Extractive Industries - Blessing or Curse?

Exposing the negative impacts of the Extractive Industry in relation to poverty and the environment

Many developing countries have large reserves of natural resources, such as oil, gas, coal, gold, copper and other mining products. This should contribute to the capacity of these countries to develop their economies: earn foreign exchange with the export of products from the extractive industry; create jobs through the exploration and trade of natural resources; invest these earnings in other sectors of the economy and thus stimulate other development opportunities.

Reality however reveals a very different picture. Decades of irresponsible oil, mining and gas exploration have produced devastating effects in many developing countries.

Gas flares in Nigeria, Indonesia, Kazakhstan and in many other places burn constantly, emitting thousands of tons of toxic emissions. This results in high levels of atmospheric pollution and damaged crops, as well as respiratory, skin, genetic and other serious ailments. 

Oil and gas pipeline construction in Azerbaijan, Cameroon, Chad, Georgia, Russia and Turkey damage the environment and exhaust scarce resources such as land, fishing grounds or forests that are critical for livelihood of local populations.  

Pipeline construction in the developing countries contributes to the increase of infectious diseases including HIV/AIDS and other social problems such as prostitution and human trafficking.

Oil refineries and oil depots in South Africa, Indonesia and the United States do not live up to environmental, health and safety standards.

Drilling (on- and offshore), platforms and artificial islands in the Niger River Delta, the Amazon River, Congo's rain forests, the Caspian Sea and the North Sea have damaging impacts on biodiversity. For example, the undersea pipeline from Sakhalin Island to its offshore terminal is endangering the world's last 100 or so western pacific grey whales.

Thousands of hectares of Canadian boreal forest are being cut down to allow for oil sands exploration in Alberta. The process of oil refining from oil sands produces almost 3 times more greenhouse gases (GHG) than conventional oil pumping.

Nonetheless, the International Financial Institutions continue to co-finance investments of the major oil firms in these countries. These subsidies call for strict environmental standards and are aimed at poverty reduction and development. Are the oil companies fulfilling these requirements?

The oil companies must also comply with international and local laws and standards, as well as their own codes of conduct. Are they?

Toxic waste, oil spills, leaking pipelines, water pollution and depletion, land contamination, permafrost damage, wildlife disturbance, deforestation, infectious diseases, damaged crops and farmlands, human rights abuses. These are just a few of many impacts of the extractive industry on the environment, poverty reduction and development. Is it then an Extractive or Destructive Industry?

Read more on the awareness raising campaign on the impacts of the extractive industry on development, poverty and the environment

 

PUBLICATIONS

Extractive Industries: Fact Sheets

Climate Impacts EN, FR, SK, RU, PL, LT, LV, ET
Financing EN, FR, SK, RU, PL, LT, LV, ET, CS
Gender Issues EN, FR, SK, RU PL, LT, LV, ET, CS
Mining EN, FR, SK, RU, PL, LT, LV, ET, CS
Oil and Gas EN, FR, SK, RU, PL, LT, LV, ET, CS
Social Impacts EN, FR, SK, RU, PL, LT, LV, ET, CS

Kashagan oil field development
Toxic chemicals linked to development of the Kashagan oil field in Kazakhstan are polluting the Caspian Sea environment and damaging the health and livelihoods of local communities (5 December 2007) Read more

Hellfire Economics
Multinational companies and the contract dispute over Kashagan, the world's largest undeveloped oilfield (December 2007). Read more