation. A questionnaire was formulated asking demographic information, questions about mineral ownership, mineral benefits, and preferences for development spending, as well as allowing for open-ended comments.

The demographic questions immediately identified the high unemployment rate as a serious problem. This is the case in all of South Africa, so is not unique to the Bafokeng area. The literature revealed that the Bafokeng won a landmark legal settlement in 1999 granting them significant royalties and ownership shares in the Impala Platinum Corporation, due to their communal land ownership, and long-time judicial activism in the courts. Reports of Royal Bafokeng Holdings (RBH), stated the current investment fund is at the level of 30 billion South African Rand as of 2016. Dividend payments currently amount to 601 Million Rand, which are all spent on community development by the Royal Bafokeng Nation Development Trust (RBNDT), which is the only shareholder of the RBH. As part of their portfolio, the Bafokeng have

141 even formed their own platinum mining company the Royal Bafokeng Platinum Corporation (RBPlats).

Knowing your rights is often the first step to obtaining them, so people were first questioned about ownership of platinum in the entire country and in the Bafokeng Nation itself. Over 50% of the people correctly identified the national government as the legal owner of minerals as a recent law had established that fact in 2004. Communities who administer their own services to the community such as the Bafokeng, have obtained some legal exception to this ownership up to now, but the question is in flux. When queried about who owns the platinum on their land almost half said it was the king Leruo Molotlegi, which was a surprising outcome that may reflect perception of centralization of benefits within the community. On the final question of who should own the minerals on their land, the answer was definitive: 71.2% believed that the tribe should have legal title to the platinum on their own land. This is not surprising, because the Bafokeng had to fight epic battles with the Boers, the British, the apartheid government, the Bantustan Bophuthatswana, and in the courts for over 100 years to obtain their mineral rights.

On the primary research question as to whether communal ownership had better development outcomes than other forms of ownership, it was found that communal ownership by itself was not adequate to explain the revenue obtained from platinum by the Bafokeng, since other nearby ethnic communities with communal ownership of mineral lands did not enjoy the same success. Communal or tribal ownership did ensure that the administration was able to legally prosecute their rights, but there were many other factors involved. It was a necessary, but not sufficient explanation for the success of the tribe in obtaining access to platinum revenues. Their system of communal governance was also critical. The Bafokeng administration was able to deliver far more services and development to the community than either the local municipality or national government. This argues in favour of the principle of subsidiarity or decentralisation, sometimes called devolution of rights to local or tribal administrations, which answers research question B about what type of mineral ownership has the best results. It supplements the findings of chapter 5 that decentralised ownership has better results. It supports the “rentier state” explanation of the resource curse, that when national governments receive resource revenue, they

142 are less responsive to the needs of their citizens. By decentralizing revenue through direct receipt of royalties, the needs of the Bafokeng people were better met than by the national government.

Residents’ attitudes about benefits received were then surveyed. One key difference between the Bafokeng and the Australian Aborigines and Native Americans, is that unlike the Bafokeng, those tribes do not have ultimate title to their minerals. The US or Australian government has ultimate title to minerals, and the tribes only have negotiating rights to receive some compensation. They are treated like a dependency with a patronizing parent taking care of them, rather than having full sovereignty. This may have an impact on the quality of life indicators.

Despite the far superior benefits received by the Bafokeng people compared to other area native communities, there was still widespread dissatisfaction with benefits. 52.3% of the respondents either disagreed they were benefitting from administration (RBA) services or strongly disagreed. Adding the 26% who were neutral, then 78.3% of the population is unsatisfied with benefits received. This was rather surprising given the 600 million Rand (US$50 million) spent on development per year in the area, 100% access to electricity and water, schools, health centres, roads, lighting, security, and other services provided. The reason for this became apparent from the next question asked which was why they were satisfied or unsatisfied. Reasons given were severe unemployment, foreign workers taking most of the jobs in the mines, poor services, damage and displacement from the mines, perceptions of corruption and nepotism on the part of the tribal administration, and that most of the benefits go to the central city of Phokeng. At every level, there is a perception of lack of responsiveness of central authorities, even at the community level, whether deserved or not. An additional reason for dissatisfaction, according to this analysis, based on the findings of the “Spirit Level” (Wilkinson & Pickett, 2009), is that severe inequality is impacting the opinions of the people. Despite significant expenditures on services and infrastructure, many Bafokeng still live in corrugated metal shacks, lacking flush toilets, and live with dirt roads that flood their houses when it rains. Meanwhile, many mineworkers live in new modern townhouses with paved roads in gated communities near the mines. The contrast is just too extreme, despite the relatively better benefits the Bafokeng receive compared to other local traditional communities.

143

The final survey question asked the people how they would spend the annual R600 million development budget. After comparing it to the budget of the administration, a major discrepancy was found in the area of employment. While the administration spends only .62% of the budget on employment for small, micro, and medium enterprises, the survey respondents desired 17.6% of the budget to be spent on employment. There was a major disconnect in the approach of the administration compared to the citizens. The administration provides some educational funding and business training and expects the people to lift-themselves up by the bootstraps. The public wants the administration to directly create jobs to ameliorate the severe unemployment problem. The administration’s focus is on fostering sub-contractors for their services, going as far as funding businesses in Johannesburg, which is far out of their area, to do so. The holding company also makes traditional financial investments, rather than investing in development projects in the community with fund capital rather than just with revenue. In fairness, this is the typical cautious approach used by most Sovereign Wealth Funds, to protect capital, and not use it for risky development projects, which don’t promise a financial return.

This disconnect between the administration and the public identified in the survey does reflect on governance. It helps to answer research question C about the role of communal title of a local tribe, and their attitudes about benefits received. In addition, it reflects on the primary research question about the resource curse. Even at the community level, it seems that the receipt of resource revenue supports the concept of the “rentier state” that tends to leave the central authority somewhat unresponsive to the desires of the community. Since the Bafokeng people are not contributing any tax revenue to the administration, they may have less influence on decision of the administration than they would otherwise.

Prospects for the Economic Commonwealth The findings of this inquiry into the economic commonwealth of minerals, and how it addresses the resource curse, can be explained by the concept of subsidiarity. Subsidiarity is the principle is that powers are best devolved to lower levels of governance, where they are closest to the people affected, and only those powers that are appropriate should be retained by the centralized body. Subsidiarity is an inherent

144 question in every system of governance. Subsidiarity was important in determining the powers of the EU compared to individual countries in the Maastricht treaty forming the EU (Craig, 2012). The following definition is given in Article 5 of the Maastricht Treaty, “All else being equal, the exercise of a power by Member States is preferable to its exercise by the European Union. Second, this allocation of power is qualified by an efficiency test. Power should be shifted downwards unless the centralisation of power will result in efficiency gains—“(Barber, 2004, p. 311). The United States Bill of Rights was designed to limit the power of a central government due to their tendency to become tyrannical. Two out of the first ten amendments to the US Constitution deal with principles of subsidiarity: Amendment IX The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people. Amendment X The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people. As an example, the Royal Bafokeng Administration allocates returns from their sovereign wealth fund into social investments amounting to an expenditure of R4655 per person. The Republic of South Africa (RSA), by contrast, has a public expenditure of R25,849 per person. Nearby communities receiving RSA funds, but not platinum dividends, are far less developed and impoverished than the Bafokeng. It is therefore obvious that the Bafokeng have done much more with five and half times less money per capita than the national government, demonstrating the benefit of subsidiarity.

The strategy of decentralisation is mainly an issue of the distribution of revenue. Ross et al. (2012) describe three methods of fiscal decentralisation: 1. They may levy taxes directly on the resource industry. 2. They may receive a direct transfer from the central government that is a defined share of the revenues originating in the region. 3. They may receive indirect transfers—through the national budgeting process— that reflect preferential treatment for producing regions.

145

The South African case follows the third method of distribution of revenue during the budgeting process. This is subject to political control, and has no guarantee that the location where the minerals originate will receive a proportional share of the revenue. The second method is also subject to political control, even though it theoretically requires that a mandatory share of revenue be allocated to the mineral originating area, but there is no guarantee. The first method of directly taxing the resource industry is much more likely if the local community has a legal title to minerals on their land. Otherwise, it is subject to vagaries of the central government. That is where decentralised or communal of ownership as examined in this thesis applies. By having ownership title to minerals, a local community is much more likely to receive revenue from minerals on their land, than leaving it up to the central government.

Despite this, Ross et al. (2012) advocate that central governments collect and distribute resource revenue, due to their greater management capability. This could be justified by the “efficiency gains” of revenue collection at a higher level of government (Barber, 2004, p. 311). Perez-Sebastian and Raveh (2016) state that, “Resource windfalls may incentivize rent-seeking behavior of local, fiscally autonomous, governments—the political channel.” Kolstad and Wiig (2009) state that centralised political-economy model is based on rent seeking through patronage, and the decentralised model is due to rent seeking by entrepreneurs. Joel Brätland (2012) claims that when minerals are privately owned, the private surface landowner may hamper the decision-making of the extractive enterprise, resulting in inefficiency.

