From Fragility to Resilience Managing Natural Resources in Fragile Situations in Africa Transition Support Department AfDB_frontcover.indd 1 12/8/15 3:01 PM From Fragility to Resilience Managing Natural Resources in Fragile Situations in Africa February 2016 AfDB_A01.indd i 12/8/15 5:04 PM Cover photos: Background, left to right (Row 1 – AfDB; Enough Project; Enough Project, Nenad Marinkovic; Enough Project, Tim Freccia; Enough Project, Laura Heaton; AfDB. Row 2 – AfDB; Enough Project, Um Bartumbu; Enough Project, Doug Mercado. Row 3 - Enough Project, J. Fowler/USHMM; Enough Project, Sasha Lezhnev; United States Geological Survey; Enough Project, Tim Freccia; Enough Project, Doug Mercado. Row 4 – Enough Project, Saied Mohammed; Enough Project, Sasha Lezhnev; Enough Project, Doug Mercado; Enough Project, Nenad Marinkovic; Enough Project. Row 5 – Enough Project, Laura Heaton; Enough Project, Sasha Lezhnev; Enough Project, Laura Heaton; Enough Project, Amanda Hsiao; Enough Project, Nenad Marinkovic; Enough Project, Laura Heaton.) Foreground, left to right (Row 1 – AfDB; AfDB; AfDB. Row 2 – AfDB; Bocar Thiam; Carl Bruch; AfDB. Row 3 – AfDB; AfDB; AfDB; AfDB. Row 4 – AfDB; AfDB; AfDB; AfDB. Row 5 – AfDB. © 2016 African Development Bank Group All rights reserved. Published 2016. Printed in Côte d’Ivoire. Report prepared by: Ilona Coyle (Consultant) and Carl Bruch (Co-Director of International Programs, Environmental Law Institute). On behalf of the Transition Support Department of the African Development Bank (AfDB) under the supervision of: Sibry Tapsoba, Director. This report was prepared by the Environmental Law Institute for the Transition Support Department of the African Development Bank. The fi ndings and terminologies including the use of the expression ‘fragile states’ are the opinions of the authors and not necessarily those of the African Development Bank or its Board of Directors. Every effort has been made to include inputs by Bank staff, staff of state governments in fragile situations, development partners, and other stakeholders. The African Development Bank (AfDB) does not guarantee the accuracy of the data included in this publication, and accept no responsibility for any consequence of their use. By making any designation of or reference to a particular territory of geographic area, or by using the term ‘country’ in this document, AfDB does not intend to make any judgments as to the legal or other status of any territory or area. AfDB encourages printing or copying exclusively for personal and non-commercial use with proper acknowledgement of AfDB. Users are restricted from reselling, redistributing or creating derivative works for commercial purposes without the express, written consent of AfDB. African Development Bank Group Immeuble du Centre de commerce international d’Abidjan CCIA Avenue Jean-Paul II 01 BP 1387 Abidjan 01, Côte d’Ivoire Phone: +225 20 26 10 20 Email: [email protected] Website: www.afdb.org AfDB_A01.indd ii 12/8/15 5:04 PM TC Ta ble o f C o n ten ts Acronyms ......................................................................................................................... vii Foreword ........................................................................................................................... ix Preface .................................................................................................................................xi Acknowledgements ..............................................................................................xiii 1. Overview .................................................................................................................. 1 1.1 Fragility, Resilience, and Natural Resources ............................................................... 2 1.2 Natural Resources, Confl ict Dynamics, Peacebuilding, and Statebuilding .................. 4 1.3 Natural Resources, Fragility, and Bank Strategies and Activities............................... 12 1.4 The Global Context of Natural Resource Management in Fragile States................... 15 1.5 Objectives, Scope, and Methodology ...................................................................... 15 2. Extractive Industries: Oil, Gas, and Minerals ...................21 2.1 Value Chain and Supply Chain Approaches to Extractive Industries Governance ............................................................................................................ 23 2.2 Tracking Minerals to Prevent Abuses within the Supply Chain ..................................24 2.3 Formalizing Safe and Profi table Artisanal and Small-Scale Mining ............................27 2.4 Managing the Environmental and Social Impacts of Resource Extraction................. 29 2.5 Planning for the End of Resource Extraction ............................................................31 2.6 Recommendations ..................................................................................................32 AfDB_A01.indd iii 12/8/15 5:04 PM TC Managing Natural Resources in Fragile States in Africa 3. Renewable Resources: Water, Land, and the Livelihoods They Support....................................................................................................................37 3.1 Maximizing the Productive Potential and Access to Renewable Resources .............................40 3.2 Reducing Demands on Renewable Resources ........................................................................44 3.3 Identifying and Including All Stakeholders in Renewable Resource Decision Making ................45 3.4 Allocating Rights and Making Decisions Related to Renewable Resources ..............................48 3.5 Administering, Resolving Disputes, and Enforcing Rights to Renewable Resources .................51 3.6 Recommendations ..................................................................................................................52 4. Infrastructure and Natural Resources: Electricity, Roads, Water Supply, and Sanitation ..........................................................................57 4.1 Using Infrastructure to Address Horizontal Inequalities.............................................................58 4.2 Infrastructure Governance in Fragile States .............................................................................62 4.3 Engaging Small-Scale and Large-Scale Private-Sector Service Providers ................................67 4.4 Green Infrastructure in Fragile States .......................................................................................69 4.5 Recommendations ..................................................................................................................69 5. Climate Change: Mainstreaming Adaptation and Mitigation into Natural Resource Sectors ..........................................73 5.1 Adaptation to Climate Change ................................................................................................74 5.2 Climate Change Mitigation ......................................................................................................76 5.3 Leveraging Climate Finance for Fragile States in Africa ............................................................80 5.4 Recommendations ..................................................................................................................81 6. Governance ........................................................................................................................85 6.1 Transparency, Participation, Access to Justice, and Legal Pluralism ........................................87 6.2 Data Collection and Management ...........................................................................................92 6.3 Vulnerable Populations ............................................................................................................98 6.4 Combatting Corruption .........................................................................................................101 6.5 Recommendations ................................................................................................................103 7. Concessions and Revenue Management .......................................109 7.1 Concessions .........................................................................................................................110 7.2 Revenue Management ..........................................................................................................120 7.3 Recommendations ................................................................................................................124 8. The Private Sector .....................................................................................................129 8.1 Creating a Stable Regulatory Environment for Private-Sector Growth ....................................130 8.2 Using Voluntary Guidelines to Improve Private-Sector Performance in Fragile States ........................................................................................................................130 8.3 Promoting Transparency and Communication with Stakeholders ...........................................134 8.4 Supporting Value-Added Production and Rebuilding and Strengthening Value Chains ............................................................................................................................134 8.5 Facilitating Access to Credit for Natural Resource–Related Sectors .......................................138 iv AFRICAN DEVELOPMENT