Bhutan GNH: Part IV - Corporate responsibility and the potential for oil and mineral exploration in Bhutan

Between the 1970s and 1990s, the Geological Survey of India (GSI) did the mineral exploration in Bhutan and covered 33 percent of the country. The GSI found potential for oil in Bhangtar, in Phuentshothang gewog of Samdrupjongkhar, traces of gold, silver and copper in the Black Mountains and tungsten in Sarpang dzongkhag with an estimated value of Nu 50 – 60 billion.

Now there is an American mining company willing to follow up on these finds and to explore the rest of the country with a few strings attached. In 2009, Kuensel reported that US-based Cline mining corporation is trying to gain mineral exploration rights for the entire country. J Matthew Fifield, managing director of the Cline Group, proposed he would get a group of American investors to invest in Bhutan’s mining sector “in a big way.” The Department of Geology and Mines (DGM), and Druk Holding and Investments (DHI) — through which Fifield communicated with the government — expressed interest in the proposal and were studying it, said the newspaper report. If an agreement were reached, the mining company would get exploration rights, and the government would get mining shares and royalties.

According to DGM, nothing has yet been done to implement the 2009 Cline mining corporation proposal, which is still in the conceptual stage. The department reportedly would not consider or act upon any proposal until the draft mineral development policy is finalised.

Druk Holding and Investments, however, is currently encouraging interest in potential mineral exploration and extraction by “seeking partners to invest” in mineral-based industries, among other areas. According to DHI, “With the development of the mineral development policy, there will be opportunities for investments in extraction of minerals and mineral-based businesses.”

Both these statements, and that of DHI in particular, indicate the potential for the proposed policy to open the floodgates to mineral exploration and extraction throughout Bhutan. Certainly DHI is explicit in referencing the new policy as providing “opportunities” for mining activities. While the Cline mining corporation proposal has been stalled since August 2009, approval of the draft mineral development policy may well provide the means through which the Cline “conceptual” proposal becomes reality.

Before dealing with Cline mining corporation or similar mining corporations, the government needs to assess these inevitable aforementioned long term costs that have been associated with mining operations worldwide, and to determine whether such activity is in keeping with GNH values, principles, and practices. Needless to say, in negotiating with any foreign company, RGoB will also certainly want to ensure that the company is indeed responsible, without any past negative social, economic, and environmental record, and therefore likely to operate according to GNH principles and practices in a country with the avowed philosophy and policy of adhering to those values and practices. However, recent news reports out of the U.S. raise a red flag regarding the Cline Group’s past environmental record in its home country. For example, concerns are currently being expressed at public meetings by residents and environmental groups over a highly contentious proposal by the company for an open-pit iron mine, slated to destroy an ancient mountain range in Ashland counties, Wisconsin. Investigation of such past and present activities is clearly essential to establish a clear profile of any foreign company invited to participate in this country’s unique development strategy that can be a model for the world.

A caveat
Impact of the best of intentions, policies and strategies will be less in the existing environment. Unless the prevailing environment of weak enforcement, poor monitoring, poor accountability, lack of professional capability in particular in assessing the total costs of exploitation of natural resources, which, I believe, must be computed to rationally fix rents, fees, royalties and evaluate bid offers and compensation for communities change, creation of new bodies or policies will not bear much value. Public interest that the paper is expected to protect, during implementation will give way to private interest, which generally is the case now. Institutions will be abused to legitimise wrong decisions and to peddle private interests. Community elites and local officials will be mobilised by the influential proponents for their gains.

Choosing a development path for the future
More disturbingly, such immediate concerns about whom we might be inviting in to exploit our land should provide a deeper invitation to the government and the people to assess the real purpose and potential impacts of the proposed mineral development policy. Certainly DHI, at least, appears to see the new policy as opening the door to what could be a sharp increase in mining activity nationwide, and is already “seeking partners to invest” in this activity, among other areas. But who are these potential partners? And would such a move exchange an apparent short-term economic gain for a potentially devastating long-term loss that could carry huge and irreparable costs to our nation’s precious earth and ecology? And does our future lie more with the massive, profit-hungry multi-national corporations that are inevitably associated with large mining operations or with smaller, more self-reliant Bhutanese endeavours with a real commitment to the land and its people (hopefully)?

The National Environment Commission’s answer to those questions is crystal clear, and points to a clear choice between two different visions of our country’s future that deserves to be invoked at this crucial point in history. As stated in Bhutan’s NEC 2008 report:

“The concept of large-scale industrial development is in direct conflict with the country’s policy of environmentally sustainable development especially when bearing in mind the country’s fragile mountain ecosystem and limited usable land…. The potential for future industrial development in the country lies in the development of a network of small-scale and cottage industries based on sustainable management of cultural and natural endowments, especially focusing on niche products such as hand-woven textiles using natural dye and organically produced food and medicinal products.”

The goals and values of GNH are clearly aligned with the above statement of the NEC. But, how effective is NEC with its strong team of well educated and well exposed professionals? We have managed thus far to act as superbly responsible stewards of a land rich in biodiversity and aesthetic beauty—guardians of some of the world’s most precious natural heritage. That remarkable legacy of stewardship was formally acknowledged in 2005, when the United Nations recognised Bhutan as “Champion of the Earth” for placing the environment at the very centre of all its development policies, and thereby setting a vital example to a world with a sad history of destroying its natural assets at incalculable cost to human society and other species.

Only if our deeply-felt ecological “conscience” and commitment to GNH - the extraordinary legacy of its wise and benevolent monarchy, the Fourth Druk Gyalpo, and its profound ancient wisdom tradition - continue to be put into practice in policies today will we continue to protect our own precious heritage. And only then can Bhutan act, in the words of world-renowned ecologist Dr. Vandana Shiva, in a recent visit to Samdrupjongkhar, as “a lighthouse for the way the world should be if the world has to have a future.”

I strongly feel that this is the context within which the proposed draft mineral development policy must be assessed, and within which the deeper question must be asked whether a pro-active mining policy, with all its known ecological and health impacts, is compatible with the country’s deepest held values and principles. The decisions made today will have far reaching implications for us, for its unsurpassed natural assets, and indeed for the world.

By the way, what does NEC have to say on the policy?

As I sat solemnly in the kuenrey of Tashichhodzong on March 18, praying for Japan and our Japanese friends, I hoped for a different world order that is determined by the intrinsic values of interdependence, impermanence and wisdom. Only tough choices and tough decisions will testify our conviction and sincerity in GNH. Was I idealising? Maybe?

Source: Kuenselonline