Simon Taylor is
Director and Co-Founder of
Simon is a Thought Leader
on Old and New ENERGY
immersed experience of a Do-Tank
April 17 & 18, 2007
Max. 20 Delegates
Club of Amsterdam: Simon,
you are a Director and Co-Founder of Global Witness, an organisation that
exposes the corrupt exploitation of natural resources - amongst them oil
and gas. What are your long-term strategies and how do plan to implement
In 1993 together with two
others, Charmian Gooch and Patrick Alley, I set up Global Witness to expose
the corrupt exploitation of natural resources and international trade
systems, to drive campaigns that end impunity, resource-linked conflict,
and human rights and environmental abuses.
Half of Global Witness’
work involves the compilation of first hand evidence and information about
the situation on the ground in areas of conflict and instability through
conducting investigations, field visits, and standard research. Such information
is then compiled into hard-hitting reports which are subsequently taken
to all key policy makers to ensure change. Half of our work is accurate
information gathering – the other half strategically using such information
to drive positive change.
Right now, the existing modalities
for natural resource extraction do not work. Details of such arrangements
are usually shrouded in secrecy, and the provision of concessions almost
always, certainly in the developing world, involves major corruption.
Usually also in our experience, it is very hard to see the benefits being
accrued to the country and its population – rather, the population
is usually on the receiving end of a litany of abuse, a degradation of
quality of life, and very often conflict. Such conditions tend to prevail
for the masses, whilst a small elite benefit on a vast scale through the
wholesale asset-stripping of state assets and the passing of the proceeds
through the international banking system, with no questions asked.
So, in summary, the existing
international architecture which governs the roles of companies taking
advantage of such conditions requires a major overhaul. Right now, shareholders,
influential mafia-style middlemen, international banks, and elites within
natural resource-exporting countries benefit on a massive scale, at the
direct expense of their populations. You could even say that the populations
of these countries subsidise these “profits” with their livelihoods,
and very often with their lives.
Global Witness has been exposing
key examples of such business practices and the systems by which business
activities operate for over a decade. We have been the key initiator of
a number of international processes, including the Kimberley Process to
combat conflict or blood diamonds, the Extractive Industry Transparency
Initiative (EITI), which came about as a UK Government response to the
launching of the Publish What You Pay Campaign (PWYP), and the FLEG initiatives
to address illegal logging. These processes are far from complete. In
addition, we urgently require additional changes to this international
trade and business architecture, otherwise companies and individuals will
continue conduct business in areas of conflict and instability, without
any accountability over the impact of their actions on local populations.
Global Witness will continue
to expose examples of bad business in any and all sectors which influence
instability and conflict and which destroy serious efforts at development
in such countries. Coming out of this work will be further deliverable
strategies to address these issues.
Club of Amsterdam: "Publish What You Pay" - conceived and
co-launched by Global Witness - is a campaign that aims to help citizens
of resource-rich developing countries hold their governments accountable
for the management of revenues from the oil, gas and mining industries.
Can you describe its impact?
Publish What You Pay (PWYP)
was launched to demand mandatory revenue disclosure from companies in
the oil and gas, and mining sectors. Other sectors may be included later.
This was because many such companies had been, and continue to be, involved
in sleazy deals with producer country elites. These company activities
have included the running of slush funds in tax havens for the purpose
of bribery or delivery of “favours”, outright bribery, the payments
of vast sums into personal accounts and even the payment for and delivery
of weapons into conflict zones via company subsidiaries that do not officially
exist. We have even come across a system where a major prominent international
oil company deliberately rigged the debt of a producer country, such that
it completely controlled the entire economy of the country – of course,
to its favour. Of course, the other half of this coin is the role of elites
in resource exporting countries who, as described above benefit from such
Before launching PWYP in
2002, Global Witness had already been involved in a 2 ½ year discussion
with some of the more enlightened oil and gas companies to create the
conditions for these companies to disclosure their payment data on a voluntary
basis. In early 2001, BP announced that it intended to disclose such data
in Angola – only to be faced with contract termination and being
thrown out of the country. The circumstances around this incident ultimately
demonstrated the limits to which oil companies, even if they wanted to,
could go. Ultimately, going it alone would be disastrous for any company
– not only this, but those companies which were fundamentally part
of the problem had no intention of following such an example, and would
be left to pick up contracts at the expense of the “good” companies.
Such a voluntary process was thus completely inoperable!
The launch of PWYP quite
rapidly created a reaction from the UK Government, which launched the
Extractive Industry Transparency Initiative (EITI), which brings together
producer and consumer governments, a large percentage of the global key
oil, gas and mining companies (there is a need to attract more of them),
and civil society. The initiative is based on the premise that countries
would volunteer to disclose the revenue streams they obtain from the extraction
and export of oil and gas and mining products. Once a country steps up
to the mark, all companies would be then be obliged to disclose the payments
they make for the extraction of the resources in their concessions. This
way, comparison can be made between what companies say they pay, and what
countries say they receive. Any discrepancy could then be independently
assessed, with civil society being intimately involved in the process.
The result would be a level of disclosure of the vast rents which accrue
as a consequence of natural resource extraction (in particular, oil and
gas) which hitherto has not been available. This would create an absolute
minimum, but vitally important, first step towards creating accountable
governance over such revenues in order that they might actually benefit
the citizens of the countries concerned.
