Very often, the assumption in policy communities is that regulatory instruments at the global level are advancing efforts to “tackle poverty”, “curb pollution”, “make governance transparent” and solve problems in ways that can “only help.” They might not be effective, everyone knows, but somehow the initiatives are going to only have the possibility of helping – with incremental benefits, no benefits, or maybe even significant benefits.

Yet, these same institutional measures have all kinds of hidden costs, are continuously embedded in capitalist systems that co-opt the instruments in ongoing relations of exploitation, and reflect unequal power relationships.

In our work, we take as our point of departure the premise that, even if institutional “fixes” can at times be useful in leading to well-intended changes, there is also a critical need for radically challenging global governance measures for how they can help to replicate systemic forces of structural violence and widespread socio-economic exploitation.

The possibilities of exacerbated exploitation, we argue, remain still far too under-studied and under-discussed in policy worlds.

Perhaps the most obvious and (in)famous example is that of the Kimberley Process Certification Scheme for diamonds. For years, since the 1990s, there was the belief the diamonds were a “rebel’s best friend” and that global policymakers could come together – with the diamond mining and trading industry, with non-governmental organisations, and with other parts of civil society – to craft a solution to the “conflict diamond” problem.

Surely everyone thought that diamonds should not be used to fund atrocities by rebel groups against states – as in Sierra Leone and Angola. Canadian diplomats and other foreign diplomats of wealthier countries rushed to the chance to boycott diamonds that were from “conflict diamond” producing countries, all the while helping to re-inscribe and save the image of the “good diamonds.”

Canadian diamonds were examples of the presumed good diamonds, even though they were mined on Indigenous land without Indigenous consent, and were embedded in conflicts that involved substantially unjust relocation processes.

Racialised overtones soon plagued the global policy discourse: African diamonds were tarnished in their image, a state-/rebel dichotomy in discourses of capitalist violence were allowed to also prevail, and the “bad” actors were in some cases academically modelled in terms of greed and grievance, and in terms of the propensity to lead to conflict, devoid of a global understanding of the political economies of exploitation at issue.

Then in the mid-2000s, something significant happened that shook the global diamond policy world: the Government of Zimbabwe used the rationale for “abiding” with the Kimberley Process Certification Scheme – which defined diamonds as involving diamonds being used in violence against the interests of the state –  as the very reason for exercising military control measures.

Reports of hundreds of artisanal diamond miners gunned down by military “security” personnel soon emerged. Government officials spoke of the diamonds needing to be controlled, and disorderly diamond rushes by irresponsible actors needing to be policed.

Government officials globally were fragmented – some wanted to boycott Zimbabwe’s diamonds, others did not. After all, how far could the definition of “conflict” be expanded beyond the conventionally narrow definition? Some NGOs took much longer than anticipated to pull their support for the KP, but eventually did, being frustrated that the KP certification stamp was a mere exercise in corporate branding. Others revoked their support earlier.

Our review of international regulatory instruments in the extractive sector has explored a multitude of hidden costs. For diamond certification, hidden costs have related to the re-marginalisation of artisanal miners, sexual violence against women involved in or leaving near the mineral supply chain in some cases, and ongoing re-legitimisation of extractive sector violence at systemic levels.

More widely, other instruments imagined as global governance solutions have also positioned themselves as ‘solutions’ for mining but all the while re-inscribing unequal economic class relations and power relations. Global efforts to tackle mercury pollution – including in the artisanal and small-scale gold mining sector, and global efforts to tackle the lack of “transparency” of mineral supply chains are two other examples.

For whom do such initiatives have the greatest “wins” and “losses”? Intended beneficiaries – those most marginalised – are seldom the people who benefit the most. At times efforts to privilege and enforce a “formalised” mineral economy can only play into the hands of powerful elites who determine who is or is not a holder of a license for land/resource rights.

Imagined solutions to extractive sector injustices are limited by circumscribed regimes of policy “solutions” – and at times “transparency” is a fetish that results on documentation on paper and far too little meaningful change.

Moreover, what is being made “transparent” often supports rather than questions the industries that these schemes report on. For example, the Extractive Industries Transparency Initiative long only focused on financial revenues. While this focus on financial disclosure rightly sought to address corruption, it also emphasized the potential ‘benefits’ of extractive activities at the expense of their numerous environmental and social costs. Transparency in one area thus contributed to obscure others, often of greater importance to affected communities.

To sum-up, our review identified a number of ‘hidden costs’ associated with regulatory instruments, which in this light can be seen as extensions of capitalist violence. These costs have included:

  • The racialization of commodities and commodity production processes;
  • The oversimplification of conflict narratives that veiled important causes, the downplaying of some types of human rights abuses and the justification of brutal and ineffective police and military crackdowns;
  • The collapsing of local livelihoods through de facto embargo, lowered prices, and denial of access to resource areas;
  • An instrumentalization of reforms by private interests and fragmentation of public authority engendering more corruption;
  • The bolstering of ‘reformist’ reputation of authoritarian and corrupt regimes;
  • The legitimation of large-scale activities through the selective visibilization of benefits over the negative environmental and social impacts; and
  • The reshaping and distortion of socio-environmental struggles to support capitalist models and associated interests.

Philippe Le Billon is a Professor in the Department of Geography and the School of Public Policy and Global Affairs at the University of British Columbia.

Sam Spiegel is a Senior Lecturer in the School of Social and Political Science at the University of Edinburgh.

This article is based on Philippe Le Billon and Sam Spiegel, “Cleaning Mineral Supply Chains? Political Economies of Exploitation and Hidden Costs of Technical Fixes.” Review of International Political Economy, published online March 17, 2021, https://doi.org/10.1080/09692290.2021.1899959

Photo: Diamond mine, mining industry, https://pixabay.com/photos/diamond-mine-mining-industry-1999481/