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

28-09-2011 Adoption ITRE report on effective raw materials strategy

On September 13th, the ITRE report on an effective raw materials strategy for Europe by rapporteur Reinhard Bütikofer (Greens/EFA) was adopted by the European Parliament. The European industry is facing an increasingly difficult situation with regards to the supply of raw materials (RM), due to a growing global demand for RM and a lack of supplies. The report makes several proposals to increase the effectiveness of the Raw Material Initiative.

Shortly stated, the report suggests a better coordination between and the EU and the Member States with regard to their RM policies, more transparency in trade, more domestic mining in Member States and finally more recycling and less resource consumption.
The report calls on the European Commission to ensure coherence between development policy and the RMI. The EUs RM policy should thereby take full account of the sustainable economic growth in the developing countries and be consistent with the overarching goal of eradicating poverty (as enshrined in Art. 208 of the TFEU). Furthermore the EU should support developing countries to diversify their economies, reduce their dependence on RM exports and increase the value of their products through domestic manufacturing and processing. The report also points out that development policy can play an important supportive role in European RM policy, but that development policy, including the general system of trade preferences (GSP), is not an RM diplomacy tool, and should not be misused for that purpose. It emphasises therefore the need to respect countries resource sovereignty, the importance for free and fair trade to the development of the global RM sector and wealth creation in all societies, and the crucial role that revenue from RM can play in enabling least developed countries to achieve the Millennium Development Goals.

Since the set up of the RMI in 2008, Fair Politics has been keeping a close eye on developments around this strategy in our case study on the Raw Materials Initiative. We welcome the adoption of the report on an effective raw materials strategy for Europe by the ITRE committee. This report clearly shows the need of the RMI to comply with Policy Coherence for Development. Although the report is non-binding, we hope nevertheless that it will contribute to more coherence between development and RM policies.