Advancing Together With Barrick Gold

Mining Robert Fowler on Africa, aid and modern mining

Robert Fowler is one of Canada’s most distinguished diplomats and a member of Barrick’s Corporate Social Responsibility (CSR) Advisory Board. During his 38-year career, he served as Foreign Policy Advisor to Canadian Prime Ministers Pierre Trudeau, John Turner and Brian Mulroney. He was Canada’s longest-serving Ambassador to the United Nations, Deputy Minister of National Defence, Ambassador to Italy and the Personal Representative for Africa of Canadian Prime Ministers Jean Chrétien, Paul Martin and Stephen Harper.

In 2011, Fowler wrote A Season in Hell, in which he recounts his and his colleague, Louis Guay’s, kidnapping by Al Qaeda and their 130 days of captivity in the Sahara Desert. Fowler spoke to Beyond Borders about Africa, the importance of foreign direct investment, aid, and the rise of resource nationalism.

 

Q: What motivated you to accept a position on Barrick’s CSR Advisory Board?

A: Well, I’ve been an Africanist since I was 19, when I first went off to Central Africa to teach. From that moment, I believed that what Africa needed in addition to good will and aid — and what Africans still need desperately — was investment. I was very proud to be a Canadian and a citizen of a country that invested widely in Africa, particularly, but not exclusively, in the extractive industries, the same kind of foreign investment which made our country what it is today. Therefore I’m a big cheerleader, if you will, for Canada being a responsible miner throughout the world. So, when the world’s leading gold producer asked me if I could help them be a responsible miner, I thought that was a wonderful invitation.

 

Q: Many mining companies, including Barrick, are scaling back spending to offset higher costs. At the same time, resource nationalism is increasing, with many governments demanding a greater share of mining revenue. Host communities expect more benefits from mining, while civil society expects these benefits to be spread widely to help alleviate poverty. How can mining companies deal with this more complex, expanded role?

A: First of all, I agree very much that all of the issues you mentioned are becoming much more acute, and have become so over a relatively short time span. And it’s not only the bottom lines of mining companies that are receiving more attention, it’s also those of host governments and of aid agencies. Aid flows — ODA (official development assistance) — from governments to impoverished parts of the world are being reduced. ODA dropped three percent last year, and it may drop further this year. So, yes, particularly since the financial crunch of 2008, things have gotten a lot tougher across the board and everybody is being squeezed. Also, everybody is being held to a higher standard of accountability, and I’m afraid that’s just the way it is. It’s not going to change in the foreseeable future, but it does mean that it’s incumbent upon companies to be more effective in both what they do in CSR terms, and also what they do in communications terms.

 

Q: On the theme of ODA, the Canadian International Development Agency (CIDA) is now partnering with the extractive sector and NGOs. This shift, which is part of an effort to achieve more sustainable outcomes from aid projects, has been the subject of some debate. What is your view?

A: In my view, there’s absolutely nothing to be ashamed of regarding such arrangements. Most other development agencies in the world understand full well the importance of the connection between what they do and what the commercial sectors of their countries do, and they are not ashamed at all to be working in concert with their industries seeking to develop and sustain markets throughout the world. That said, the development vocation is rather particular. It has specific and laudable objectives, and CIDA must be true to those objectives. Critics of CIDA, and some of the criticism is internal, believe the partnership with the extractive industry is taking CIDA down a road that is corrupting its essential purpose. I don’t agree with that interpretation for one moment, and I think we simply have to show the nay-sayers that it simply ain’t so. In other words, we have to show them that this tripartite arrangement among companies, NGOs and government can work. And until we show them, the jury will still be out.

 

Q: Some of the world’s largest gold mines are located in developing regions fraught with complex social, political and economic challenges. What can the extractive industry do to manage these risks more effectively so that we are upholding high standards in these regions?

A: Do I have the perfect silver bullet to answer such a complex question in the next 30 seconds? Absolutely not. Barrick is a gold mining company. And, for most people, gold is the quintessential symbol of wealth, and you are extracting that symbol of wealth from some of the poorest places in the world. The mine invasions in Papua New Guinea and at North Mara, to me, are not surprising. These are desperately poor people who have no other access to any kind of wealth, and they hope to catch what they can any way they can in these environments. Obviously, such situations have to be managed intelligently and sensitively in a very hands-on, and, yes, transparent fashion. It is vital to maintain effective and sensitive on-the-ground community relations, with a lot of people working for Barrick’s outreach projects being very visible to the local community at all times.

 

Q: On the subject of human rights, how much influence do you think companies like Barrick can have in terms of strengthening human rights and encouraging governments to strengthen human rights oversight in their countries? Are we influential?

