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Between paradox and panacea: legalizing exploitation of natural resources by armed groups in the fight against conflict resources

June 18, 2019

Daniëlla Dam-de Jong is an Associate professor of public international law at the Grotius Centre for International Legal Studies of Leiden University. The current contribution builds on earlier work.

Tin ore from mine held by armed group and tin ore from non-conflict mine © Sasha Lezhnev

Natural resources have financed numerous armed conflicts in the past decades. In response, several initiatives have been developed to stop the trade in these so-called ‘conflict resources’, focusing predominantly on one particular actor: armed groups. As these initiatives are tailored to respond to particular threats to international peace and security, the question of the (il)legality under international law of natural resource exploitation by armed groups remains unanswered. This contribution inquires whether there are circumstances in which international law provides a right for armed groups to exploit natural resources. It concludes that current international law does not provide an explicit legal basis for such a right.  Nevertheless, a case can be made for assuming the existence of a right for armed groups to exploit natural resources when two cumulative conditions are met: the group exercises effective control over territory and exploitation must be strictly for humanitarian purposes. The contribution proposes to apply the principle of usufruct from occupation law to these situations, as it strikes a balance between the rights of the sovereign State and the responsibilities of the de facto authorities in the areas under their control.      

On 27 March 2019, ILC Special Rapporteur Marja Lehto released her second report on Protection of the Environment in Relation to Armed Conflict. The report concludes the impressive study conducted by ILC Special Rapporteurs Marie Jacobsson and Marja Lehto on this topic, and it is the first to explicitly address the question of illegal exploitation of natural resources. This is an important question, as more than 40% of armed conflicts in the past sixty years have been connected to natural resources (see here, p. 8). Natural resources have contributed to the outbreak of armed conflicts, have undermined efforts to conclude a lasting peace and have played an important role in the financing of armed conflicts. In Africa alone, seventy-five per cent of civil wars since the 1990s ‘have been partially funded by revenues from natural resources’ (see here, p. 2). There are abundant examples to illustrate the magnitude of the problem, ranging from past armed conflicts in Angola, Côte d’Ivoire and Sierra Leone (financed by diamonds) to current armed conflicts in Syria and Libya (financed by oil), the DR Congo (financed by tin, tantalum, tungsten, gold and wildlife), the Central African Republic (financed by diamonds and wildlife) and Colombia (financed by coca and gold). The conclusion of peace furthermore does not automatically signal an end to the illegal exploitation of natural resources, which is increasingly entrenched in a parallel economy that is largely governed by transnational organized crime. An investigation led by UNEP, MONUSCO and OSESG in the DR Congo, for instance, concluded that around 98% of net profits from illegal natural resource exploitation in the DR Congo goes to transnational organized criminal networks, while armed groups retain only 2% of these profits.

While these examples show that there is a clear need to develop and implement mechanisms to break the link between natural resources and the financing or fueling of armed conflict and crime, this does not necessarily imply that all natural resources exploitation by armed groups should be prohibited by international law. It is imperative to distinguish between ‘conflict resources’ on the one hand and ‘illegal exploitation’ on the other. The notion of conflict resources refers to natural resources whose systematic exploitation and trade finance or fuel armed conflicts (see here, p26-7). In practice, it refers to instances in which natural resource exploitation contributes to maintaining or exacerbating a threat to the peace, as identified in relevant resolutions of the UN Security Council. Several mechanisms have been developed over the past decades precisely with the aim to address this problem. The most important initiatives include UN Security Council sanctions regimes, the Kimberley Process for the Certification of Rough Diamonds (KPCS) and the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas Current initiatives (OECD due diligence guidance). The most commonly used methods include certification (KPCS and the ICGLR regional certification mechanism), corporate due diligence (OECD due diligence guidance) as well as commodity and financial sanctions (UN Security Council). In contrast, whether exploitation is ‘legal’ or ‘illegal’ is a question that is regulated by the legal framework for the governance of natural resources within States. The question that is central to this contribution is therefore whether international law recognizes circumstances in which armed groups could legally exploit natural resources. This question can be situated in the broader debate on the position of armed groups in the international legal framework. There is a normative pull on armed groups exercising effective control over territory to respect and protect human rights (see eg. here) and to conserve the environment (see here). Recognizing a carefully defined right for armed groups to exploit natural resources would be instrumental in advancing these objectives. First, it would enable armed groups to obtain funding to meet the needs of the population in regions under their control. Second, it would provide an incentive for them to observe practices that promote sustainable use of natural resources.

