UNITED NATIONS SECURITY COUNCIL

Statement by HE Ms Philippa King, Ambassador and Deputy Permanent Representative of Australia to the United Nations

Thank you Mr President.

I begin by condemning this morning's appalling attack on the UN compound in Mogadishu. We convey our condolences to the families of the victims, and express our solidarity with the UN and the Somali Government and people.

Since the last Council debate on natural resources and conflict in 2007, much work has been done – including by the Council's sanctions committees and their panels and groups of experts – to understand and address the impact of natural resources management in conflict-affected and post-conflict countries. So it is timely that we again examine this link, and look proactively at the Council's role in ensuring natural resources benefit rather than destabilise countries.

Mr President

The continued demand for commodities and energy is driving economic growth, trade, investment and job creation in resource-rich countries. For developing countries in particular, revenues from natural resources can fund infrastructure and boost delivery of essential services. In 2009, Africa's natural resource exports were worth $246 billion – six times more than the total aid directed to Africa that year. Putting in place the proper systems to manage natural resources revenues can deliver benefits well into the long term.

As we all know, however, there is sometimes a correlation between natural resources and conflict. In 2007, the Council recognised part of this equation: the destabilising impact of illegal exploitation and trafficking of natural resources. This can fuel armed conflict, weaken state institutions and set back development. Diamond trafficking allows groups to purchase the weapons that are undermining state authority in the Democratic Republic of the Congo and sustain rebellion in the Central African Republic. And this illegal trade is a gift to transnational criminal networks, which have become increasingly adept at exploiting weak governance across states to expand their activities.

Beyond illegal activity, though, failure to manage natural resources transparently and sustainably can be a factor in exacerbating existing conflicts or provoking new ones. Mismanagement of extractive industries can entrench corruption, undermine governance and state institutions, and exacerbate tensions over revenue distribution, employment opportunities and land rights.

Effective and transparent resources management should be part of the international community's assistance to resource-rich developing countries. Australia's 2011 Mining for Development Initiative was created in response to requests from our partner countries – including in Africa and the Asia-Pacific – to support them to maximise the economic benefits from their extractives sector in a socially and environmentally sustainable way. It is focused on assisting in the development of regulatory frameworks, managing revenue and ensuring direct benefits to communities.

Mr President

The Security Council has an important role in reducing the risk of conflict
and instability where natural resources exploitation and management are a factor.
It recognises the security dimension of natural resources, and has taken targeted
Chapter VII measures to prevent funds derived from the illegal exploitation
of such resources from further fuelling existing conflicts – for example in
Liberia, Somalia and Côte d'Ivoire.

But to be frank, the Council could do better. It needs to broaden and deepen its understanding of this dimension and take a more proactive approach. I will focus on three areas.

First, the Council needs to work more strategically with the regional and global initiatives that have been proven effective in helping countries establish well-regulated and transparent natural resources industries. These initiatives are the Council's natural partners.

The Extractives Industries Transparency Initiative (EITI), which already works in partnership with several Council-mandated missions, is a prime example. The EITI Global Conference, hosted by Australia last month, launched new, stronger EITI standards to increase the consistency and quality of information reported by implementing countries.

Another such initiative with a long-standing relationship with the Council is the Kimberley Process Certification Scheme. The Scheme has successfully curbed the flow of conflict diamonds to rebel groups in a relatively short period of time since 2003.

The Council has also engaged the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. Endorsed by the ICGLR, the Guidance provides strong and practical guidelines for resource extraction companies.

Regional organisations are also taking forward important work. The African Mining Vision, with its framework for 'transparent, equitable and optimal exploitation of natural resources' is a strong example of an African-led and driven initiative. Australia is proud to be supporting the planning and development of the African Minerals Development Centre, under the Mining Vision

The Council should forge coherent partnerships with these initiatives. It should, for example, seek to reference them in relevant products, such as mandates, to ensure UN actors in the field work in tandem with others in assisting national governments build transparent and accountable institutions.

Second, the Council needs to have more confidence in using the sanctions tools already available to it to prevent – or at least limit – the abuse of natural resources to fund conflict. Through the careful design, implementation and monitoring of such measures, the Council has gone some way to minimise the misuse of resources to fund conflict. This experience proves that these measures work to enhance security. The Council should not hesitate to apply these measures where circumstances warrant.

Experts groups mandated by the Council are providing quality analysis, for example, by identifying flows of finances and weapons to those who may be involved in conflict linked to the extraction of natural resources. We should draw on this analysis.

Third, the Council must provide peacekeeping and political missions with the appropriate mandates and tools to assess potential threats associated with natural resources, assist governments to build their capacities to manage their resources sectors effectively, and work with the private sector and civil society to bolster their efforts. Security Council Resolution 2098, which extended the mandate of MONUSCO, provides a strong model. It includes assistance in the establishment of state control over mining activities and equitable management of natural resources extraction and trade. The Council has included similar mandates in the past, including those relating to UNIPSIL in Sierra Leone and UNMIL in Liberia.

There are, of course, other UN actors which play a vital role in assisting countries build strong institutions to regulate and manage their extractive industries, including the Peacebuilding Commission (PBC). We as Council members should welcome the PBC's advice with respect to country-specific situations where natural resources are playing, or have the potential to play, a destabilising role. The irregularities in Liberia's forestry sector and local tensions surrounding its palm oil sector are good examples. The PBC's advice should feed directly into the Council's consideration of mandate renewals where relevant.

The private sector, too, must undertake its business practices in conflict-affected and post-conflict countries in a manner which not only respects fundamental human rights, but also establishes mutually beneficial arrangements with national governments and local communities to promote development and employment opportunities, all of which contribute to conflict prevention. Civil society can contribute to good governance by ensuring citizens have the capacity to hold private sector firms and national governments accountable for their actions, and promoting transparent and sustainable business practices.

Finally, Mr President, I would like to express our disappointment that the Council was unable to agree on a Presidential Statement which could have advanced our consideration of this issue in a meaningful way. Regrettably, there was not sufficient flexibility to achieve a consensus outcome. Moving forward, the Council should continue to focus on the nexus between natural resources and conflict prevention, and we would encourage the UN Secretariat to broaden and deepen its own understanding and analyses of these links so it can inform the Council's deliberations.

Thank you.