Scrutinise resource projects: INA

ALL resource projects, whether extractives, or major renewable energy projects, such as hydropower, need to be carefully assessed, says Institute of National Affairs (INA) executive director Paul Barker.
Barker said this was to ensure that they provided a net benefit to the country in terms of revenue, jobs and wider economic benefit, as against the costs associated with extraction and impact upon the natural habitat.
“For some projects the costs, including the risks (including from collapsing tailings dams etc…) are excessive, and the projects should not proceed,” Barker said.
“Others provide net benefits, but still must ensure high standards, minimise negative impacts, and, at least, offset those impacts which are unavoidable, at least with a 10 per cent environmental gain, as is being increasingly applied around the world.
“Other issues with resource as well as agricultural projects, is to mitigate negative economic effects from fluctuating commodity prices upon the overall economy, public revenue and expenditure.
“It also includes stabilisation of future fund arrangements, also to sanitise inflationary and currency impacts which would undermine the competitiveness and viability of the other sectors, both for export-based industries, such as agricultural crops and export crop value adding and for that matter also tourism, as well as import replacement activities, such a fresh produce supply, and various manufacturing.”
Barker said the extractive sector had a long history in the country and had major physical impacts on the landscape.
“Invariably, it also has an impact on local livelihoods from agriculture and the natural environment.
“Substantial jobs are generated, directly or indirectly, although for gas, largely during the relatively brief construction phase.
“The main contribution from the extractive industries is their contribution to public revenue, notably from tax revenue (including from salaries and wages taxes) and therefore the State’s capacity to perform its functions of providing reliable public infrastructure and services, assuming that the state plans, manages and accounts for those funds prudently.
“With extractive industries relatively short-lived, by the nature of their ore base, or pocket of oil or gas, but also in the face of changing global demand, as with hydrocarbons, as they’re phased out in favour of cleaner and more renewable energy sources, it is critical that their positive impacts during their limited lifespan is maximised (and equitably shared between investors and other stakeholders, including the State, landowners, and other mine affected communities).”