These writers identify problems with both the centralised and decentralised cases, rent-seeking in particular, which may be defined as unearned income not accountable to the public. They claim that resource rents create dysfunctional behaviour (patronage or rent-seeking) due to bad institutions of governance, which causes economic inefficiency (Kolstad & Wiig, 2009). The statistical analysis performed in chapter 5 provides evidence that controlling for other factors, decentralised mineral ownership has better outcomes. Governance seems to be key in successful decentralisation of revenue, but even accounting for governance, decentralisation still has better outcomes according to this analysis.

146

The conflict of the Bafokeng Land Buyers Association with the Royal Bafokeng Nation (RBN) in some ways mirrors the long-running conflict between the Bafokeng and Central Government. How low should the principle of subsidiarity go? If the Land Buyers acquire uncontested rights to these properties, they might negotiate better revenue sharing agreements from the mining companies on their land, and might provide better services than they receive now, but only to selected families or villages. Many villages might still be left behind. This illustrates the efficiency principle elucidated in the EU subsidiary statement, “Power should be shifted downwards unless the centralisation of power will result in efficiency gains—“ (Barber, 2005). The Royal Bafokeng Administration has economies of scale in delivery of services that smaller units don’t have. If the system of communal land had been maintained, none of the these issues would have arisen in the first place, but it is impossible to go back to the past.

There are some countries with state ownership of minerals with very high human development such as Ireland (HDI=.916), Denmark (HDI=.923), Netherlands (HDI=.922), New Zealand (HDI=.913), and Norway (HDI=.944) (see Appendix 5-1). These cases would seem to contradict the findings of this thesis, that communal or decentralised mineral ownership have better development outcomes. Norway in particular has large petroleum resources, but has avoided the resource curse through good governance. They are mostly OECD countries with democratic governments, low levels of corruption, and competitive economies. They are also fairly small countries, which works in their favour. These are the exceptions that prove the rule, as most countries are not so well governed. The mean HDI for countries with state ownership of minerals is only 0.673. In the statistical analysis in chapter 5 governance, region, income group, and size and other factors were all accounted for. Controlling for these factors decentralised ownership is shown to have better outcomes.

How can communal or decentralised ownership of minerals address the resource curse problem? Communal or decentralised ownership can result in bringing accountability down to a more local level closer to the people. However, even at the community level, governance is important as shown by the lack of development in some African traditional communities, where mineral wealth was embezzled by chiefs or retained by higher levels of government. Among the Bafokeng, despite relatively

147 good governance, survey results showed that people complained about centralisation of benefits to the capital city and to members of the monarchy and government officials. The tendency to rent-seeking and centralisation of benefits appears to hold at every level. Decentralisation of mineral ownership can play an important role in improving human development, but it is necessary for the public to hold the authorities accountable at every level from international down to local. Inequities in political power play a large role in determining if this is possible, and therefore governance plays a crucial role.

For the economic commonwealth to become a reality requires a wider understanding of the inherent common property right of all people to minerals and other elements of the natural and social commons. This inquiry into the economic commonwealth of minerals has explored not just normative questions of rights, but also empirically demonstrates the economic and social benefits of communal or decentralised ownership of minerals from a local to national level. This evidence points to a need to expand our use of the concept of commonwealth from its narrow, political connotation to a broader conception that includes economic rights to minerals and other natural resources.

148

Bibliography

Adams, J. (1787). Defense Of The Constitutions Of The United States, Letter XXIX. Ancient Republics, And Opinions Of Philosophers. Retrieved from http://www.constitution.org/jadams/ja1_29.htm Alcantara, C., Cameron, K., & Kennedy, S. (2012). Assessing Devolution in the Canadian North: A Case Study of the Yukon Territory. Arctic, 65(3), 328-338. Alexeev, M., & Mamedov, A. (2017). Factors determining intra-regional fiscal decentralization in Russia and the US. Russian Journal of Economics, 3(4), 425-444. doi:https://doi.org/10.1016/j.ruje.2017.12.007 ANA Reporter. (2018, 15 January 2018). So. Africa: Community members allege Royal Bafokeng Platinum mine security killed man during protest over labour issues; company denies allegation. Retrieved from https://www.business- humanrights.org/en/so-africa-community-members-allege-royal-bafokeng-platinum- mine-security-shot-dead-one-of-them-during-a-protest-over-labour-issues-at-the- mine# Anderson, T. L., & Hill, P. J. (1983). Privatizing the Commons: An Improvement? Southern Economic Journal, 50(2), 438. Arellano-Yanguas, J. (2011). Aggravating the Resource Curse: Decentralisation, Mining and Conflict in Peru AU - Arellano-Yanguas, Javier. The Journal of Development Studies, 47(4), 617-638. doi:10.1080/00220381003706478 Aristotle, & Reeve, C. D. C. (2009). Politics. Indianapolis, Ind: Hackett Pub. Arzaghi, M., & Henderson, J. V. (2005). Why countries are fiscally decentralizing. Journal of Public Economics, 89(7), 1157-1189. Australian Government Solicitor. (1998). Native title: legislation with commentary (Vol. 2nd). Canberra: AusInfo. Auty, R. (1991). Resource-based industrialization - sowing the oil in eight developing countries. In R. Auty (Ed.), (Vol. 82, pp. 159-159). Avery, O. (1990). Papua new guinea and its breakaway province of Bougainville: Negotiations in a small state. The Round Table, 79(316), 416-423. doi:10.1080/00358539008454010 Badeeb, R. A., Lean, H. H., & Clark, J. (2017). The evolution of the natural resource curse thesis: A critical literature survey. Resources Policy, 51, 123-134. doi:10.1016/j.resourpol.2016.10.015 Bafokeng Land Buyers' Association. (2018). Advocating Human Rights Justice for Mine- Hosting Communities. Retrieved from https://bafokeng-landbuyers.org Bahl, R. (2001). Equitable Vertical Sharing And Decentralizing Government Finance In South Africa. IDEAS Working Paper Series from RePEc. Barber, N. W. (2005). The limited modesty of subsidiarity. European Law Journal, 11(3), 308-325. doi:10.1111/j.1468-0386.2005.00261.x Barnes, P. (2006). Capitalism 3.0 : a guide to reclaiming the commons (S. Beris & R. Adelson Eds. 1st ed.. ed.): San Francisco : Berrett-Koehler, Berkeley: Publishers Group West. Barnes, R. (2009). Property rights and natural resources. Oxford; Portland, Or: Hart. Bebbington, A. (2014). The Politics of Inclusive Development: Oxford University Press. Bekker, M. (2017). Bafokeng Vision 2035. Phokeng: Royal Bafokeng Administration. Bekker, M. (2018, February, 2018). [Conversation about EPWP]. Bergh, J. S. (2005). "We must never forget where we come from": The Bafokeng and their land in the 19th century Transvaal. History in Africa, 32, 95-115. Binningsbø, H. M., & Rustad, S. A. (2012). Sharing the Wealth:A Pathway to Peace or a Trail to Nowhere? Conflict Management and Peace Science, 29(5), 547-566. doi:10.1177/0738894212456952

149

Blackburn, R. A., Milirrpum, Northern Territory. Supreme, C., & Nabalco. (1971). Milirrpum v. Nabalco Pty. Ltd. and the Commonwealth of Australia: (Gove Land Rights case) : a claim by Aborigines that their interests in certain land had been invaded unlawfully by the defendents : Judgement of the Honourable Mr. Justice Blackburn: Law Book Co. Blackstone, W. S., & Warren, S. (1856). Blackstone's Commentaries: systematically abridged and adapted to the existing state of the law and constitution : with great additions (Vol. 2nd). London: W. Maxwell. Bloom, K. W.-S., Sasha. (2018). Stealing the crust: How the Bakgatla Ba Kgafela were robbed of their inheritance. Daily Maverick. Retrieved from https://www.dailymaverick.co.za/article/2018-02-01-stealing-the-crust-how-the- baktatla-ba-kgafela-were-robbed-of-their-inheritance/#.WtW3U3--mUl Bollier, D. (2002). Silent theft the private plunder of our common wealth: New York : Routledge. Bouckaert, B. (2010). Property Law and Economics (Vol. 5.). Cheltenham: Edward Elgar Publishing Limited. Brätland, J. (2012). Timing "Externalities" Imposed by Mineral Ownership Law: Coasean Versus Lockean Remedies. Journal of Private Enterprise, 28(1), 61-77. Britain, G., Turk, M. H., & Alfred, K. o. E. (1893). The legal code of Ælfred the Great [electronic resource]. Brosio, G. (2003). Oil Revenue and Fiscal Federalism. In R. O. J.M. Davis, and A. Fedelino (Ed.), Fiscal policy formulation and implementation in oil-producing countries. 700 19th Street, N.W., Washington, D.C. 20431, U.S.A.: International Monetary Fund: Publication Services. Bryman, A. (2016). Social research methods (Fifth edition.. ed.): Oxford, New York : Oxford University Press. Buxton, C. R. (2004). Property in outer space: the common heritage of mankind principle vs. the "first in time, first in right" rule of property law. Journal of Air Law and Commerce, 69(4), 689. Canada: Indigenous and Northern Affairs. (2018a). FAQ about Mining Royalty in Nunavut and the Northwest Territories Retrieved from https://www.aadnc- aandc.gc.ca/eng/1331039455218/1331039516621 Canada: Indigenous and Northern Affairs. (2018b). Tlicho Agreement. Retrieved from https://www.aadnc-aandc.gc.ca/eng/1292948193972/1292948598544 Capps, G. (2016). Tribal‐landed property: The value of the chieftaincy in contemporary Africa. Journal of Agrarian Change, 16(3), 452-477. doi:doi:10.1111/joac.12179 Capps, G., & Mnwana, S. (2015). Claims from below: platinum and the politics of land in the Bakgatla-ba-Kgafela traditional authority area. Review of African Political Economy, 42(146), 606-624. doi:10.1080/03056244.2015.1108746 Cawood, F. T., & Minnitt, R. C. A. (1998). A historical perspective on the economics of the ownership of mineral rights ownership. Journal of The South African Institute of Mining and Metallurgy, 98(7), 369-370. Chen, S., & Ravallion, M. (2008). The Developing World is Poorer Than We Thought, but No Less Successful in the Fight Against Poverty (Vol. 4703): Washington, DC: World Bank. Claassens, A., & Boyle, B. (2015). A Promise Betrayed: Policies and Practice Renew the Rural Dispossession of Land, Rights and Prospects. Coffey, S. (2009). Establishing a legal framework for property rights to natural resources in outer space. Case Western Reserve Journal of International Law, 41(1), 119. Coleman, J. (1988). Property and poverty, The Cambridge History of Medieval Political Thought c.350–c.1450: Cambridge University Press. Commonwealth Secretariat. (2004). Singapore Declaration of Commonwealth Principles: 1971. Marlborough House, Pall Mall, London SW1Y 5HX, United Kingdom: Commonwealth Secretariat Retrieved from www.thecommonwealth.org. Cook, S., & Hardin, R. (2013). Performing royalty in contemporary Africa. Cultural Anthropology, 28(2), 227-251. doi:doi:10.1111/cuan.12002

