Governing Extractive Industries OUP CORRECTED PROOF – FINAL, 25/5/2018, SPi OUP CORRECTED PROOF – FINAL, 25/5/2018, SPi Governing Extractive Industries Politics, Histories, Ideas Anthony Bebbington, Abdul-Gafaru Abdulai, Denise Humphreys Bebbington, Marja Hinfelaar, and Cynthia A. Sanborn with Jessica Achberger, Celina Grisi Huber, Verónica Hurtado, Tania Ramírez, and Scott D. Odell 1 OUP CORRECTED PROOF – FINAL, 25/5/2018, SPi 3 Great Clarendon Street, Oxford, OX2 6DP, United Kingdom Oxford University Press is a department of the University of Oxford. It furthers the University ’ s objective of excellence in research, scholarship, and education by publishing worldwide. Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries © Anthony Bebbington, Abdul-Gafaru Abdulai, Denise Humphreys Bebbington, Marja Hinfelaar, and Cynthia A. Sanborn 2018 The moral rights of the authors have been asserted First Edition published in 2018 Impression: 1 Some rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, for commercial purposes, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by licence or under terms agreed with the appropriate reprographics rights organization. This is an open access publication, available online and distributed under the terms of a Creative Commons Attribution – Non Commercial – No Derivatives 4.0 International licence (CC BY-NC-ND 4.0), a copy of which is available at http://creativecommons.org/licenses/by-nc-nd/4.0/. Enquiries concerning reproduction outside the scope of this licence should be sent to the Rights Department, Oxford University Press, at the address above Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016, United States of America British Library Cataloguing in Publication Data Data available Library of Congress Control Number: 2018937073 ISBN 978 – 0 – 19 – 882093 – 2 Printed and bound by CPI Group (UK) Ltd, Croydon, CR0 4YY Links to third party websites are provided by Oxford in good faith and for information only. Oxford disclaims any responsibility for the materials contained in any third party website referenced in this work. OUP CORRECTED PROOF – FINAL, 25/5/2018, SPi UK Aid Acknowledgement This book is an output from a project funded by UK Aid from the UK government for the bene fi t of developing countries. However, the views expressed and information contained therein are not necessarily those of, or endorsed by, the UK Government, which can accept no responsibility for such views or information, or for any reliance placed on them. OUP CORRECTED PROOF – FINAL, 25/5/2018, SPi OUP CORRECTED PROOF – FINAL, 25/5/2018, SPi Preface and Acknowledgements This book has been several years in the making. Ideas for the research project on which it is based slowly began cooking in 2012 as part of wider discussions within the Effective States and Inclusive Development (ESID) Research Centre, an international collaboration of research centres coordinated by the Global Development Institute at the University of Manchester. ESID ’ s unifying ques- tion is: ‘ What kinds of politics can help to secure inclusive development, and how can these be promoted? ’ Our research project asked how one might understand the interactions between political settlements, extractive industry governance, and patterns of inclusion over the long haul. We had each worked on extractive industries for a number of years, and for each of us it was more than obvious that politics is central to how the sector is governed. However, the challenge of fi nding a formal language for talking about this political dimension, and of doing so in a way that would allow for systematic comparison and synthesis across different country contexts, piqued our interest. And so began the initiative that has culminated in this manuscript. In keeping with the general orientation of the broader ESID programme, we worked from literature on political settlements. This generated its own challenges — sometimes it seemed to help our analyses, while at other times it felt as if the language got in the way. We debated the usefulness or not of the concept, and in the end made our own settlement with political settlements. In part, this was because of the challenge at hand. It is completely reasonable to have to talk about 125 years of a country ’ s political and natural resource governance history in forty pages: in political debate and general conversa- tion, citizens are frequently in the business of making such concise interpret- ations of history and then mobilizing them as part of a broader debate. Yet, the actual challenge of writing these forty-page interpretations was brutal: on the one hand, it felt we were leaving so much out, while on the other, details were always getting in the way of the fl ow of our arguments. After very many iterations and discussions of the four country cases that constitute the basis of this book, we cycled back to the view that the political settlements framework became the most productive and integrative way to talk about these long-term dynamics in ways that allow comparisons over time and across space. We also concluded that the language of political settlements was