INSIGHTS & IDEAS

Human Rights in the MOG Sector in West Africa

October 14, 2014
The absence of an effective human rights framework has been a significant contributing factor to the low levels of sustainable development in several natural resource-rich states. Like weak governance and corruption, a poor human rights record undermines the relationships between governments and their citizens, particularly in contexts where government revenues are generated primarily through resource rents.

A poor human rights record also affects the ability of governments to develop effective private sector partnerships with multinationals or raise project finance through institutions like the World Bank. Many multinationals are wary of entering into partnerships that could expose them to legal and reputational risk or that may, by association, impact their ability to do business in other jurisdictions. As importantly, multinationals will price risk higher in counties with poor human rights records, thus making investment hurdles based on acceptable levels of risk-adjusted returns more difficult to achieve. The net result is likely to be lower levels of inward investment, an/or the development of partnerships with external operators operating according to lower standards.

While this fact is recognized by ECOWAS governments, there remains a clear gap between stated policy and practice. This gap will need to be narrowed if the extractive sector is to be empowered to contribute effectively to sustainable development in ECOWAS.

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