150

Cook, S. E. (2011). The business of being Bafokeng, the corporatization of a tribal authority in South Africa. Current anthropology, 52(S3), S151-S159. doi:10.1086/657894 Cook, S. E. (2013). Community management of mineral resources: the case of the Royal Bafokeng Nation. Journal Of The Southern African Institute Of Mining And Metallurgy, 113(1), 61-66. Cornell, A., & D'Arcy, M. (2016). Devolution and corruption in Kenya: Everyone's turn to eat? African Affairs, 115(459), 246-273. doi:10.1093/afraf/adw002 Costanza, R., Hart, Posner, Talberth. (2009). Beyond GDP: The Need for New Measures of Progress. The Pardee Papers. Cotula, L., Vermeulen, S., Leonard, R. and Keeley, J. (2009). Land Grab or Development Opportunity? Agricultural Investment and International Land Deals in Africa (IIED Order No: 12561IIED). London/Rome: IIED/FAO/IFAD

Craig, P. (2012). Subsidiarity: A political and legal analysis. JCMS: Journal of Common Market Studies, 50(Supp.1), 72-87. doi:10.1111/j.1468-5965.2011.02228.x Cummine, A. (2016). Citizens' Wealth : Why (and How) Sovereign Funds Should be Managed by the People for the People. New Haven, United States: Yale University Press. Dannreuther, R., & Ostrowski, W. (2013). Global resources: conflict and cooperation. Basingstoke: Palgrave Macmillan. Dauvin, M., & Guerreiro, D. (2017). The Paradox of Plenty: A Meta-Analysis. World Development, 94, 212-231. doi:https://doi.org/10.1016/j.worlddev.2017.01.009 de Soto, H. (2000). The Mystery Of Capital, Why Capitalism Succeeds In The West And Fails Everywhere Else (1st ed.). New York: Basic Books. Denoon, D. (2000). Getting under the skin: the Bougainville copper agreement and the creation of the Panguna mine. Carlton, Vic: Melbourne University Press. Dept. of Public Works, R. S. A. (2019). Expanded Public Works Programme (EPWP), . Retrieved from http://www.epwp.gov.za/ Dias, R. A., Mattos, C. R., & P. Balestieri, J. A. (2006). The limits of human development and the use of energy and natural resources. Energy Policy, 34(9), 1026-1031. doi:https://doi.org/10.1016/j.enpol.2004.09.008 Dippel, C. (2014). Forced Coexistence and Economic Development: Evidence From Native American Reservations. Econometrica, 82(6), 2131-2165. doi:10.3982/ECTA11423 Dobra, J. (2014). Divergent Mineral Rights Regimes A Natural Experiment in Canada and the United States Yields Lessons: Fraser Institute. Dwumfour, R. A., Agbloyor, E. K., & Abor, J. Y. (2017). Correlates of poverty in Africa. International Journal of Social Economics, 44(12), 2033-2051. doi:10.1108/IJSE-12- 2015-0319 Farley, J., Costanza, R., Flomenhoft, G., & Kirk, D. (2015). The Vermont Common Assets Trust: An institution for sustainable, just and efficient resource allocation. Ecological Economics, 109, 71-79. doi:10.1016/j.ecolecon.2014.10.016 Farzanegan, M. R., Lessmann, C., & Markwardt, G. (2018). Natural resource rents and internal conflicts: Can decentralization lift the curse? Economic Systems. doi:https://doi.org/10.1016/j.ecosys.2017.05.009 Feder, G., & Feeny, D. (1991). Land Tenure and Property Rights: Theory and Implications for Development Policy. The World Bank Economic Review, 5(1), 135-153. doi:10.1093/wber/5.1.135 Fife, W. (2005). Doing fieldwork: ethnographic methods for research in developing countries and beyond. New York: Palgrave Macmillan. Flomenhoft, G. (2015). The Eco-Illogical Cycle and the Politics of Climate Change. Solutions, 6(1), 84-90. Flomenhoft, G. (2018). Historical and empirical basis for communal title in minerals at the national level: Does ownership matter for human development? Sustainability, 10(6), 1958.

151

FluidSurveysUniversity. (2018). Survey Sample Size Calculator. Retrieved from http://fluidsurveys.com/university/survey-sample-size-calculator/ Fong-Sam, Y. (2017). The Mineral Industry of Vietnam. Washington, DC: USGS, US Department of the Interior. Friedman. (1970). Economics of the Common Pool: Property Rights in Exhaustible Resources, The. UCLA law review, 18, 855. Gillies, A. (2010). Giving money away? The politics of direct distribution in resource rich states - working paper 231. IDEAS Working Paper Series from RePEc. GOXI. (2018). Bastida et al - International and Comparative Mineral Law and Policy. Retrieved from http://www.eisourcebook.org/461_BastidaInternationalandComparativeMineralLawan dPolicy.html (Good-fit Practices in the International Oil, Gas, and Mining Industries) Gray, A. (2003). Research practice for cultural studies: ethnographic methods and lived cultures. Thousand Oaks, Calif; London: SAGE. Grogan, M., Morse, R., & Youpee-Roll, A. (2011). Native American lands and natural resource development. Revenue Watch Institute. Hardin, G. (1968). The Tragedy of the Commons. Science, 162(3859), 1243-1248. doi:10.1126/science.162.3859.1243 Harrington, J. (1992). Harrington: 'The Commonwealth of Oceana' and 'A System of Politics' (J. G. A. Pocock Ed.). Cambridge: Cambridge University Press. Harttgen, K., & Klasen, S. (2012). A Household-Based Human Development Index. World Development, 40(5), 878-899. doi:https://doi.org/10.1016/j.worlddev.2011.09.011 Hautzinger, S. (2012). Depending on context: Counterintuitive uses of focus groups in mixed-method ethnographic research. Human organization, 71(1), 22-31. doi:10.17730/humo.71.1.q3107n24l3427572 Henson, E. C. (2008). The state of the Native nations: conditions under U.S. policies of self- determination : the Harvard Project on American Indian Economic Development. New York, N.Y: Oxford University Press. Hermkens, A.-K. (2015). Marian Movements and Secessionist Warfare in Bougainville, Papua New Guinea. Nova Religio: The Journal of Alternative and Emergent Religions, 18(4), 35-54. doi:10.1525/nr.2015.18.4.35 Hlavová, N. (2017). The Impact of Mineral Resources on Development in Sub-Saharan Africa. Journal of Environmental Management and Tourism (JEMT), VIII(1(17)), 67- 77. Hodler, R. (2006). The curse of natural resources in fractionalized countries. European Economic Review, 50(6), 1367-1386. doi:https://doi.org/10.1016/j.euroecorev.2005.05.004 Hojem, P. (2015). Mining in the Nordic Countries: A comparative review of legislation and taxation: Copenhagen: Nordisk Ministerråd. Huang, Y., Fang, Y., Zhang, Y., & Liu, J. (2014). A study of resource curse effect of Chinese provinces based on Human Developing Index. Chinese Geographical Science, 24(6), 732-739. doi:10.1007/s11769-014-0727-9 Hurst, M. (1997). The determinants of earnings differentials for indigenous Americans: Human capital, location, or discrimination? Quarterly Review of Economics and Finance, 37(4), 787-807. doi:10.1016/S1062-9769(97)90004-1 ICMM. (2015). Sustainable Development Framework: ICMM Principles. London, UK: International Council on Mining and Metals. ILO. (1989). C169 - Indigenous and Tribal Peoples Convention, 1989 (No. 169), Convention concerning Indigenous and Tribal Peoples in Independent Countries (Entry into force: 05 Sep 1991). Retrieved from https://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO::P12100_ILO_ CODE:C169 Jagger, K. (2002). Minerals, mining leases and native title. Australian Mining and Petroleum Law Journal, 21(3), 236-243.