especially useful OUP CORRECTED PROOF – FINAL, 25/5/2018, SPi because it allowed us to discuss through one framework quite different forms of resource extraction: large-scale mining, large-scale hydrocarbons, artisanal and small-scale mining (ASM), and mining cooperatives. This is important because in the literature, these different forms of extraction are most often discussed separately, notwithstanding the clear political, economic, and geographical relationships that exist among them. As we have proceeded along this analytical and theoretical road trip (com- plete with fl at tyres, breakdowns, and speeding tickets), we have received sterling intellectual guidance from Sam Hickey at Manchester. Sam has offered comment and criticism with great generosity, and has also been our project ’ s most loyal supporter and cheerleader, especially when we felt we were treading water. Also in the core ESID team, the comments and thinking of Pablo Yanguas, Kunal Sen, and Matthias vom Hau have been very helpful. This project was linked to two others — one investigating corporate social responsibility (CSR) in mining, led by Tomas Frederiksen; the other addressing the relationships between natural resource taxation and redistributive social policy, led by Paul Mosley. Tomas and Paul were part of many of our team debates and we owe them an intellectual debt of gratitude also. In Peru, Tania Ramírez and Verón- ica Hurtado made considerable and important contributions to the research and writing, Alvaro Cano ’ s work on the evolution of public policies towards ASM was fundamental to our understanding thereof, Alejandra Villanueva ’ s research provided new insights into the mining sector, and Alvaro Paredes provided research assistance. For research on Bolivia, Celina Grisi Huber played a vital role in fi eld research, Laura Riddering and Scott Odell each supported with invaluable assistance. In Zambia, Jessica Achberger and Justine Sichone each helped greatly in the preparation of research materials. At Manchester and at our respective home institutions, many people have assisted with the management of this project. They have facilitated our meet- ings, organized workshops, handled budgets, and done all the other adminis- trative work without which research — especially international collaborative and comparative research — would not be possible. In particular, we are grate- ful to Kat Bethell, Julia Brunt, Clare Degenhardt, Pamela Dunkle, Sophie King, Susan Puryear, Julie Rafferty, Zuleyka Ramos, Ingrid Vega, and Anna Webster. We are especially grateful to Scott Odell of Clark University, who did a remarkable job editing the chapters, teasing out their messages, clarifying and correcting syntax and grammar, and preparing the manuscript for Oxford University Press (OUP). At Melbourne, Chandra Jayasuriya was an enormous help in preparing all the maps for this book. At OUP, we thank Adam Swallow for his guidance and support of the project, and Catherine Owen and Katie Bishop for guiding it through contracting and production. Many people have commented on this work as it has progressed, and their observations and criticisms have improved our arguments in many ways. OUP CORRECTED PROOF – FINAL, 25/5/2018, SPi Preface and Acknowledgements viii In particular, we are grateful to Martin Abregú, Javier Arellano-Yanguas, Kojo Asante, José Alejandro Peres Cajías, Alvaro Cano, John Crabtree, Gerardo Damonte, Eduardo Dargent, Sam Hickey, David Hulme, David Kaimowitz, Terry Karl, Carlos Monge, Alvaro Paredes, Maritza Paredes, Martin Scurrah, and Alejandra Villanueva. We are also grateful for the various anonymous reviews that we received on the book proposal and the different chapters of the manuscript. Our arguments and interpretations have also been presented in workshops, discussion fora, and panels at the Latin American Studies Association annual meetings in New York (2016) and Lima (2017); the Uni- versidad del Pací fi co in Lima; the ESID Research Dissemination workshop at the Ghana Centre for Democratic Development, Accra; the Southern African Institute for Policy Analysis and Research, Lusaka; the Centre for Regional Studies and Development of Tarija, Tarija; and the Bolivian Centre for Docu- mentation and Information, Cochabamba. We thank participants at all these events for their feedback. The project has received fi nancial support from the ESID Research Centre, as well as many fi nancial subsidies from our host institutions: Clark University, University of Melbourne, Universidad del Pací fi co, the Southern African Insti- tute for Policy and Research, and the University of Ghana Business School. Tony Bebbington also acknowledges with much gratitude the support of a John Simon Guggenheim Memorial Foundation Fellowship and an Australian Research Council funded Australian Laureate Fellowship. Anthony Bebbington, Abdul-Gafaru Abdulai, Denise Humphreys Bebbington, Marja Hinfelaar and Cynthia Sanborn Melbourne, Accra, Worcester, Lusaka, Lima October 2017 OUP CORRECTED PROOF – FINAL, 25/5/2018, SPi Preface and Acknowledgements ix OUP CORRECTED PROOF – FINAL, 25/5/2018, SPi Table of Contents List of Figures