Extractivism

by Diana Vela Almeida

La versión en español de este artículo está disponible aquí.

One could simply define extractivism as a productive process where natural resources are removed from the land or the underground and then put up for sale as commodities on the global market. But defining extractivism is not really this easy. Extractivism is related to existing geopolitical, economic and social relations produced throughout history. It is an economic model of development that transnational companies and states practice worldwide and that can be traced back more than 500 years all the way to the European colonial expansion. You can’t tell the history of the colonies without talking about the looting of minerals, metals, and other high-value resources in Latin America, Africa, and Asia—looting that first nourished demands for development from the European crowns and later from the United States, and more recently also from China.

Today this model of accumulation of wealth remains a key part of the structure of a globally dominant capitalistic system—a system where power is in the hands of those who control money and industry—that has extended the extractive frontier to the detriment of other forms of land and resource uses. Such exploitation has also appropriated human bodies in the form of slaves or, more recently, as labor-intensive precarious workers. Extractivism is entirely tied up with exploitation of people.

Today’s extractive industries such as gas, oil, and mining have an egregious reputation of violating human and environmental rights and supporting highly controversial political and economic reforms in poor countries.

Expanding the global frontiers of extraction

Since the mid-20th century, extractive frontiers have expanded around the planet as global demand for commodities has increased. Most non-industrialized countries (but also industrialized countries such as Norway, Canada, and the US) have activated their primary sectors of production to exploit landscapes that were previously inaccessible, such as in the case of fracking and tar sands extraction in the Artic or in the open sea.

Since the mid-20th century, extractive frontiers have expanded around the planet as global demand for commodities has increased.

The central idea behind such state-sanctioned extractivism is that extractive projects are strategic ventures for national development in resource-rich countries that can thereby strengthen their comparative economic advantages—that is, their economic power relative to the economic power of other nations. In other words, poor nations can exploit their natural resources as a means for economic growth, a source of employment, and ultimately a tool for poverty reduction.

This idea has been ingrained for many years in developing countries, and yet these countries have historically been unable to convert resource wealth into so-called development. Indeed, in some places that are rich in natural resources—typically in African countries with large oil or mineral deposits—there is an inverse relationship between poverty reduction and economic performance. This means that a lot of extractive activity is coupled with high levels of poverty, economic dependency on capital flows from developed countries, and political instability. This phenomenon is known as the “resource curse.”

In the last 20 years, several governments in Latin America, Africa, and Asia have challenged the “resource curse” by asserting national control over new forms of primary-production extractive industries. These are oriented around intensive and large-scale projects that cover previously inconceivable environments (again, like off-shore mining or fracking), as well as new forms of economic exploitation such as the agroindustry, fisheries, timber extraction, tourism, animal husbandry, and energy megaprojects.

These endeavours require national policy reforms. In Asia and Africa, extractivist national policies adhere to what is called “resource nationalism” and include the total or partial nationalization of extractive industries, renegotiation of contracts with foreign investment, increased public shareholding, new or higher taxation to expand resource rent, and value-added processing of resources.

In Latin America, the commodity boom at the beginning of the 2000s, marked by the increase in commodity prices together with transnational investments, led to great economic growth in what is called “neoextractivism”. Neoextractivism is a relative of resource nationalism and its emergence coincided with the rise to power of several progressive governments in the region that also seized more state control over natural resources within their national boundaries.

Advocates of neoextractivism claimed that new extractive practices would be “environmentally friendly” and “socially responsible”, thereby minimizing the disastrous impacts of extractivism as it was practiced throughout colonial and neoliberal history. Despite this, extractive industries have expanded and continue to expand in new frontiers with the negative effects of dispossessing people from their land, subjugating communal values to the values of extraction-driven development, and disrupting social structures, territories, and alternative forms of life.

In the debate over extractivism, there is no consensus about how to solve the problems caused by this mode of development. Some people think that extractivism should be viewed positively because of the economic growth and increased public spending that was accomplished during the early 2000s in Latin America. Others emphasise that most of the wealth produced is siphoned out of the producer countries to transnational investors, while negative impacts remain locally or regionally. And from the perspective of those who are directly affected by extractive industries, it is clear that economic revenues are not translated into socially just well-being and that these revenues are generated through the destruction of their lives and their land.