152

Johnson, E. L. (2010). Mineral Rights – Legal Systems Governing Exploration and Exploitation Royal Institute of Technology (KTH). Kaup, B. Z., & Gellert, P. K. (2017). Cycles of resource nationalism: Hegemonic struggle and the incorporation of Bolivia and Indonesia. International Journal of Comparative Sociology, 58(4), 275-303. doi:10.1177/0020715217714298 Kent State University Libraries. (2018). SPSS Tutorials: Independent Samples t Test. Statistical Consulting. Retrieved from https://libguides.library.kent.edu/SPSS/IndependentTTest Khamadi, S. (2014). Counties struggle to gain control over local natural resources in Kenya. Retrieved from http://www.shitemi.com/devolution/counties-struggle-to-gain-control- over-local-natural-resources-in-kenya/ Koeber, J. (2015, May 14). The US Mulls Breaking an International Treaty So Americans Can Mine Asteroids. Motherboard. Kolstad, I., & Wiig, A. (2009). It's the rents, stupid! The political economy of the resource curse. Energy Policy, 37(12), 5317-5325. doi:https://doi.org/10.1016/j.enpol.2009.07.055 Kortman, C. N., P. A. & Vuotovesi, T. (comps.). (1996). Introduction to mineral legislation in Finland. 2nd revised edition. . Retrieved from http://www.geonord.org/law/minlagfin.html Kunz, N. (2013). Sustainable Water Management by Coupling Human and Engineered Systems. U of Queensland, Brisbane. Larschan, B., & Brennan, B. C. (1983). The common heritage of mankind principle in international law. Columbia Journal of Transnational Law, 21(2), 305. Larson, A. M., & Ribot, J. C. (2004). Democratic Decentralisation through a Natural Resource Lens: An Introduction. The European Journal of Development Research, 16(1), 1-25. doi:10.1080/09578810410001688707 Lasslett, K. (2014). State crime on the margins of Empire: Rio Tinto, the War on Bougainville and Resistance to mining. London, [England]: Pluto Press. Latvian Parliament. (1999). “Amendments to the law “On the Subsoil” of February 11, 1999. Retrieved from http://faolex.fao.org/docs/texts/lat72284E.doc. Lawson, M., Man-Kwun Chan, Francesca Rhodes, Anam Parvez Butt, Anna Marriott, Ellen Ehmke, Didier Jacobs, Julie Seghers, Jaime Atienza and Rebecca Gowland. (2019). Public Good or Private Wealth. Oxfam House, John Smith Drive, Cowley, Oxford, OX4 2JY, UK.: Oxfam GB for Oxfam International Leach, M. (2014). Property Rights In Outer Space. Scitech Lawyer, 10(4), 4. Lee, M. Y., & Zaharlick, A. (2013). Culturally competent research: using ethnography as a meta-framework. New York: Oxford University Press. Lee, R. J. (2012). Law and regulation of commercial mining of minerals in outer space (Vol. 7.). Dordrecht; New York: Springer. Levine, R. (2005). Law, Endowments and Property Rights. The Journal of Economic Perspectives, 19(3), 61-88. doi:10.1257/089533005774357842 Lindley, C. H. (1988). A treatise on the American law relating to mines and mineral lands within the public land states and territories and governing the acquisition and enjoyment of mining rights in lands of the public domain (Vol. 3rd). Littleton, Colo: F.B. Rothman. Locke, J. (1689). Second Treatise of Government. In J. Bennett (Series Ed.) Early Modern Philosophy, J. Bennett (Ed.) Retrieved from http://www.earlymoderntexts.com/authors/locke Luong, P. J., & Weinthal, E. (2006). Rethinking the Resource Curse: Ownership Structure, Institutional Capacity, and Domestic Constraints. Annual Review of Political Science, 9(1), 241-263. doi:10.1146/annurev.polisci.9.062404.170436 Mahdavi, P. (2014). Why do leaders nationalize the oil industry? The politics of resource expropriation. Energy Policy, 75, 228-243. doi:https://doi.org/10.1016/j.enpol.2014.09.023

153

Majinge, C. R. (2008). The Doctrine of Permanent Sovereignty over Natural Resources in International Law and Its Application in Developing Countries: The Case of the Mining Sector in Tanzania. 16 Afr. Y.B. Int'l L. 235 (2008), 34. Manson, A. (2013). Mining and ‘traditional communities’ in South Africa's ‘Platinum Belt’: contestations over land, leadership and assets in North-West Province c .1996–2012. Journal of Southern African Studies, 39(2), 409-423. doi:10.1080/03057070.2013.796738 Manson, A., & Mbenga, B. (2003). 'The richest tribe in Africa': Platinum-mining and the Bafokeng in South Africa's North West province, 1965-1999. Journal of Southern African Studies, 29(1), 25-47. Mbenga, B., & Manson, A. (2010). 'People of the Dew': a History of the Bafokeng of Phokeng-Rustenburg Region, South Africa, From Early Times to 2000. Auckland Park: Jacana. McMahon, G., & Moreira, S. (2014). The Contribution of the Mining Sector to Socioeconomic and Human Development. Washington, DC: World Bank. Melton, J., Meserve, S., & Pemstein, D. (2014). Unified Democracy Score. Retrieved from http://unified-democracy-scores.org/ Mnwana, S. (2014). Mineral wealth – ‘in the name of morafe’? Community control in South Africa's ‘Platinum Valley’. Development Southern Africa, 31(6), 826-842. doi:10.1080/0376835X.2014.951988 Moss, T. (2011). Oil to cash: Fighting the resource curse through cash transfers. IDEAS Working Paper Series from RePEc. Mottu, E., & Ahmad, E. (2002). Oil Revenue Assignments, Country Experiences and Issues. IDEAS Working Paper Series from RePEc. Murchison, J. M., & Ebooks, C. (2010). Ethnography essentials: designing, conducting, and presenting your research (Vol. 1st). San Francisco: Jossey-Bass. Myanmar Mining Law of 1994, Chapter VII, paragraph 24 C.F.R. (1994). Myers, R., Hutchings, J., & Barrowman, N. (1996). Hypotheses for the decline of cod in the North Atlantic. Mar. Ecol.-Prog. Ser., 138(1-3), 293-308. doi:10.3354/meps138293 Necefer, L., Wong-Parodi, G., Jaramillo, P., & Small, M. J. (2015). Energy development and Native Americans: Values and beliefs about energy from the Navajo Nation. Energy Research and Social Science, 7, 1-11. doi:10.1016/j.erss.2015.02.007 Niblock, T. (2007). "The American Indian and Alaskan Native Development Index: The Progress of and Prospects for Indian Country,". Undergraduate Economic Review, 3(1, article 7). Northcott, H. (2012). Realisation of the right of indigenous peoples to natural resources under international law through the emerging right to autonomy. The International Journal of Human Rights, 16(1), 73-99. doi:10.1080/13642987.2011.611335 O'Brien, J., Remenyi, D., & Keaney, A. (2003). Historiography - A Neglected Research Method in: Business and Management Studies. Electronic Journal of Business Research Methods U6, 2(2), 135-144. O'Faircheallaigh, C. (2015, 8 September). [conversation about Bougainville]. Ostrom, E., & Ebooks, C. (1990). Governing the commons: the evolution of institutions for collective action. New York; Cambridge: Cambridge University Press. Otto, J. (2015, August 31). [Conversation about Mineral Ownership]. Otto, J. M. (1998). Global changes in mining laws, agreements and tax systems. Resources Policy, 24(2), 79-86. doi:10.1016/S0301-4207(98)00011-7 Otto, J. M. (2001). Fiscal decentralization and mining taxation. Washington, DC: The World Bank Group Mining Department. Owton, H., & Allen-Collinson, J. (2014). Close But Not Too Close: Friendship as Method(ology) in Ethnographic Research Encounters. Journal of Contemporary Ethnography, 43(3), 283-305. doi:10.1177/0891241613495410 Paine, T. (1797). Agrarian justice: opposed to agrarian law, and to agrarian monopoly. London -eBook: Paris: printed by W. Adlard. London: re-printed for T. Williams, No. 8, Little Turnstile, Holborn.

