Minimize environmental and social harms in resource extraction

Deforestation is one of the most significant harms to the environment that continues to grow.

At the end of 2020, the European Union (EU) adopted a deforestation regulation (EUDR) policy, requiring that seven commodities — cattle, cocoa, coffee, oil palm, rubber, soya and wood — and their derived products in the EU market be “deforestation-free” and implemented the regulation in 2023 To show that products are deforestation-free, operators and traders must submit a due diligence statement to their competent authority, for example. More countries should adopt an effective regulation or policy on products to halt deforestation. Data is unavailable to determine whether other governments have requirements for deforestation-free products.

To prevent loss of fishery resources and produce healthy fish and shellfish, sustainable management in the fishery and aquaculture industry, as well as distribution of these products without mixing with other less sustainable products, is necessary. In this regard, chain-of-custody certificates are important because they help consumers to distinguish good and bad products in the market. This indicator measures the number of sustainable fishery chain-of-custody certificates in the world, including sustainable aquaculture.

The number is increasing, from around 900 in 2009 to approximately 9,000 in 2023. In 2022, 19% of all wild marine catch received sustainable fisheries certificates from the Marine Stewardship Council.

To prevent various harms in the resource extraction phase, appropriate governance is necessary. If resource governance is poor, a country has almost no framework to ensure resource extraction benefits society and extraction activities are highly likely to benefit companies and elites only. An index was developed by the Natural Resource Governance Institute (NRGI) to monitor resource governance for both mining and oil and gas producing countries. This indicator focuses on mining.

Average country scores of the Resource Governance Index of mining countries increased from 48 out of 100 in 2017 (with 34 countries in the sample) to 61 out of 100 in 2021 (with 12 countries in the sample). Given that many countries with data in 2017 lacked data in 2021, it is unknown whether global resource governance for mining is improving or worsening. In addition, even the countries with data available are only evaluated on one mineral (for instance, gold in Colombia and copper in the Democratic Republic of the Congo). Improvements in accountability and data accessibility are crucial to reduce harms in resource extraction.

Damages tend to be hidden and suppressed, especially when affected persons are in a weak position. For example, workers who are in debt or cannot change their job are more vulnerable to exploitation by employers. Workers cannot sue their employers, fearing retaliation, though their damages should be disclosed and addressed. A grievance mechanism is a formal complaint process that can be used by individuals, workers, communities and/or civil society that are being negatively affected by certain business activities and operations. This kind of “access to remedy” is deemed important by the United Nations.

This indicator aims to measure the share of resource extraction companies, as well as companies on subsequent supply chains, that have a grievance mechanism. However, no centralized or publicly available data source has been identified.