There are various areas of
concern with these arrangements thus far. The most important of these
is that it remains very hard to imagine the likes of President dos Santos
of Angola, or President Obiang of Equatorial Guinea (there are many others
who could be added to this list) actually volunteering their countries
to implement EITI. The elites who call the shots in both these countries
are amongst the pre-eminent kleptocrats in the world today, and they have
no interest in being held accountable for the expenditure of their State’s
revenues, which are currently making them very rich. Having said that,
there is some delivery coming from EITI due to the significant implementation
of EITI by Nigeria and Azerbaijan – both places where it would have
been hard to believe this was possible only a short while ago. These are
significant steps forward, but it is important to understand that this
is a work in progress and we need to see where the initiative goes over
the next year to year and half, whilst also continuing with efforts to
deliver mandatory disclosure mechanisms in a variety of jurisdictions.
PWYP is now a coalition of
300+ civil society organizations across all continents of the world. It
is an extremely effective and efficient coalition and is represented on
the International Advisory board of EITI, such that civil society plays
a key role in the evolution and delivery of EITI. The PWYP coalition is
intimately involved in a global push to deliver parallel mandatory solutions
to revenue transparency, premised on the idea that we need to see accountability
over the management of resource revenues by both the elites who control
the expenditure, and the companies who do the paying. The consequence
of this global engagement is that the idea of revenue transparency in
all countries for natural resource extraction has moved from an issue
where we were initially laughed at by company and government officials
as being unrealistic, to a situation today where it is in the mainstream,
and where the key largest oil, gas and mining companies, together with
an array of producer and consumer countries have agreed to the delivery
of revenue transparency. We now need to keep up the pressure and see where
this process goes.
Club of Amsterdam: The way we use energy and we treat the environment
are closely connected. What do you expect from a dialogue between "old
and new energy" and more specifically: What role should nuclear energy
We are rapidly heading to
a global crunch-time regarding the provision and utilisation of energy.
This “crunch” primarily relates to two major global crises,
which if not addressed are likely to precipitate a vast array of additional
crises, seriously threatening any future prosperity, let alone the prospect
of significant development across the world’s least developed countries.
I am referring here to the nexus of the climate and energy provision crises
– each in their own right seemingly vast imponderable problems, but
which when taken together create a problem the scale of which humanity
has not yet experienced.
We are familiar with many
of the serious implications of impending climate change, and so I will
not go into any detail here. However, thus far the political response
to this situation is massively inadequate to the task. We see political
posturing, and at best now at least the clarion call for action on the
basis that this is a serious matter for humanity to address. But then,
almost in the same breath, the “solutions” put forward are so
inadequate that one might be tempted to laugh, if the implications were
not so serious.
Simultaneously, and neatly
compartmentalised into another section of governments’ thinking,
we also hear the call for energy security. Whilst it is of course obvious
from any state’s perspective, to secure stable supplies of essential
energy, it is clear that for the main part such calls relate to securing
ever more supplies of oil and gas – the very things we should be
avoiding if we wish to slow down and ultimately prevent dangerous climate
change. The consequence of this shallow thinking is that the entire global
energy provision system of financial, diplomatic and corporate operations
remains geared to business as usual.
As if this was not bad enough
from a climate change point of view, we are rapidly heading towards (if
we have not got there already!) a peak in global conventional oil production.
Gas is not too far behind. The consequence of global conventional oil
peaking is not that we run out of oil – oil will still be available
for a long time to come. What it does mean once this peak in output is
reached is that global oil production will no longer be able to match
demand. Furthermore, the lines on any graph of production versus demand
are likely to separate very quickly. All this leads ultimately, and within
very few years, into very dangerous territory: At best it will completely
undermine the global governance agenda, leading to the end of such initiatives
as EITI, with companies and governments rushing to the bottom to outbid
one another in a downward spiral of dirty deals. At worst, within very
few years after a peak of oil output, we face the prospect of global powers
– nuclear armed powers - facing off against each other in an increasingly
aggressive posture for essential energy resources.
Following on from the climate
crisis disaster, political thinking around the provision of energy represents
a second massive abrogation of responsibility by our political leadership.
Given the pre-eminent role oil plays right across the global economy,
it is not just the prospect of military confrontation we should be worried
about. Indeed the economic implications could be a disaster on the scale
of 1929 all over again.
There are of course no easy
solutions to this situation. However, what is clearly required is the
kind of global leadership and international cooperation on the scale we
have seldom seen in the past. The output needs to be nothing short of
a global revolution around the way in which we generate and utilize energy
and its subsequent equitable availability. Nothing less will suffice.
Whilst this might sound dismissive, nuclear power would seem to be an
unnecessary distraction which does nothing to address either our overall
energy requirements, or the overall use of carbon intensive energy sources
– and that is before we consider the implications of the complete
lack of adequate waste management, the propensity for increased nuclear
use to create its own security of supply problem, the appalling overall
record of the industry when it comes to onsite safety and maintenance,
and the increased risks of nuclear proliferation and the potential for
In terms of the dialogue,
I would hope we can discuss some of these issues further during the
on Old and New ENERGY.
Thank you Simon!
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