154

Peirce, C. S. (1908). "A Neglected Argument for the Reality of God". Hibbert Journal, v. 7, pp. 90–112. Pereira, R., & Gough, O. (2013). Permanent sovereignty over natural resources in the 21st century: Natural resource governance and the right to self-determination of indigenous peoples under international law. Melbourne Journal of International Law, 14(2), 451-495. Perez-Sebastian, F., & Raveh, O. (2016). The Natural Resource Curse and Fiscal Decentralization. American Journal of Agricultural Economics, 98(1), 212-230. doi:10.1093/ajae/aav051 Pineda, J., & Rodríguez, F. (2010). Curse or Blessing? Natural Resources and Human Development. IDEAS Working Paper Series from RePEc. Pop, V. (2009). Who owns the moon?: extraterrestrial aspects of land and mineral resources ownership (Vol. 4.). New York: Springer. Randall, K. Q. A., Spilde, K. A., & Taylor, J. B. (2014). Social and Economic Changes on American Indian Reservations in California: an Examination of Twenty Years of Tribal Government Gaming1. UNLV Gaming Research & Review Journal, 18(2), 39. Regan, A. J., & Griffin, H.-M. (2005). Bougainville before the conflict. Canberra: Pandanus Books. Reid, J. A., & Shams, T. (2013). Gender and Multigenerational Global Human Development. Sociology Compass, 7(8), 612-629. doi:10.1111/soc4.12060 Research Unit: Royal Bafokeng Aadministration. (2016). Population and Land Use Audit 2016. Phokeng, South Africa: Royal Bafokeng Administration. Revenue Watch. (2013). 2013 Resource Governance Index. New York: Revenue Watch. Risen, J. (2000, 18 June). Britain Fights Oil Nationalism. Retrieved from https://archive.nytimes.com/www.nytimes.com/library/world/mideast/041600iran-cia- chapter1.html Rittel, H. W. J., & Webber, M. M. (1973). Dilemmas in a general theory of planning. Policy Sciences, 4(2), 155-169. doi:10.1007/bf01405730 Roark, E. (2012). Applying Locke's Proviso to Unappropriated Natural Resources. Political Studies, 60(3), 687-702. doi:10.1111/j.1467-9248.2011.00935.x Rose, C. M. (1998). Joseph Sax and the idea of the public trust. Ecology Law Quarterly, 25(3), 351-362. Rose, C. M. (1999). Expanding the choices for the global commons: Comparing newfangled tradable allowance schemes to old-fashioned common property regimes. Duke Environmental Law and Policy Forum, 10(1), 45-72. Ross, M. L. (2001). Does Oil Hinder Democracy? World Politics, 53(3), 325-361. doi:10.1353/wp.2001.0011 Ross, M. L. (2012). The oil curse: how petroleum wealth shapes the development of nations. Princeton, NJ: Princeton University Press. Ross, M. L., Lujala, P., & Rustad, S. A. (2012). Horizontal inequality, decentralizing the distribution of natural resource revenues, and peace. In Environmental Law Institute and United Nations Environment Programme (Ed.), High-value natural resources and post-conflict peacebuilding (pp. 251-259). London: Earthscan. Royal Bafokeng Administration. (2018, 9 February) Bafokeng Oral History/Interviewer: G. Flomenhoft. Royal Bafokeng Holdings. (2016). Integrated review 2016-Building resilience through diversification. Johannesburg: RBH. Royal Bafokeng Holdings. (2017). Integrated Review 2017. Johannesburg. Ryan, B. (1974). The law surrounding "miner's right": Origin of the Mining Law of Queensland. Journal of the Royal Historical Society of Queensland, 9 (5) 101-114. Sachs, J. D., Warner. (1995). Natural Resource Abundance and Economic Growth. Cambridge, MA: National Bureau of Economic Research. Sachs, J. D., & Warner, A. M. (1999). The big push, natural resource booms and growth. Journal of Development Economics, 59(1), 43-76. doi:10.1016/S0304- 3878(99)00005-X

155

Sala-I-Martin, X., & Subramanian, A. (2003). Addressing the Natural Resource Curse: An Illustration from Nigeria. NBER Working Paper Series, 9804. doi:10.3386/w9804 Sandbu, M. E. (2006). Natural wealth accounts: A proposal for alleviating the natural resource curse. World Development, 34(7), 1153-1170. doi:https://doi.org/10.1016/j.worlddev.2005.11.014 Sax, J. L. (1970). The Public Trust Doctrine in Natural Resource Law: Effective Judicial Intervention. Michigan law review, 68(3), 471-566. Schensul, S. L., Schensul, J. J., & LeCompte, M. D. (2013). Initiating ethnographic research: a mixed methods approach (Vol. 2.). Lanham, Md: AltaMira Press. Schwab, K. (2016, 1/14/2016). The Fourth Industrial Revolution: what it means, how to respond. Retrieved from https://www.weforum.org/agenda/2016/01/the-fourth- industrial-revolution-what-it-means-and-how-to-respond/ Scovazzi, T. (2007). The concept of common heritage of mankind and the genetic resources of the seabed beyond the limits of national jurisdiction. Agenda Internacional. Segal, P. (2011). Resource Rents, Redistribution, and Halving Global Poverty: The Resource Dividend. World Development, 39(4), 475-489. doi:https://doi.org/10.1016/j.worlddev.2010.08.013 Shambayati, H. (1994). The Rentier State, Interest Groups, and the Paradox of Autonomy: State and Business in Turkey and Iran. Comparative Politics, 26(3), 307-331. doi:10.2307/422114 Sharman, F. A. (1989). An introduction to the enclosure acts. The Journal of Legal History, 10(1), 45-70. doi:10.1080/01440368908530953 Singleton, R., & Straits, B. C. (2018). Approaches to social research (Sixth edition.. ed.): New York Oxford University Press. Snider, J. H. (2003). The Citizen’s Guide to the Airwaves. Washington, DC: New America Foundation. Sprankling, J. G., & Ebscohost. (2014). The international law of property (Vol. 1st). Oxford: Oxford University Press. Stephenson, M. A. (2013). Chapter 22, Property. University of Queensland: unpublished class notes. Stephenson, M. A., & Ratnapala, S. (1993). Mabo : a judicial revolution : the Aboriginal land rights decision and its impact on Australian law: University of Queensland Press Sturman, K., Laichena, J., Wongombe, H., & Kisiangani, E. (2019). Will devolution help to develop Kenya's oil, gas, and mineral resources peacefully? Sustainable Minerals Institute. University of Queensland. Sutcliffe, S. (2012). Mining law: jurisdictional comparisons (Vol. 1st). London: Thomson Reuters. The Economist: Intelligence Unit. (2014). Democracy Index 2014, Democracy and its discontents. London, UK: The Economist,. Thomas, J. A. C. (1975). The Institutes of Justinian: text, translation, and commentary. Amsterdam: North-Holland. Thomas, T. (2013, January 01). The Naughty Nation of Nauru. Quadrant, 57, 30-34. Tiess, G. (2011). Legal Basics of Mineral Policy in Europe. Dordrecht: Springer. Totem Media. (2011). Mining the Future the Bafokeng Story (R. B. Research Planning Department of the Ed.). Auckland Park, South Africa: Jacana Media. Transparency International. (2014). Corruption Perceptions Index. Retrieved from https://www.transparency.org/cpi2014 Tuvalu Government. (2008). Mineral Development Licensing Act. Tuvalus Retrieved from http://www.fao.org/faolex/results/details/en/c/LEX-FAOC051730/. United Nations-CERD. (2000). Report of the Committee on the Elimination of Racial Discrimination. New York, NY: United Nations. United Nations. (1961). Antarctic Treaty System. New York, NY: United Nations. United Nations. (2007). UN Declaration on the Rights of Indigenous Peoples, 2007. Retrieved from http://www.un.org/esa/socdev/unpfii/documents/DRIPS_en.pdf. United Nations. (2017). Convention on Biological Diversity. New York, NY: United Nations.

156

United Nations Development Programme. (2018). Human Development Indices and Indicators: 2018 Statistical Update. New York, NY: United Nations. Venables, A. J. (2016). Using Natural Resources for Development: Why Has It Proven So Difficult? †. Journal of Economic Perspectives, 30(1), 161-184. doi:10.1257/jep.30.1.161 Verbrugge, B. (2015). Decentralization, Institutional Ambiguity, and Mineral Resource Conflict in Mindanao, Philippines. World Development, 67, 449-460. doi:https://doi.org/10.1016/j.worlddev.2014.11.007 Vietnam. (1992). Vietnam Constitution 1992 (rev. 2013). Retrieved from https://www.constituteproject.org/constitution/Socialist_Republic_of_Vietnam_2013?l ang=en Waal, F. d., Macedo, S., Ober, J., & Wright, R. (2006). Primates and philosophers: how morality evolved. Princeton, N.J: Princeton University Press. Wegenast, T. (2016). Oil, Natural Gas, and Intrastate Conflict: Does Ownership Matter? International Interactions, 42(1), 31-55. doi:10.1080/03050629.2015.1046599 Wegenast, T., & Schneider, G. (2017). Ownership matters: Natural resources property rights and social conflict in Sub-Saharan Africa. Political Geography, 61, 110-122. doi:https://doi.org/10.1016/j.polgeo.2017.07.007 Weinthal, E., & Luong, P. J. (2006). Combating the Resource Curse: An Alternative Solution to Managing Mineral Wealth. PERSPECTIVES ON POLITICS, 4(1), 35-53. doi:10.1017/S1537592706060051 Wenar, L. (2008). Property Rights and the Resource Curse. Philosophy & Public Affairs, 36(1), 2-32. doi:doi:10.1111/j.1088-4963.2008.00122.x Widerquist, K., & Howard, M. (2012). Exporting the Alaska model: adapting the permanent fund dividend for reform around the world. New York, NY: Palgrave Macmillan. Wild, F., and Ring, Suzi. (2018, 18 May, 2018). Glencore Said to Face U.K. Bribery Probe Over Congo Dealings. Markets. Retrieved from https://www.bloomberg.com/news/articles/2018-05-18/glencore-said-to-face-u-k- bribery-probe-over-congo-dealings-jhbxhab4 Wilkinson, R. G., & Pickett, K. (2009). The spirit level : why more equal societies almost always do better / Richard Wilkinson and Kate Pickett. London: London : Allen Lane. Williams, J. P. (2008). "International best practice" in mining: who decides and how - and how does it impact law development? Georgetown Journal of International Law, 39(4), 693. Williams, R. A. (1983). The Medieval And Renaissance Origins Of The Status Of The American-Indian In Western Legal Thought. Southern California Law Review, 57(1), 1-99. Wilson, C. (2013). Credible checklists and quality questionnaires : a user-centered design method: Waltham, MA : Morgan Kaufmann. Wood, M. C. (2007). Nature's trust: reclaiming and environmental discourse. Virginia Environmental Law Journal, 25(2), 243. Wooldridge, J. M. (2020). Introductory econometrics : A modern approach. Boston, MA: Cengage Learning, Inc. World Bank. (2019). Classifying countries by income. Retrieved from https://datatopics.worldbank.org/world-development-indicators/stories/the- classification-of-countries-by-income.html World Bank Institute. (2009). Governance Matters 2009, WORLDWIDE GOVERNANCE INDICATORS 1996–2008. World Business Council for Sustainable Development. (2002). Breaking new ground: mining, minerals, and sustainable development: the report of the MMSD project: London/Sterling, Va., Earthscan Publications. World Economic Forum. (2014). Global Gender Gap Index 2014. Retrieved from http://reports.weforum.org/global-gender-gap-report-2014/rankings/