xiii List of Maps xv List of Tables xvii List of Abbreviations xix 1. Resource Extraction and Inclusive Development: Extending the Bases of the Political Settlements Approach 1 2. Mining, Political Settlements, and Inclusive Development in Peru 23 3. Political Settlements, Natural Resource Extraction, and Inclusion in Bolivia 72 4. The Politics of Natural Resource Extraction in Zambia 116 5. Competitive Clientelism and the Political Economy of Mining in Ghana 152 6. Conclusions: Interpreting the Politics of Natural Resource Extraction 197 References 227 Index 253 OUP CORRECTED PROOF – FINAL, 25/5/2018, SPi OUP CORRECTED PROOF – FINAL, 25/5/2018, SPi List of Figures 2.1. Mining share of GDP, Peru, 1890 – 2012 (millions of nuevos soles 2007, in logarithms) 38 2.2. GDP and mining GDP variation, Peru, 2001 – 15 39 2.3. Mineral exports in value (US$ million) and share of total exports, Peru, 2001 – 15 39 2.4. Total tax revenues and share from mining (millions of nuevos soles), Peru, 2000 – 16 40 2.5. Evolution of mining rights and share of national territory, Peru, 1991 – 2016 46 2.6. Total transfers to regions, Peru, 2006 – 15 (mining canon, royalties, and concessions payments, millions of nuevos soles) 53 2.7. Total transfers to regions by region, Peru, 2006 – 15 (mining canon, royalties, and concessions payments, nuevos soles) 53 2.8. Total social and socio-environmental con fl icts reported by the Ombudsman, Peru, 2005 – 16 56 4.1. Annual GDP growth and copper price trend, Zambia, 1960 – 2016 135 4.2. Private ownership patterns in Zambian copper mines, 1920s to the present. 145 5.1. Key mineral production trends, 1980 – 2008 167 5.2. World gold price (US$/troy ounce), 1968 – 2016. Price based on 99.5% fi ne, afternoon fi xing, London 171 5.3. Budgetary allocations (GH ₵ millions) to LEAP, 2010 – 16 175 5.4. Poverty and inequality trends, Ghana, 1991 – 2013 175 5.5. Distribution of mining revenues in Ghana 183 5.6. ASM contribution to total gold production (%), Ghana, 2005 – 14 189 OUP CORRECTED PROOF – FINAL, 25/5/2018, SPi OUP CORRECTED PROOF – FINAL, 25/5/2018, SPi List of Maps 2.1. The national distribution of mineral deposits and potential mining districts identi fi ed by the Ministry of Energy and Mines, Peru (1967) 43 2.2. The national distribution of different types of mining licence, Peru, January 2017 49 2.3. Areas with presence of illegal and informal mining, as identi fi ed by the Ministry of Environment, Peru, 2015 51 3.1. Mining areas, Bolivia 75 3.2. Hydrocarbon areas, Bolivia 77 4.1. Mining provinces and key mine sites, Zambia 122 4.2. National distribution of mining licenses in Zambia in 2017, showing particular concentrations in North-Western and Copperbelt Provinces 147 5.1. Geographical distribution of mining licences in Ghana, 2014 168 OUP CORRECTED PROOF – FINAL, 25/5/2018, SPi OUP CORRECTED PROOF – FINAL, 25/5/2018, SPi List of Tables 3.1. Periodization of political settlements in Bolivia: 1899 – 2016 84 4.1. Zambian political settlements, 1896 – present 125 4.2. Political settlements in relation to the extractive industry, Zambia 132 4.3. Indicators of inequality, poverty, and extractive industries in Zambia 150 5.1. Periodization of Ghana ’ s national political settlements dynamics, colonial period to date 155 5.2. Periodization of political settlements in mining, Ghana 161 5.3. Gold production and government revenue from mining (GH ₵ , 2005 – 15) 173 5.4. Poverty trends in Ghana ’ s poorer northern regions and the country as a whole, 2005 – 13 174 OUP CORRECTED PROOF – FINAL, 25/5/2018, SPi OUP CORRECTED PROOF – FINAL, 25/5/2018, SPi List of Abbreviations AAC Anglo-American Company ADEX National Exporters ’ Association ( Asociación de Exportadores, Peru) ADN Nationalist Democratic Action ( Acción Democrática Nacionalista , Bolivia) ANC African National Congress ANMM National Association of Medium-Scale Miners ( Asociación Nacional de Mineros Medianos , Bolivia) AP Popular Action ( Acción Popular , Peru) APRA American Popular Revolutionary Alliance ( Alianza Popular Revolu- cionaria Americana , Peru) ARPS Aborigines Rights Protection Society (Ghana) ASM artisanal and small-scale mining AU African Union BCRP Central Reserve Bank of Peru ( Banco Central de Reserva del Perú ) BHP Broken Hill Proprietary BSAC British South Africa Company CAF Central African Federation CEDIB Bolivian Centre for Documentation and Information ( Centro de Documentación e Información Bolivia ) CEO chief executive of fi cer CIPEC Intergovernmental Council of Copper Exporting Countries CIUP Research Center of the University of the Paci fi c ( Centro de Investi- gación de la Universidad del Pací fi co , Peru) CNTCB National Confederation of Peasant Workers of Bolivia ( Confedera- ción Nacional de Trabajadores Campesinos de Bolivia ) COB Confederation of Bolivian Workers ( Central Obrera Boliviana ) CODEPANAL Committee for the Defence of National Patrimony ( Comité de Defensa del Patrimonio Nacional , Bolivia) COMIBOL Bolivian Mining Corporation ( Corporación Minera de Bolivia ) COMSUR Mining Company of the South ( Compañía Minera del Sur ) OUP CORRECTED PROOF – FINAL, 25/5/2018, SPi