Not a neutral economic model

To further understand the complexity of the problem with extractivism, let us look at three interrelated dimensions of what makes up the extractivist economic model—and then consider how to go beyond the economic considerations of extractivism.

First, for extractivism to work, any biophysical “nature” becomes exclusively framed as a natural resource. That is, nature is conceived as an input (e.g. a resource like oil, soil, or trees) for the production of a commodity (e.g. gas, food, or timber). This simplifies the multiplicity of socionature relations with which such an economic model is entangled.  

When thinking about the environmental impacts of extraction, we surely need to consider what will happen to other elements in nature that are interconnected with the extracted resource, including water, air, soil, plants, and human and non-human animals. A cascading effect of environmental change indeed often occurs in ecosystems that are impacted by extraction, and thus interrelated elements of nature become irreversibly altered.

Second, extractive projects are normally located in or close to marginal, poor, and racialized (i.e. conceived as non-white) populations. Extractivism arrives with promises of improved life conditions, more jobs, and infrastructure development. But large-scale extractive industries are by no means necessarily interested in forwarding local employment and improving the livelihood of people. Instead, experience tells us that they often serve to diminish alternative economic activities and disrupt existing community networks and social structures. Extractive industries have frequently dispossessed people of land rights with the result of cultural disruption and violence.

Demands for social and environmental justice revolve around claims that the social and environmental costs of extractivism are higher than any economic benefit.

Marginal populations still bear the brunt of the social costs of extractivism and don’t necessarily reap any benefits. In response to this, demands for social and environmental justice revolve around claims that the social and environmental costs of extractivism are higher than any economic benefit but that these costs are not accounted for in the decisions.

New demands from feminist movements and women Indigenous defenders highlight the relation between extractivism and patriarchal and racial violence and how this disproportionately impacts women. Examples are the increase in prostitution and sexual violence in communities restructured by extractivism and the externalization the social costs—the transfer of responsibilities for caring that are pivotal for the functioning of any economy—to women. As women are primarily responsible for the reproduction of life, they are highly vulnerable to the rupture of community or loss of territory. Because of that, women organizations have become the frontline defenders of their territories in the resistance against extractivism.

Finally, extractivism is a highly political endeavour that maintains a model of capital accumulation and destruction. It has led to the increase of socio-environmental conflicts around the globe, involving measures by states and industry to control resistance and criminalize social protest.

So, in sum, one should define extractivism as far from neutral or apolitical; it is an economic model that reflects a specific political position that relies on a given, predefined understanding of growth-oriented development as the ultimate good. Extractivism thereby reinforces political-economic arrangements that are biased against marginalized people who are deprived of their power to influence political decisions.

From an extractivist political perspective, resistance against extractivism is naïve, obstinate NIMBYism (Not in My Backyard-ism), or ignorant of the economic needs of the countries that could be “developed” by extractive projects. In reality, actions of resistance are contestations that challenge the dominant extractivist worldview and the uneven power relations between actors who decide, actors who benefit, and actors who bear the negative consequences of extraction. Under these conditions, extractivism is in complete contradiction to social and environmental justice and care for nature and life itself.

All in all, extractivism as a single model of production remains one of the most expansionist global enterprises and it squashes any other ways of living with the land. The 500 years’ legacy of extractivism is part of ongoing imperialist interest from industrial powers in securing access and control over natural resources around the globe, even in today´s green energy transitions. As such, extractivism stands in sharp contrast to flourishing alternative forms of land use and livelihoods.

Opposition to extractivism does not mean that people can’t use a resource at all and by no means implies a binary choice between either extractivism or underdevelopment. Instead, anti-extractivism is about focusing on what type of life we want to achieve as a whole and how we build global systems of justice. We can nourish ourselves from several non-extractivist modes of production and reproduction that center on a dignified life for all.  

Further resources:

Bond, P. (2017). Uneven development and resource extractivism in Africa. In Routledge Handbook of Ecological Economics (pp. 404-413). Routledge.

  • This article explains the expansion of neoliberal environmentalism in the extraction of non-renewable natural resources in Africa. The author argues that if accounting the social and environmental costs, African countries end up poorer than before extraction.

