Policy recommendations

  • The European Union should allow ACP countries to maintain their sovereignty and policy space in relation to the appropriate use of their own natural resources. They should be able to use investment regulations, tariff barriers and export restrictions to promote equitable, local and sustainable economic development.
  • The European Commission through its development policy should stimulate resource-rich developing countries to implement their own industrial policies, to protect their infant industries by using legitimate barriers to trade, and by introducing environmental measures. This should allow resource-rich developing countries to move up the value chain, so that the added value to (semi) processed products will remain in the country of origin and would thus stimulate economic development.
  • Within its development budget the EU should allocate sufficient resources to the building of energy and environmental infrastructure to enable developing countries to stimulate economic development.
  • The EU should use its political and economic power to set clear rules in relation to the extraction of raw materials. Like suggested in the February 2011 RMI update an EU code of conduct for EU companies operating in third countries should be developed and measures should be taken to enforce such a code of conduct.
  • In order to provide for more transparency in the supply chain and to minimize the role of European companies in fuelling conflicts over resources, the EU should implement Country by Country reporting, following the US example of the Dodd Frank Act.
  • Within the EPA negotiations the EU should be more flexible as suggested in the RMI update and make sure developing countries can demonstrate the use of export taxes as a policy tool and therefore keep using them.
  • In all policy initiatives and actions elaborated on the basis of the strategy laid down in the Raw Materials Initiative that affect developing countries, DG Development should be closely involved, and ACP partner countries and civil society organisations should be consulted.

 

 

Case: Raw Materials Initiative

28-06-2011 Raw Materials discussed thoroughly in the European Parliament!

On behalf of the ITRE committee, Reinhard Bütikofer (Greens/EFA) wrote 'an effective raw materials strategy for Europe' as the European industry is facing an increasingly difficult situation with regards to the supply of raw materials. This is particularly the case for the 14 critical raw materials, which the European Commission identified. Increasing global demand coupled with a lack of supplies due to long lead-times in the mining industry and the increased use of export restrictions by resource-rich countries, are not only pushing prices to record heights, as is the case with copper, but are also leading to potential supply shortages.

In the report Bütikofer also paid attention to the development angle to raw materials. As he mentions that the EU must establish mutually-beneficially partnerships with resource-rich countries in order to create a win-win situation. The European Commission should also ensure that EU companies adhere to environmental and social standards in their work abroad so as to further cement good EU relations with resource-rich countries. In this context, the European Union should follow the US lead on the Dodd-Frank bill and require companies to disclose whether they source their resources from conflict regions and require extractive industries to disclose their payments to foreign governments in order to enhance transparency and ensure good governance.

Furthermore, in order to make a credible partnership offer to resource-rich countries, the European Union should not misuse the tool of development policy for such purposes. This is particularly the case for the general system of trade preferences (GSP) or the European Development Fund.

On the draft report no less than 279 amendments were written of which most were minor changes. Fair Politics selected the ones in which the EUs development objectives are underlined.

First of all, in amendments 1, 2, 5, 6, 7, 10, 65, 223 and 263 Policy Coherence for Development is mentioned by several MEPs (Reinhard Butikofer (Greens/EFA), Marita Ulvskog (S&D), Judith A. Merkies (S&D) and Fiona Hall (ALDE)) as Europe´s raw materials policy should take the sustainable economic growth in the developing countries and their specific social standards into full account (as enshrined in Art. 208 TFEU) and ensure coherence between development policy. The RMI should support developing countries to diversify their economies, reduce their dependence on raw materials exports and increase the value of their products through domestic manufacturing and processing. EU's Raw Material strategy should reflect the differences between developed and major emerging economies on the one hand and Least Developed Countries on the other (amendment 258, Fiona Hall (ALDE)).

Next to this, some amendments were written on the trade agreements; trade agreements should provide the necessary flexibility to support developing countries in creating linkages from the extractive industry towards local industry; underlining that free and fair trade is of central importance to the development of the global RM sector and wealth creation in all societies; resource sovereignty must be respected (Marita Ulvskog (S&D) and Judith A. Merkies (S&D), amendment 259 and Lena Ek (ALDE), amendment 233). Finally, Vladko Todorov Panayotov (ALDE) calls, in amendment 237, on the Commission to use its political leverage to reform the multilateral rules on export restrictions, encouraging the consistency of the Commission's efforts in this field with the EU's other policy priorities promoting economic development and environmental sustainability in low income developing countries or vice-versa, which implies that the other EU policies should be consistent with its raw materials strategy.

