Remarks by UNDP Country Director, Bakhodir Burkhanov, at the Fiji Parliamentarians Professional Development Retreat on the role of Parliament in Extractive Industries

Aug 24, 2016

The Honourable Speaker of Parliament Dr. Jiko Luveni

Honourable Members of Parliament from both sides of the House 

The Parliament Secretariat

Permanent Secretaries

Representatives from ministries, international organisations, academia, civil society groups and private sector 

Distinguished guests:

I would like to express my sincere thanks to the Parliament of the Republic of Fiji and to the Honourable Speaker for enabling this discussion on the role of Parliament in the extractive industries.

At the outset, I would like to say that UNDP has been supporting countries around the world in translating the use of oil, gas and mineral resources into development benefits. These experiences have shown that progress in human development is maximised where effective policies, accountability frameworks and governance systems are in place.

The mining sector contributes significantly to government revenue, GDP and export in resource-rich countries. Despite this opportunity for development, many countries fail to use the extractives for wider economic and social development. On the contrary, the resource wealth often leads to higher poverty rates, environmental degradation and, in some instances, conflict. Indeed, experiences of countries in our region show that the resource blessing can turn into a curse. To avoid these pitfalls and deliver important development dividends for all citizens, effective and transparent governance of the sector is imperative. 

Fiji is endowed with some gold and bauxite deposits, but mostly construction materials such as rock, gravel, sand, clay and limestone. In comparison with large-scale mining of globally traded minerals, the low-value minerals and metals sector (LVMM) has the potential to generate more direct and indirect local benefits such as jobs. The sector has closer links with the local economy as it provides inputs to domestic construction and industries. Demand for these materials has surged in the wake of TC Winston, both nationally and regionally, opening up further opportunities for the ongoing development of this sector as a pillar of Fiji’s sustainable economic growth.

Small-scale mining tends to be more labour-intensive and better integrated into the local economy than large-scale mining, and it holds considerable import substitution potential. However, many operators working in this sector are, in fact, small-sized informal enterprises that employ local, low-skill labour. More effective governance of this segment of the sector is often critical, tackling environmental degradation and water pollution, unsafe working conditions, unlawful exploitation and insufficient compensation.

To date, translating Fiji’s natural resource potential into sustainable development gains has proved challenging. The income generation potential of the sector often remains under-realized. Extraction points for these minerals are sometimes along various rivers and waterways, posing social, environmental and community health issues, especially to those who rely on those rivers for their livelihoods. Beyond that, key challenges persist with regard to market access, environmental and social impacts, and policy and regulation, particularly with regard to licensing, taxation and the broader fiscal framework. These latter points are especially important in view of current exploration of deep sea mining potential.

Parliaments can play an important role in improving governance of the extractive industries sector. Their three core functions – representing citizen interests, legislating, and overseeing the executive branch – are crucial to improving the governance and management of resources.

  • Firstly, through consultations with constituents and communities, parliamentarians are uniquely positioned to identify issues and grievances. They can take pre-emptive or remedial action in concert with other relevant actors.
  • Secondly, parliamentarians are also responsible for ensuring that the government allocates revenue appropriately and with equity, for scrutinising the government's collection and expenditure record, and for implementing legislation and policies benefitting the citizens on the ground.
  • Lastly, through its budget process and powers, Parliament’s control of public expenditures gives it the authority to review, amend and authorise the national budget.  This provides opportunities to push for strategic investments that could further benefit sustainable growth of the sector and socio-economic development of the country as a whole.

The agenda over the next 2½ days looks to provide a wealth of information to assist you as MPs in the exercise of these important duties. You will have the opportunity to hear from experts from the extractive companies, international and regional organizations, academics, civil society organisations and government agencies, who will provide you with an overview of the industry, its governing legal framework, experiences from other countries, and challenges and opportunities faced. We hope that all of the information and views on this topic will allow for increased and informed national debate on extractive industries in Fiji.

In closing, I would like to say that UNDP’s support to the Fiji Parliament would not be possible without the generous support of our partners from the Governments of New Zealand, Australia, Japan and the European Union. The retreat is also funded in part by the ACP-EU Development Minerals Programme, which is a capacity building programme to support the low-value minerals and materials sector in 40 countries in Africa, the Caribbean and the Pacific, with Fiji as one of the key focus countries.

I would like to wish you productive deliberations looking at ways to ensure that natural resources and minerals work for all people and rightfully deliver significant benefits for Fiji’s development.

Vinaka vaka levu, shukriya, thank you.

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