Three ways to advance fair and responsible minerals production

Last week, the United Nations Panel on Critical Energy Transition Minerals published guiding principles and recommendations to ensure fairness across mineral value chains through the energy transition. These principles, shaped through dialogue between governments, industry, civil society and international organisations, aim to protect the legitimate interests of resource-rich countries and their citizens as they seek to benefit from growing global demand for minerals.

UN Secretary-General António Guterres spearheaded the establishment of the panel and highlighted the urgency of its work, amid “signs that the energy transition could reproduce and amplify inequalities of the past – banishing developing countries to the bottom of value chains to watch others grow rich by exploiting their people and putting their environment in jeopardy.” With demand for critical energy transition minerals set to nearly triple by 2030, the renewables revolution must be grounded in justice and equity, protecting people, the environment and driving sustainable development.

The energy transition could reproduce and amplify inequalities of the past.

Swift action is essential to turn these objectives into reality. Through its mission, and in dialogue with international stakeholders at the upcoming New York Climate Week, the EITI will help advance at least three of the seven core principles established by the panel, along with the actionable recommendations stemming from them.  

1. Safeguarding the integrity of the planet, its environment and biodiversity

Transparent and responsible regulation of mineral production is critical to protecting natural ecosystems (Principle 2). The 2023 EITI Standard includes measures to publish environment and social impact assessments; disclose legal frameworks for managing such impacts; and publish policies on artisanal and small-scale mining.

Transparent and responsible regulation of mineral production is critical to protecting natural ecosystems.

Countries implementing the EITI must now disclose their national energy transition commitments, policies and plans relevant to the extractive sector. The EITI is prioritising guidance and capacity building to help countries meet these requirements. Some panel members highlighted the value of the EITI and encouraged governments and companies to consider joining as a demonstration of their commitment to responsible resource governance and the panel’s recommendations.

2. Fostering development through benefit sharing, value addition and economic diversification

The panel recommended establishing a High-Level Expert Advisory Group to accelerate benefit-sharing, value addition and economic diversification within mineral value chains, as well as responsible and fair trade, investment, finance and taxation (Principle 4). This aligns with the EITI’s mission, which focuses on transparency in revenue flows, mineral production and exports, and revenue sharing with producer regions.

The panel emphasised the need for fair taxation and royalties, ensuring that revenues benefit affected communities. The EITI engages with communities to shed light on their share of revenues and the benefits derived from transition mineral projects. Through national and local multi-stakeholder dialogues, communities are not only better informed, but are also supported in their efforts to protect the environment, while ensuring economic benefits are realised. Next week’s roundtable with the Ford Foundation will build on research to identify collaborative solutions to the challenges faced by communities affected by the low-carbon transition.

3. Underpinning fair and responsible production through transparency and action against corruption

Transparency and accountability are essential to achieving the social, economic and environmental goals set out by the guiding principles (Principle 6). The creation of a global framework for traceability, transparency and accountability framework throughout the entire mineral value chain can advance these goals by strengthening due diligence, facilitating corporate accountability and building a global market for critical energy transition minerals.

The principles further recognise the crucial role of multi-stakeholder platforms at national, regional and global levels in scrutinising disclosures, promoting accountability and ensuring information is accessible to all stakeholders, while safeguarding commercially sensitive data.

The principles further recognise the crucial role of multi-stakeholder platforms at national, regional and global levels in scrutinising disclosures, promoting accountability and ensuring information is accessible.

However, making data publicly available is just the first step. Ensuring it is used effectively is just as important. This is where EITI multi-stakeholder groups in 55 implementing countries have a crucial role to play. For example, the use of beneficial ownership data has helped drive accountability in resource extraction. In the Philippines, the EITI multi-stakeholder group reviewed corruption risks in nickel mining to identify practices that undermine the integrity of license allocations. An upcoming session at the New York Climate Week will focus on how existing mechanisms, such as the Open Government Partnership, the Initiative for Responsible Mining Assurance and the EITI, can enhance governance through the energy transition. Further actions are expected to strengthen supply chain transparency, ensuring improvements in citizens’ livelihoods and the protection of their rights.

Moving forward

Agreement on these principles marks a significant step forward. Over the coming months, the UN and organisations that contributed to the panel will take further action to implement these recommendations. The EITI stands ready to support this collective effort, contributing to the global momentum for fair and responsible minerals production.

We are grateful to Sebastian Sahla, EITI Policy Manager, for his contributions to this blog.