On this report by the Industry, Research and Energy committee an opinion was written by the Development committee which is monitored below.

On behalf of the DEVE committee, Birgit Schnieber-Jastram (EPP) wrote an opinion on the report: 'effective raw materials strategy for Europe' by the ITRE committee as was presented above. The DEVE committee calls on the ITRE committee to recall their obligations regarding Policy Coherence for Development, as article 208 of the Lisbon Treaty requests. The DEVE committee is concerned about the negative effects the expiry of the GSP regulations have on developing countries, as the Raw Material Initiative (RMI) does not refer to GSP or GSP+, or proposes an alternative trade incentive for the promotion of human rights, environmental standards and domestic reforms. Next to this, the DEVE committee calls on the Commission to present a proposal on transparency and accountability in the extractive industry founded on the standards of the Extractive Industries Transparency (EITI), EITI+ and on the Dodd-Frank act which deal with conflict minerals. 

Furthermore, a stronger international cooperation is requested between the EU and emerging economies like China, Brazil and India. The European Investment Bank must consider which projects contribute to poverty eradication, sustainable development and inclusive growth when deciding on supporting the extractive industries sector in developing countries.

On this report 47 amendments were written, many are minor changes making the opinion stronger and more clear. Fair Politics particularly welcomes the amendments regarding enhancement of EUs development objectives. 

Asa Westlund (S&D) recalls that the RMI is criticised by developing countries and NGO for undermining the development objectives and not complying with EUs commitment to PCD (amendment 2). and that the RMI must take sustainable economic growth and their specific social standards into account (amendment 11). Gabriele Zimmer (GUE/NGL) (amendment 5), Asa Westlund (S&D) (amendment 11), Ricardo Cortés Lastra (S&D) (amendment 17), Fiona Hall (ALDE) (amendment 18) and Birgit Schnieber-Jastram (EPP) (amendment 29), call on the Commission to support developing countries in diversifying their domestic economies and building up local production and processing capacity.  

In the call to fight against poverty, the Commission must respect the rights of developing countries to allow export restrictions in the public interest (Gabriele Zimmer (GUE/NGL), amendment 10 and Kriton Arsenis (S&D), amendment 19), as the current trade pattern has locked developing countries in permanent poverty (Judith Sargentini (Greens/EFA), amendments 12 and 28).

Next to the legislative proposal of the Dodd-Frank act, the Commission must ensure that their purchases are not profiting armed groups and abuse human rights (Fiona Hall (ALDE), amendment 21) and European companies operating in developing countries must set an example of social responsibility and must promote decent work (Patrice Tirolien (S&D), amendment 24). 

Companies not applying the EU standards in developing countries must be deprived of any form of European funding (Kriton Arsenis (S&D), amendment 25; Gabriele Zimmer (GUE/NGL), amendment 35 and Thijs Berman (S&D), amendment 43); the right to develop must not be hindered by the RMI (Judith Sargentini (Greens/EFA), amendment 26). The Commission is asked to present a legislative proposal on the automatic disclosure of trans-national corporations profit and tax payment to fight against abuses of tax havens, tax evasion and illicit capital flights (Judith Sargentini, amendments 31 and 37 and Ricardo Cortés Lastra (S&D), amendment 33).

Finally, Gabriele Zimmer calls in amendment 14 on the Commission to think more about the reuse of resources to sharply reduce the use within the EU and put in place a sustainable economic model to prevent emerging worldwide conflicts.

Fair Politics welcomes the amendments on 'an effective raw materials strategy for Europe' by the ITRE committee and on the opinion by the Development committee. The need of the Raw Material Initiative to comply with Policy Coherence for Development is clearly identified, thus for each amendment written one point is awarded to the MEPs in our monitoring system towards the Fair Politician of the Year, which will be awarded on June 29th at 15:00 in the EP, room A5 G305.

Monitor fair: S&D(14), Greens/EFA(10), ALDE(6), GUE/NGL(4), EPP