THE FRAMEWORK FOR EXTRACTIVE INDUSTRIES GOVERNANCE IN ASEAN LAUNCHING JAKARTA, 28 NOVEMBER 2014

BACKGROUND

WHAT IS THIS FRAMEWORK A set of prescriptions to ensure extractive industries resources can be utilized to improve human development, boost equitable economic growth of ASEAN member states, and accelerate connectivity and economic integration in ASEAN. A proposal from civil society of standard-setting for Extractive Industries Governance to be implemented by ASEAN.

THE EXTRACTIVE INDUSTRIES RESOURCES & ASEAN DEVELOPMENT Extractive Industries resources play vital role in ASEAN member states economic development –Source of income/revenues –Source of raw material and supply of energy Potential of minerals sector to be an engine for greater economic growth and social progress in the ASEAN Key component in realizing AEC’s objectives

CHALLENGES AND OPPORTUNITIES SIGNIFICANCE SIZE OF RESOURCES CURRENT GROWTH OF THE SECTOR GROWING ROLE IN THE ECONOMY PROBLEM IN THE VALUE CHAIN WEAK GOVERNANCE ENVIRONMENTAL DESTRUCTION HUMAN RIGHTS VIOLATION CORRUPTION INTRANSPARENT PRACTICES ILLICIT TRADING CO2 EMISSION

z BACKGROUND

WHY THE REGIONAL FRAMEWORK IS NEEDED ?

Development of Extractive Industries in ASEAN requires strong and effective policy and regulatory framework. –Balance of economic, social and environmental benefits (people, planet and profit) –Guarantee transparency and accountability in all stage of the value chain –Effective system to deliver tangible benefits to the citizen –Attracting investment WHY THIS FRAMEWORK

Consider level of extractive industries development in and diversity of ASEAN member states Governance standard for extractive industries to support the realization of AEC

GOAL The development of accountable, transparent and well governed extractive industries that effectively stimulate economic growth at regional, national and sub- national level, environmentally friendly, socially responsible and appreciated by surrounding communities.

OBJECTIVES Provide principles and a platform for harmonization of policies in extractive industries in ASEAN member states. Provide standard-setting instrument for effective management of extractive industries. Ensure harmonization and standardization taking into consideration development stages of extractive industries in member states. Guidelines for development monitoring tools for progress.

THE LEGAL CONSIDERATIONS AND PRINCIPLES

LEGAL CONSIDERATION ASEAN CHARTER ASEAN VISION 2020 ASEAN HUMAN RIGHTS DECLARATION 2004 VIENTIAN E ACTION PROGRAM AEC BLUE PRINT 2005 MINISTERIAL UNDERSTANDING ON COOPERATION IN MINERAL AMCAP MANILA DECLARATION

PRINCIPLES SUSTAINABLE DEVELOPMENT EQUITY BASIC RIGHTS ACCOUNTABILITY AND TRANSPARENCY PRECAUTIONARY APPROACH POLLUTERS PAY PARTICIPATORY DECISION MAKING

THE FRAMEWORK

PROTECTION OF THE ENVIRONMENT Designation of “No-Go-Zone” Environmental and Social Impact Assessment Prevention of hazardous spillage Compliance mechanism and audit Rehabilitation fund Managing environmental impact of small and artisanal mining

RESPECT AND PROTECT HUMAN RIGHT Respect and protect human right in extractive industries activities Respect and protect local community, impacted community and indigenous people Abide international Human Rights mechanism in conflict zone Grievance mechanism Guidelines for relocation and compensation Peaceful cohabitation small and large scale resource extraction rights holders.

TRANSPARENT AND ACCOUNTABLE PRACTICE Penalties for false, incomplete, misleading information to the public Implementation of EITI Combat illicit mineral commodities trading Certification of mineral commodities trade Database on extractive industries resources Openness of data related to revenue flow Transparent decision making process Oversight for artisanal and small scale mining

SOUND FISCAL FRAMEWORK FOR ECONOMY GROWTH Legislation to optimize and protect revenue Channel all revenues to budget system Spending for basic and social infrastructure Investment in resource knowledge infrastructure Development of downstream and upstream value addition Revenue sharing to local community Establishment of natural resource fund Auction and competitive bidding

MEANS OF IMPLEMENTATION

COUNTRY LEVEL PROCESS Establish multi-stakeholders group to carry out the RA/GA, set up focal point Undertake Rapid Assessment/Gap Analysis (RA/GA) Based on RA/GA, draw Action Plan Implement the Action Plan Review the result and report to ASEAN sectoral body

ASEAN LEVEL Sectoral body adopt and promote the Framework Review mineral/energy policies of ASEAN member states Setting/establish peer-review mechanism of RA/GA Setting mechanism to monitor the implementation Provide technical assistances, enhance dialogues with stakeholders, and dialogue partner

ASEAN LEVEL Set initiative, sectoral body adopt and promote the Framework Review mineral/energy policies of ASEAN member states Setting/establish peer-review mechanism of RA/GA Setting mechanism to monitor the implementation Provide technical assistances, enhance dialogues with stakeholders, and dialogue partner

Integrating and reinforcing other initiatives Extractive Industries Transparency Initiative (EITI) Natural Resource Charter Open Government Partnership (OGP) UN Global Compact Open Contracting Partnership Voluntary Principles on Security and Human Rights

This work is made possible through a collaboration of and contribution made by civil society organizations across South East Asia, institutions and individuals, and funding assistance by USAID IKAT-US Project through NRGI (RWI)

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