157

World Economic Forum. (2014-15). The GlobalCompetitiveness Report 2014-15. Retrieved from http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2014- 15.pdf Yamamoto, S., & Takimoto, A. (2012). Empathy and Fairness: Psychological Mechanisms for Eliciting and Maintaining Prosociality and Cooperation in Primates. Social Justice Research, 25(3), 233-255. doi:10.1007/s11211-012-0160-0 Zell, J. L. (2006). Putting a mine on the moon: creating an international authority to regulate mining rights in outer space. Minnesota Journal of International Law, 15(2), 489. Zulu, L., & Wilson, S. (2012). Whose Minerals, Whose Development? Rhetoric and Reality in Post‐Conflict Sierra Leone. Development and Change, 43(5), 1103-1131. doi:10.1111/j.1467-7660.2012.01788.x

158

Appendices And Supplemental Materials

Appendix 0-1: Systems of Property Ownership This chart was assembled from the following sources: (Aristotle & Reeve, 2009; Australian Government Solicitor, 1998; R. Barnes, 2009; Blackstone & Warren, 1856; Bouckaert, 2010; Britain, Turk, & Alfred, 1893; Coleman, 1988; Feder & Feeny, 1991; Friedman, 1970; Johnson, 2010; Larschan & Brennan, 1983; Levine, 2005; Locke, 1689; Ostrom & Ebooks, 1990; James M. Otto, 1998; Paine, 1797; Roark, 2012; Rose, 1998; Sprankling & Ebscohost, 2014; Stephenson & Ratnapala, 1993; Sutcliffe, 2012; J. A. C. Thomas, 1975; Tiess, 2011; R. A. Williams, 1983).

Open access property Description Examples Institutes of Justinian, Ocean before Law of the Sea, Res nullius empty or unoccupied Space resources Australia during colonization, Terra nullius empty or unoccupied land Antarctica before agreement, Ocean, rivers, seashores up to high tide line, wild game, atmosphere, surface water, (1) They may not be harbors, groundwater. appropriated; and (2) "use Hardin's "Tragedy of the of them belongs equally 'Commons'"; note-this is not a to all people. Open to commons but is open access Res communis everyone (Open access) or terra nullius)

State/crown (or Papal) Property Description Examples Res publicae belonging to the state Institutes of Justinian Christian philosophy of divine right to hegemony Manifest destiny over a continent US 500-1500AD Popes claim of divine authority over all land essentially in the Hierocratic-ecclesia world Romanus Ponifex 1455 1500-Rejection of Popes hierocratic claim and Renaissance assertion of secular Humanism authority St. Thomas, Victoria Substitution of monarch Rights of the absolute rights over Sovereign Popes religious right UK, Spain

159

British land system Feudal system of vesting all property in the “tenures” monarch or sovereign UK Assertion of title over land due to discovery of terra Discovery nullius or empty land Claimed in Australia Three methods in Conquest, cession common law to acquire and occupation title over land British Law An assertion of land claims over "inferior assimilation and people" by settlement of appropriation of native people Colonization their land as a strategy

Private Property Description Examples “Cuius est solum, eius est usque ad coelum et ad infernos” (Latin: "whoever's is the soil, it is theirs all the way to Heaven and all the way to Institutes of Justinian, hell") This doctrine is also Blackstone’s Commentaries known as the ad coelum on the Laws of England, US Res privatae doctrine law “Improvement” refers to building structures or farming on undeveloped land. Thus by “settling” and “improving” land, an Settlement and occupier gains ownership Improvement rights. British Law Laws established by Common law judicial precedent rather precedent than civil code or statute. British Law

Communal Property Description Examples res communis, expanded to groundwater, atmosphere, etc. but Ocean, rivers, seashores, government has wild game, atmosphere, obligation to manage and environment, Magna Carta, Public Trust Doctrine preserve Law of the Forest Shared inheritance of all people. No exclusive Law of the Sea (UNCLOS), Common Heritage of private property. Must be Antarctica, Outer Space Mankind (CHM) shared with everyone. Treaty

160

A thing owned by the community for public purposes and that cannot be acquired by any Institutes of Justinian individual or subgroup. City, corporation, tribe, Usable by an individual as village, community, etc. a member of the Common Pool Resources Res universitatis community in question (Ostrom) Communal usufructuary Native Title ownership (usually) Australia, US, Canada, Africa Ancient Greece, British A Commonwealth For the Common Good Commonwealth, US

Appendix 0-2: National Ownership Categories and Classification (Flomenhoft, 2018) Category Classification Sub-categories Monaco, St. Lucia, St. No minerals n/a Vincent & Grenadines, Samoa, San Marino, Hong Kong, Palestine

Zambia, Zimbabwe, President/Ruler President/Ruler Brunei Darussalam, President for the state Malawi President on behalf of state

Afghanistan, Albania, State or crown state on behalf of the people Andorra, Angola, Antigua state to the benefit of the and Barbuda, Armenia, people Azerbaijan, Bahamas, state for the people Bahrain, Bangladesh, state/public domain Barbados, Belarus, crown Belize, Benin, Bhutan, crown in right of states Botswana, Brazil, state/President Bulgaria, Burkina Faso, Republic/President/People Burundi, Cambodia, Cameroon, Cape Verde, Central African Republic, Chad, Chile, China, Colombia, Comoros, Congo-DPR, Congo-Rep, Costa Rica, Cote d’Ivoire, Croatia, Cuba, Cyprus, Czech Republic, Denmark, Djibouti, Dominica, Dominican Republic, Ecuador, El Salvador, Equatorial Guinea, Eritrea, Fiji, France, Gabon, Gambia, Georgia, Ghana,

161

Grenada, Guatemala, Guinea, Guinea-Bissau, Guyana, Haiti, Honduras, Hungary, Indonesia, Iran, Ireland, Israel, Italy, Jamaica, Japan, Jordan, Kazakhstan, Kenya, Korea-Rep, Kosovo, Kuwait, Kyrgyz Republic, Lesotho, Liberia, Libya, Liechtenstein, Lithuania, Luxemburg, Macedonia, Madagascar, Malaysia, Maldives, Mali, Malt, Malta, Mauritania, Mauritius, Mexico, Montenegro, Morocco, Mozambique, Myanmar, Namibia, Nepal, Netherlands, New Caledonia, New Zealand, Nicaragua, Niger, Nigeria, Norway, Oman, Pakistan, Panama, Papua New Guinea, Paraguay, Peru, Philippines, Poland, Qatar, Russian Federation, Rwanda, St. Kitts & Nevis, Sao Tome & Principe, Saudi Arabia, Senegal, Serbia, Seychelles, Sierra Leone, Slovakia, Slovenia, Somalia, South Sudan, Spain, Sri Lanka, Sudan, Suriname, Swaziland, Taiwan, Tajikistan, Tanzania, Thailand, Timor-Leste, Togo, Tonga, Turkey, Trinidad & Tobago, Uganda, United Kingdom, Uruguay, Uzbekistan, Yemen

Algeria, Bolivia, Egypt, People common/public/collective Ethiopia, Iraq, Laos, (Common,Communal) people and state Moldova, Mongolia, people managed by the Portugal, Romania, state common/state/people Solomon Islands, South people/regions Africa, Syrian Arab

