Towards an improved governance agenda for the extractive sector: Report based on RIIA workshop: Sustainable Relationships: Financing and Monitoring Responsibilities, 10–11 October 2002

This report highlights issues discussed in the 2002 RIIA workshop. It demonstrates the challenges faced in the creation and implementation of agreements with stakeholders on economic and environmental areas of sustainable development in the extractive industry. The report highlights key issues discussed relating to maximising economic benefits and minimising negative environmental impacts. Maximising economic benefits:it is in the interest of the extractive companies to raise the standards of the industry’s operationsacting in unison will not only level the playing field it will also enable the extractive industries to deal with the free-rider problem in the long runmore research also needs to be done to define the monitoring role that can be undertaken by the international finance community, such as commercial banksbanks and financial institutions are lagging behind the industries in addressing corporate responsibility issues. It is important that they become more accountable for the destination of their capital and the potential impacts of their investmentsif financial institutions are to act as effective monitors of extractive industry standards then an objective, fact-based, multi-stakeholder governance body could be set up for the financial sector to vet projects and to act as ombudsmanmultinationals should also use their power to hold their banks to higher financing standardsinterim steps could include better ESIA systems, and objective, measurable, usable financing criteria. The OECD governments could introduce transparency as well as social and environmental standards and guidelines to their export credit agencies (ECAs)Minimising negative environmental impacts, some possible next steps include:engage actively in key international conference processes and intergovernmental forabuild trust through relevant and effective partnershipswork towards developing more effective land use planning systemsmake an inventory, codify and disseminate best practice and standardsestablish a credible and independent mechanism that guarantees consistent application of standardscontinue reviewing and improving protected area classification systemsimprove guidance on priority areas