This contribution explores potential legal bases for a right for armed groups to exploit natural resources, starting with international humanitarian law as the lex specialis for situations of armed conflict. This body of law does not contain specific rules regulating the exploitation of natural resources. The reason for this is evident, as IHL is designed to regulate the waging of an armed conflict and not to address conflict-sustaining activities, such as natural resources exploitation. However, there are rules that indirectly apply to the exploitation of natural resources. The most relevant provision is the prohibition against pillage (Article 4(2)(g) of Additional Protocol II), which has been advanced as the most promising avenue to hold actors accountable for the exploitation of and trade in conflict resources. In its judgment regarding Armed Activities on the Territory of the DR Congo, the International Court of Justice explicitly held that this prohibition applies to the exploitation and looting of natural resources by parties to an armed conflict. However, even though Additional Protocol II does not define ‘pillage’, it is generally understood to refer to acts of theft, or, in other words, taking someone else’s property without his or her consent. This is also how international criminal tribunals, including the Nuremberg tribunal, the ICTY, the SCSL and the ICC, as well as the International Court of Justice have consistently interpreted pillage. Whether the prohibition applies to specific instances of natural resource exploitation by armed groups therefore depends on the broader issue of ownership of natural resources in international law.

Natural resource ownership in international law is regulated by the principle of permanent sovereignty over natural resources (PSNR) and the right to self-determination. The principle of PSNR emerged notably within UN General Assembly Resolutions adopted during the 1950s and 1960s. The most authoritative definition of PSNR is contained in the Declaration on Permanent Sovereignty over Natural Resources, which is considered to be part of customary international law. The declaration frames PSNR as a right for States and peoples to freely dispose of their natural resources. Likewise, the identical article 1(2) of the ICESCR and the ICCPR formulates a right for peoples to freely dispose of their natural resources as an inherent component of their right to self-determination. While the notion of ‘peoples’ originally referred exclusively to colonial peoples and was intrinsically connected to external self-determination, human rights law has evolved to recognize a right to internal self-determination for particular groups within a State (indigenous peoples, minorities) as well as for the population as a whole. This right is interpreted as ‘requir[ing] the ongoing choice of the people as to their governance, and, in turn, their economic, social and cultural development’ (here, p. 120). It should however not be confounded with ownership of natural resources, which is still intrinsically connected to State sovereignty. Rather, it should be interpreted as giving rise to a ‘duty of the central government to use the resources in a manner which coincides with the interests of the people’ (here, p. 101). It is therefore highly unlikely that armed groups could legally exploit natural resources based on the right to self-determination. For this, the group would have to qualify either as a national liberation movement representing a people having a right to external self-determination or as the de jure representative of the State. The latter position is however generally reserved for the government in power until the armed conflict is over.

Nevertheless, given the centrality of the interests of the people in the legal framework governing the ownership of natural resources, a case can be made in favour of assuming that armed groups exercising effective control over territory have responsibilities with respect to the inhabitants of this territory. An analogy can be made with occupation law, which clearly distinguishes between the ousted government as de jure authority and the occupying power as de facto authority. Article 55 of the 1907 IV Hague Regulations designates the occupying power as ‘administrator and usufructuary of public buildings, real estate, forests, and agricultural estates belonging to the hostile State, and situated in the occupied country’ and it formulates an obligation for the occupant ‘to safeguard the capital of these properties, and administer them in accordance with the rules of usufruct’. Applying the principle of usufruct to armed groups controlling parts of the State’s territory to the same degree as an occupying power (see Article 42 of the 1907 IV Hague Regulations) would provide an elegant solution, providing a legal basis for natural resource exploitation to armed groups as de facto authorities without undermining the fabric of State sovereignty (see also Stewart here, p58-62). A modern interpretation of the principle of usufruct would furthermore impose obligations on armed groups to exploit natural resources in a sustainable manner and for the exclusive interest of the people of the territory under their control. Monitoring mechanisms that can be envisaged for this purpose could be modelled after existing track-and-trace systems for minerals, combined with a system of quota for the export of natural resources from territories controlled by armed groups. This solution would further advance the objectives of IHL to provide protection to the civilian population as well as provide avenues to break the connection between armed groups and transnational organized crime. As such, it would strengthen rather than undermine efforts to stop the trade in conflict resources.

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