162

Republic, Tunisia, national community/state Ukraine, United Arab management Emirates, Vietnam, public or public/state Turkmenistan, Venezuela people under state protection Public domain (of the state) common/state custodian people/state public/people/managed by the state public/state Nauru, Palau, Kiribati, Customary landowners Most independent Pacific Bougainville, Tuvalu, islands with minerals Vanuatu Argentina, Australia, Decentralised/mixed Province/canton Austria, Belgium, Bosnia State/claimant/landowner & Herzegovina, Canada, Province/regional/claimant Greece, India, other states where Switzerland, United ownership was States decentralised to provinces, cantons, municipalities, landowners, and different ownership at different levels of government mixed ownership Finland, Germany, Claimant/landowner claimant with state Iceland, S. Korea, Latvia, management Lebanon, Singapore, claimant/ownerless Sweden any other country where ownership could be granted to individual owners, either landowners or claimants

163

Appendix 0-3: National Mineral Title Laws and HDI (Flomenhoft, 2018)

COUNTRY Total = 199 OWNERSHIP HDI 2014 No Minerals n=7 Monaco None .. Saint Lucia None 0.729 Saint Vincent and Grenadines None 0.720 Samoa None 0.702 San Marino None .. Hong Kong, China (SAR) None 0.910 Palestine, State of None 0.677 0.748 mean

President/Ruler n=5 Zambia President/state 0.586 Zimbabwe President 0.509 Brunei Darussalam President/Ruler 0.856 Republic/President/ Ghana people 0.579 President on behalf of Malawi people 0.445 0.595 mean

State/Crown n=142 Afghanistan state 0.465 Albania state 0.733 Andorra state 0.845 Angola state 0.532 Antigua and Barbuda crown 0.783 Armenia state 0.733 Azerbaijan state 0.751 Bahamas state 0.790 Bahrain state 0.824 Bangladesh state 0.570 Barbados state 0.785 Belarus state 0.798 Belize state 0.715 Benin state 0.480 Bhutan state 0.605 Botswana state 0.698 Brazil state 0.755

164

Bulgaria state 0.782 Burkina Faso state 0.402 Burundi state 0.400 Cambodia state 0.555 Cameroon state 0.512 Cape Verde state 0.646 Central African Republic state 0.350 Chad state 0.392 Chile state 0.832 China state 0.727 Colombia state 0.720 Comoros state 0.503 Congo-Rep state 0.591 Congo-DPR state 0.433 Costa Rica state 0.766 Cote d'Ivoire state 0.462 Croatia state 0.818 Cuba state 0.769 Cyprus crown 0.850 Czech Republic state 0.870 Denmark state 0.923 Djibouti state 0.470 Dominica state 0.724 Dominican Republic state 0.715 Ecuador state 0.732 El Salvador state 0.666 Equatorial Guinea state 0.587 Eritrea state 0.391 Estonia state 0.861 Fiji state 0.727 France state 0.888 Gabon state 0.684 Gambia crown 0.441 Georgia state 0.754 Grenada Crown 0.750 Guatemala state 0.627 Guinea state 0.411 Guinea-Bissau state 0.420 Guyana state 0.636 Haiti state 0.483 Honduras state 0.606 Hungary state 0.828 state to the benefit of Indonesia the people 0.684

165

Iran state 0.766 Ireland state 0.916 Israel state 0.894 Italy state 0.873 Jamaica crown (mainly) 0.719 Japan State 0.891 Jordan state 0.748 Kazakhstan state 0.788 Kenya state 0.548 Korea (DPR) state .. Kosovo state .. Kuwait state 0.816 Kyrgyz Republic state 0.655 Lesotho state 0.497 Liberia state 0.430 Libya state 0.724 Liechtenstein state 0.908 Lithuania state 0.839 Luxemburg state 0.892 Macedonia state 0.747 Madagascar state 0.510 Malaysia state 0.779 Maldives state 0.706 Mali state 0.419 Malta state 0.839 Mauritania state 0.506 Mauritius state 0.777 Mexico state 0.756 Montenegro state 0.802 Morocco state 0.628 Mozambique state 0.416 Myanmar state 0.536 Namibia state 0.628 Nepal state 0.548 Netherlands state 0.922 New Caledonia state .. New Zealand crown 0.913 Nicaragua state 0.631 Niger state 0.348 state on behalf of the Nigeria people 0.514 Norway state 0.944 Oman state 0.793 Pakistan state 0.538 Panama state 0.780

166

Papua New Guinea state 0.505 Paraguay state 0.679 Peru state 0.734 Philippines state 0.668 Poland state 0.843 Qatar state 0.850 Russian Federation state 0.798 Rwanda state 0.483 Saint Kitts and Nevis crown 0.752 Sao Tome & Principe state 0.555 Saudi Arabia state 0.837 Senegal state 0.466 Serbia state 0.771 Seychelles state 0.772 Sierra Leone state 0.413 Slovakia state 0.844 Slovenia state 0.880 Somalia state .. South Sudan state for the people 0.467 Spain state 0.876 Sri Lanka state 0.757 Sudan state 0.479 Suriname state 0.714 Swaziland state 0.531 Taiwan state .. Tajikistan state 0.624 Tanzania (United Republic of) state 0.521 Thailand state 0.726 Timor-Leste state 0.595 Togo state/public domain 0.484 Tonga crown 0.717 Turkey state 0.761 Trinidad & Tobago state/President 0.772 Uganda state 0.483 United Kingdom crown 0.907 Uruguay state 0.793 Uzbekistan state 0.675 Yemen state 0.498 0.673 Mean

People/Common/ Collective n=19

167

common/public/ Algeria collective 0.736 Bolivia people and state 0.662 people managed by Egypt the state 0.690 Ethiopia common/state/people 0.442 Iraq people/regions 0.654 national community/state Laos mgmt. 0.575 Moldova public 0.693 people under state Mongolia protection 0.727 Portugal Public domain 0.830 Romania public/state 0.793 Solomon islands people and state 0.506 common/state South Africa custodian 0.666 Syrian Arab Republic public/state 0.594 Public domain of the Tunisia state 0.721 Ukraine people/state 0.747 United Arab Emirates Public 0.835 public/people/manage Vietnam d by the state 0.666 Turkmenistan people and state 0.688 Venezuela public/state 0.762 0.683 Mean

“Customary” Landowners n=8 Marshall Isles landowners .. Micronesia landowner 0.640 Nauru landowner .. Palau landowner/state 0.780 Kiribati customary landowners 0.590 Bougainville customary landowners .. Tuvalu customary landowners .. Vanuatu customary landowners 0.594 0.651 Mean

Decentralised/ Mixed n=10 Argentina Province/canton 0.836

168

Crown in right of the states, some Australia landowners 0.935 mixed: State, claimant, Austria landowner 0.885 Province/regional/ Belgium claimant 0.890 mixed: Bosnia & Herzegovina federal/Cantons 0.733 Crown/Provincial/ Canada landowner 0.913 mixed: state, claimant, Greece landowner 0.865 states and federal India government 0.609 Switzerland Province/canton 0.930 mixed: State, claimant, United States landowner 0.915 0.851 Mean

Claimant/Ownerless/ Landowner n=8 Finland claimant/ownerless 0.883 Germany claimant/ownerless 0.916 Iceland landowner 0.899 Korea(Rep) claimant/state mgmt. 0.898 Latvia landowner 0.819 Lebanon landowner 0.769 Singapore claimant/ownerless 0.912 Sweden claimant/landowner 0.907 0.875 Mean

169

Appendix 0-4: Summary of Bafokeng Benefit Survey

609

total

n/a

0.8%

35.0% 23.3% 28.3% 12.5%

120

100.0%

strongly

disagree

n/a

2.9%

35.2% 31.4% 18.6% 11.9%

210

100.0%

disagree

7.8% 0.0% 0.0%

128

39.1% 25.0% 16.4% 11.7%

neutral

100.0%

5.7%

140

17.1% 51.4% 25.7%

agree

100.0%

63.6% 36.4%

agree

100.0%

strongly

ons,

ools, water,

Numberof answers

are,transportation,

Details

benefits/They're trying

ter, electricity, ter,

job,house, bursary, RDP house, roads,lights, sch job,economic/business

unemployment, underemployment unemployment, Nepotism, bad corruption, electricity, water, electricity development, schools/education/training, health care,bursary, security/police, Services/basicneeds met, sports, wa Toilets/sanitation/trash, Infrastructure/facilities,housing, 50/50some services, not enough, someservices, benefits/ basic needs met,some and unemployment,youth Outsiders for hired jobs, racism (favoritism in hiring) Lackingservices, infrastructure, schools,health c recreation,sanitation, poor infrastructure/services/utilities, educational opportunitieslacking, lackcrime, of security, Poor transportationincluding to school, Needsnot met/services lacking management, don'tthey care, don't listento use, village ignored,greed, favoritism,information No from RBA, falsepromises improvement/no no development/no benefits, poverty,poor conditi suffering,hunger damagehomes to frommines with no compensation,mines not helping

Bad Bad

Blank

Mines

ervices

Lacking

Services Services

Personal

Benefits: Benefits: Provided Provided

Proble

Favorable

Conditions

Community

Category Unfavorable

Management

Employment:

Infrastructure

Some Some S

Unemployment

170

Appendix 0-5: Statistical Analysis of Satisfaction Factors (Bafokeng Survey)

In order to evaluate these factors, analysis was conducted by linear regression using

SPSS software (IBM, Armonk, NY, USA). A multiple linear regression analysis was developed using satisfaction or dissatisfaction with benefits from RBA services as the dependent variable. Three factors were included as independent variables. Distance from Phokeng was used to capture the complaint that outlying villages were not receiving the same level of services. Employment status was used as survey responses indicated that it was an important factor for satisfaction or dissatisfaction.