A: Locally, yes. Beyond that, not enormously.

 

Q: By locally, what do you mean?

A: Mostly, I mean within the region in which the mine is operating, and the region can be fairly widely defined. If you’re looking at Tanzania, the region would encompass all four of African Barrick Gold’s mines. But if you’re asking me, do I think what Barrick and other mining operations are doing can fundamentally change a nation’s human rights posture, the answer would be maybe, very, very slowly. But I really don’t see the role of a mining company to be the principal vector in which countries change their attitude towards their citizens.

That said, getting it wrong can cause a much larger reaction than getting it right, if that makes sense. So, companies like Barrick don’t have an option about whether to be smart about human rights or not. If they are to survive in the environments that we’ve just been talking about, they have to be good at this, and the ones that aren’t good at this will fall away.

 

Q: Some pundits say Africa could be the next great global economic growth story. At the same time, the continent still faces huge challenges that you no doubt could write a book about. Could you talk about some of those challenges?

A: Sure. As you say, that is not a small question. Yes, Africa’s growth is a little bit higher than growth in the industrial economies, but the dream of six percent (annual GDP growth) has been significantly cut back of late. And, by the way, it’s not six percent of much. I am not an Afro-pessimist, I am an Afrorealist, and I do not see in the short or medium term some huge African take-off.

Africa is a billion people and 54 very different countries. There is no area of the world as diverse. There are 500 languages and every kind of climatic condition, and there are governments which are among the worst and some governments that are much better than that.

Poverty is the overarching reality in Africa. People tend to lose sight of that because, in most other parts of the world, the gap between the rich countries and the poor countries is narrowing. Africa is the only area where it is widening. Thirty years ago, Africa represented four percent of world trade. Today it’s 1.5 percent. Many parts of Africa are still beset by population rates or growth numbers that are staggering. There are hugely unrealistic expectations of what aid donors can do and what companies investing in Africa can achieve. Neither can fix Africa.

The relative position of ODA has been eclipsed by other financial flows that have become much more important to the well-being of the Third World, and very particularly of Africa.

 

Q: Do you mean the relative position of ODA globally or in Canada?

A: Globally. Last year, the total ODA flows to the Third World were about $135 billion. However, $213 billion flowed from the wealthy world to the developing world in private debt and portfolio equity. A whopping $332 billion was sent from the rich world to the poorer world in remittances. Most germane to our discussion, $514 billion, three times the amount of ODA, went in foreign direct investment. So the part played by governments in the development equation has been significantly and progressively diminished, and will be further diminished in the future.

I think these trends are not a one-off thing. They’re the shape of the future. Foreign direct investment will be much more important to Africa’s development than ODA flows, and remittances will continue to be vitally important.

 

Q: But ODA is still necessary isn’t it?

A: I’m a big aid fan and, indeed, I find Canada’s aid performance pitiful. I mean, we are in the bottom 25 percent of ODA donors in terms of generosity — that is, in terms of GDP per capita. We’re heading away from the 0.7 percent target, a standard set by [former Canadian Prime Minister Lester B.] Pearson and rocketing southwards to 0.25 percent. It is true, of course, that no Canadian government ever exceeded a 0.54 percent ODA performance.

 

Q: Could you elaborate on the private sector’s role in alleviating poverty in Africa?

A: By definition, the most important thing you do is create jobs, and through those jobs you create revenues, and revenues are what African governments desperately need to operate. And those are things that ODA does not do. I’m a big believer in aid and there are vitally important things it can and must do, but what it isn’t going to do is impact the GNP [of a developing nation], but that direct foreign investment can achieve. There are significant risks, and we talked a moment ago about the heightened risk environment, so it is vitally important that extractive industries operate with ever greater sensitivity and transparency.

 

Q: Have you been back to Africa since you were released by AQIM [Al Qaeda in the Maghreb]?

A: I have. It’s a bit funny. When I got out I told my wife and my daughters they had a veto on my travels. So when I was invited to go to Senegal about nine months after I got out, I polled my daughters, and with some reluctance, was given my exit visa on the condition that I take a babysitter with me, my wife. So I went back to Senegal for a meeting dealing with, frankly, the fact that AQIM and terrorism are a growing reality in that part of the world. And then last spring I was in Angola. They invited me back to join them in celebrating 10 years of peace after their 27-year-long horror of a civil war.

 

Q: As an international figure, your experience touched so many lives. So many people were mindful of what you were going through and deeply concerned — people you don’t even know.

A: I agree, and I’ve met many of them on the street, and it’s always touching and always surprising. The kindness that people showed my family during our enforced absence was mindboggling, really. People did the most amazing things, truly wonderful.