Burchardt, H. J., & Dietz, K. (2014). (Neo-) extractivism–a new challenge for development theory from Latin America. Third World Quarterly35(3), 468-486.

  • An overview of key debates of ‘Neo-extractivism’ and the role of the state in Latin America.

Engels, B., & Dietz, K. (Eds.). (2017). Contested extractivism, society and the state: Struggles over mining and land. Palgrave Macmillan.

  • A presentation of several case studies around the globe on the conflicts between extractivism and other land uses.

Galeano, E. (1997). Open veins of Latin America: Five centuries of the pillage of a continent. NYU Press.

  • A classic essay on the history of the looting of natural resources, colonialism and uneven development in Latin America from the 15th century to the 20th century.

Svampa, M. (2015). Commodities consensus: Neoextractivism and enclosure of the commons in Latin America. South Atlantic Quarterly114(1), 65-82.

  • A critical analysis of neo-extractivism, capital accumulation, environmental conflicts and development. It ends up discussing proposals around ideas of post-extractivism and transitions.

Diana Vela Almeida is a postdoctoral fellow at the Department of Geography at the Norwegian University of Science and Technology. Diana combines political ecology, ecological economics and feminist critical geography to study extractivism, neoliberal environmentalism and socio-environmental resistance. Contact: diana.velaalmeida[at]ntnu.no

Hydro power projects as a resource curse

Indian Buddhist monks and nuns attend a special prayer session 'Avalokesteshvara Initiation' with Tibetan spiritual leader the Dalai Lama at Yid-Gha-Choezin in Tawang, in the northwestern corner of Arunachal Pradesh state, on November 10, 2009. The Dalai Lama held a mass audience with tens of thousands of devotees on a "non-political" visit to a region near India's border with Tibet that has drawn shrill protests from China. AFP PHOTO/Diptendu DUTTA (Photo credit should read DIPTENDU DUTTA/AFP/Getty Images)
Indian Buddhist monks and nuns attend a prayer session with Tibetan spiritual leader the Dalai Lama in Tawang, in the northwestern corner of Arunachal Pradesh state, on November 10, 2009.  Source: AFP PHOTO/Diptendu Dutta.

by Soumik Dutta

On May 2nd, 2016, two people, including a Buddhist monk, were killed when police fired at a crowd of protestors in India’s Arunachal Pradesh state bordering China—injuring ten others. The protest was sparked by the arrest of Lama Lobsang Gyatso, a monk active against mega power projects in the Tawang district.

Anti-dam protesters in Arunachal include various student bodies, environmental groups, and civil society organisations. This January, hundreds of Buddhist lamas joined protests in Tawang, a smaller district in the province, to say no to large dams in the ecologically, culturally and strategically sensitive area. Various Indian national level media outlets reported the Tawang protests, and people’s Facebook news feeds were abuzz with the Tawang firing.

At the root of the protests are changes to India’s energy policies, said to be crucial for the country’s economic development. India’s National Hydro Power Policy of 2008 had identified a total capacity potential of 1, 48,701 MW of hydropower in the country, of which 50,328 MW was in Arunachal Pradesh alone. Of these, the 2,000 MW Lower Subansiri hydro project 80% of the construction of which has been completed has been stuck since December 2012 following massive protests in downstream Assam.

At the root of the protests are changes to India’s energy policies, said to be crucial for the country’s economic development.

The Arunachal Pradesh government has signed several Memoranda of Understanding (MoUs) with various companies for over 100 big and small hydropower projects in the state, and 13 of these with a total installed capacity of 2791.90 Mega Watts (MW) are in Tawang. The abundance of rivers in the Himalayas and the nation’s ever-growing demand for power propelled the government of India to envision a national hydro power policy that would exploit the vast hydro power resources of Himalayan states like Sikkim, Himachal Pradesh, and Arunachal Pradesh.

Energy is crucial to the economic development needs of every nation. Hydro power, which was considered clean energy with very negligible impact, has however turned out to be quite the opposite. Often, projects have socio-cultural impacts on communities dependent on the river and often have disastrous environmental results. In many cases, the myth about hydropower being cleanest and safest is turning out to be untrue. Human lust for more economic development and the consequent need for more power has created a situation where water, the most abundant natural resource, has become a bane—a resource curse.