Proximity to the mines was used as a third factor, as that was also cited in surveys as a source of dissatisfaction. Proximity to mines was difficult to determine since there are so many mine shafts present, so the territory was divided into the platinum area and the non-platinum area coinciding with the nw-se running platinum belt that divides the Bafokeng area roughly in half (Figure 8). Towns to the west were counted as in the platinum belt, towns to the east were counted as not in the belt.

‘Employed’ and ‘platinum belt’ were entered as ‘dummy’ variables, with 1 being yes, and 0 being no. Distance from Phokeng was entered in km as measured in distance by road on google maps. The total number of surveys entered was 492, since one survey was removed from Greenslopes, a suburb of Johannesburg. The distance from

Phokeng made it an outlier.

Findings of Analysis

The regression model was examined for multicollinearity and while the correlation between platinum belt and distance was r=-0.73 (shown in Table 16) the VIF statistics

171 were satisfactory (between 1.02 and 2.19), and the average value of 1.791

[(1.02+2.185+2.168)/3], is close to one, confirming that collinearity is not a problem for this model.

Summary of the Model

The regression statistics are shown in the Model Summary and Coefficients table. The three variables contributed significantly to the regression model, together accounting for 24 per cent (R2=.241) of the variation in satisfaction with services, F(3,486)=51.56, p<.001.

With all variables entered into the model, all were found to significantly contribute to satisfaction: Employment Status (β=0.28, sr2=0.28, p<.001), Distance (β=-0.51, sr2=-

0.35, p<.001), Platinum Belt (β=-0.27, sr2=-0.19, p<.001.

The unstandardised co-efficient for employment was B=0.63 meaning an employed person was predicted to have a .63 higher response on the scale for satisfaction with services. That is nearly 2/3 of a point higher if the person was employed. For the

Platinum Belt variable the unstandardised coefficient was B=-0.67, meaning -2/3 point if they were in the platinum belt. Due to the lack of local employment in the mines, environmental and social disruption, many Bafokeng tend to see the mines as a negative, despite the revenue the tribe as whole receives.

The unstandardised coefficient for Distance from Phokeng was B=-0.05 pts per km from Phokeng. That translates into -1 point on the satisfaction with services scale for every 21 km from Phokeng. The furthest villages were Tlapa at 44.3km, Tantanana at 45.3km, and Mamerotse at 40.8km corresponding to 2 points lower at this distance.

Consistent with this finding is the fact that when conducting our survey in Tlapa we

172 were threatened with violence if we did not leave, such was the hostility towards the

Bafokeng Administration, who we were seen as representing.

It is noteworthy that a reduction of up to two points in satisfaction could be obtained due to distance from Phokeng, while employment and proximity to mines resulted in an increase or reduction of only 2/3 of a point in satisfaction. However, this can be explained by the fact that employment and proximity to mines were dummy variables, which are only average figures, while distance was measured in kilometres and satisfaction was proportional to distance.

To determine the relative significance of the three factors we can look at the standardised coefficients, which put all independent variables (predictors) on the same scale based on the effect of one standard deviation from the mean on the dependent variable. Using standardised coefficients we find that being employed and being in the platinum belt have approximately the same magnitude (0.28 vs. -0.27), although in opposite directions, as we have already found; employment raising satisfaction and living in the platinum belt decreasing satisfaction. Distance from Phokeng has nearly double the impact of the other two factors with a standardised coefficient of -0.51, so distance is the most important factor of the three.

173

Bafokeng Satisfaction Survey Regression Model

174

Appendix 0-6: Survey Questionnaire: An Inquiry into the Economic Commonwealth of Mineral Resources-Royal Bafokeng Nation

Mafokeng? Y / N Employment Status______Age______Occupation______Gender______

Marital status______Kgotla (clan)______

1. In South Africa generally who owns the platinum mineral resources (in the ground) from the following list? a. National government b. President c. Corporations d. Tribe (Communal) e. Individual f. Other-name

2. In the Royal Bafokeng Nation who owns the platinum mineral resources (in the ground) from the following list? a. National government b. Corporations c. Tribe (Communal) d. Kgosi e. Individuals f. Other-name

3. Who should own the platinum in the Royal Bafokeng Nation?

4a. The Royal Bafokeng Administration services benefit you or your family. Strongly agree agree neutraldisagree strongly disagree b. why?

5. How would you allocate the RBN budget?

6. Please add any other comments:

175

Appendix 0-7: Participant Info Sheet (Survey)

Project Title- An Inquiry into the Economic Commonwealth of Mineral Resources-Royal Bafokeng Nation Case Study

Introduction Hello, my name is (translator) and this is Gary Flomenhoft from the University of Queensland in Australia, who is doing research on minerals in the Royal Bafokeng Nation.

Project Overview This research project is an attempt to understand what people think about ownership of minerals, in the specific case of the Royal Bafokeng Nation.

Participant involvement . This survey is completely voluntary . This survey is anonymous . You are invited to answer questions on the topic of ownership of platinum in the Royal Bafokeng Nation . This survey will take 10 minutes

Possible discomforts and risks . There is no foreseeable risk from this study over and above those faced by you in everyday living. If you have any concerns about the issues discussed on the questionnaire, please do not hesitate to raise these with the facilitator or The University of Queensland with contact information below.

Confidentiality . No one’s name will be recorded so there is no possibility of being identified. . Your answers will be treated confidentially and the information will be stored in a secure area that is not accessible to any individuals other than the research team. . In any publications arising from this study, responses will remain anonymous.

176

Withdrawal from Participation . Your participation in this research project is entirely voluntary and you may withdraw at any time without penalty. . If you wish to withdraw from the study, you may simply notify the focus group facilitator verbally, in writing, via email, or notify The University of Queensland on the email below. If you decide to withdraw, I agree not to use, and destroy any data associated with you, as much as is possible, from the research. However, after the research has been published it will no longer be possible to delete your contribution. Feedback on the study If you would like to receive a copy of the findings or have any comments please contact: Gary Flomenhoft Centre for Social Responsibility in Mining, Sustainable Minerals Institute Sir James Foots Building #74 University of Queensland St. Lucia, QLD 4072 +61 7 3346 4027 office, +61 4 3898 4818 mobile [email protected]

Project supervisor: Kathryn Sturman Centre for Social Responsibility in Mining University of Queensland Sustainable Minerals Institute Sir James Foots Building #74 St. Lucia, QLD 4072 +61 7 3346 4006 office [email protected]

Queries and Concerns University of Queensland Ethical Clearance Paragraph "This study adheres to the Guidelines of the ethical review process of The University of Queensland and the National Statement on Ethical Conduct in Human Research. If you have any queries about the project please feel free to contact the Chief Investigator of the project, Gary Flomenhoft, through the Bafokeng Civic Centre Office at +27 14 566 1447, or email [email protected]. If you would like to speak to an officer of the University not involved in the study, you may contact the Ethics Coordinator on +61 7 3365 3924.”

177

Appendix 0-8: Permission Document from Bafokeng Government

178

Appendix 0-9: Ethics Approval Form-Bafokeng Survey Project

CLEARANCE NOº

(office use only) 17-002 (16 Jan, 2018) Application Form for Ethical Clearance for

Research Involving Human Participants

17-002 For review by:Medical Research Ethics Committee (MREC) Behavioural & Social Sciences Ethical Review Committee (BSSERC) For Staff and Student Research Refer to last page for website and other information, including mailing address

Please tick boxes: MREC BSSERC X

Full Review Expedited X Review

ALL QUESTIONS MUST BE ANSWERED Minimum 12-point font Define any acronyms and abbreviations used

Project Title: An Inquiry into the Economic Commonwealth of Mineral Resources- Royal Bafokeng Nation Case Study

Principal Investigator: Gary Flomenhoft Staff Noº/Student Noº: 43622744 (cross out if not relevant)

Co-Investigator/s:

179

Project Co-ordinator (or Gary Flomenhoft authorised contact)

Supervisor/s: (if applicable) Kathryn Sturman, Saleem Ali

Schools/Departments: Sustainable Minerals Institute-Centre for Social Responsibility in Mining

Telephone Fax Email Contact details of Principal +61 4 3898 +61 7 3346 4045 [email protected] Investigator 4818 mobile Contact details of Project Co-ordinator or authorised contact

Degree Enrolled (if student): PhD Funding Body: None

If Project Funded - What year? N/AN/A - Reference no. if available

Project Phokeng, South Africa Project 1 month Location: Duratio n: A. Is this submission identical or very similar to a previously approved protocol? YES/NO (circle) If YES, please provide clearance noº and indicate whether identical or very similar):______

180

B. Does this submission hold other ethical clearance? YES/NO Note: Copies from other AHEC registered ethics committees must be attached. (circle)

C. Are you applying for Expedited Review? YES/NO Note: Please see UQ Guidelines page 10 for the conditions necessary to qualify for Expedited Review. (circle)

D. Is the project a Clinical Trial (eg, a trial of a drug, device, therapy, intervention,YES/NO treatment, etc)? [refer to end of this form dealing with “clinical trials”] (circle) If YES, please specify:______

181