The Arunachal firing is a case in point. Many other states in India have witnessed similar protests and ruthless oppression by the government. In fact, when it comes to hydro power projects globally, a politician-corporate development nexus that results in the oppression of civil protests has become a common scenario. International organizations, politicians, investors, and developers are uniting to participate in the systematic plunder of the most abundant natural resource, water, in the garb of economic and sustainable development of nations.

 

Sustainable energy or environmental conflict?

Hydro power is often put forward as a clean, sustainable form of energy. In the case of India’s Himalayan states, there are both public and private benefits. Apart from the incentive of generating revenues from sale of hydro power, the certified carbon reductions (CERs) from the United Nations framework convention on climate change (UNFCCC), under the Clean Development Mechanism (CDM) has worked as a strong factor for both the private project developers and the government for pursuing hydro power projects.

But NGOs like the Save Mon Region Federation (SMRF) are of the opinion that these proposed and upcoming hydro power projects would adversely impact the fragile Eastern Himalayan ecosystem, which is also a seismically vulnerable zone that has experienced several major earthquakes over the past few decades.

protest
Source: SANDRP

On April 7th, in response to a petition filed in 2012 by the SMRF, the National Green Tribunal (NGT) suspended the environment clearance granted by the Indian environment ministry for the $64 billion Nyamjang Chhu hydropower project in Tawang’s Zemingthang area. The NGT asked for new impact assessment studies and public hearings for local people.

The NGT also noted that the project promoted by the steel conglomerate LNJ Bhilwara Group did not consider its impact on the habitat of the endangered black-necked crane, which is endemic to the region. The bird is rated “vulnerable” in the International Union for Conservation of Nature’s list of endangered species and is listed in schedule 1 in India’s Wildlife (Protection) Act of 1972.

The black-necked crane also has significant cultural value to communities in the region. “We connect it with the sixth Dalai Lama who was from Tawang,” said Lama Lobsang Gyatso, the general secretary of SMRF, speaking to Uneven Earth. “He wrote poems on the bird. Apart from local sentiments, the bird has been labelled endangered by law. The Bombay Natural History Society selected Zemingthang [an area within Tawang] as an important bird area for this reason.”

As a result of its activities, the SMRF became unpopular with the government, which branded it as anti-development, leading to the subsequent arrest of its leader and the police firing.

As a result of its activities, the SMRF became unpopular with the government, which branded it as anti-development, leading to the subsequent arrest of its leader and the police firing. Undaunted, after his release on bail, Gyatso’s SMRF, along with another NGO, 302 Action Committee, submitted a memorandum to the deputy commissioner of Tawang demanding a probe by central bureau of investigation(CBI) New Delhi into the May 2nd killing at Tawang. The state government had constituted a magisterial inquiry and suspended several police officers involved in the incident.

Gyatso and his associates reiterated that if CBI investigation into the incident is not done, they will resort to demonstrations in front of the United Nations office New Delhi, apart from protest rallies in Itanagar and Tawang.

delhi_dharna_06
Affected Citizens of Teesta raising awareness against the dam projects on the Teesta river in Sikkim, another northern state. Source: ACT.

Cultural genocide: Sacred Buddhist River in peril in Sikkim

Protests against hydro power projects across India are not new. In Sikkim, communities have been protesting against the Rathong Chu hydropower projects since the mid-nineties, when the Sikkim Democratic Front Party (SDF) government, under Chief Minister Pawan Chamling, had decided to go ahead with a proposed 30 MW hydropower project on the Rathong Chu river, despite tremendous pressure against it, mainly on religious grounds.

Rathong Chu is considered to be a ‘sacred’ river according to Neysol and Neyig Buddhist texts, the water of which is used even today for an annual Buddhist festival – Bum Chu, at the Tashiding Monastery. This has been an important Buddhist tradition since the time of the erstwhile Chogyals (Kings) of Sikkim from the Namgyal dynasty.

Eventually in 1997, under scathing criticism of infringement on cultural and religious rights of Buddhist minorities, the Chamling government decided to scrap the project. Ironically, the same Chamling-led SDF government allotted another project on the Rathong Chu river, a little further downstream, in the year 2006. In fact, the project capacity now was enhanced from 30 MW to 97 MW! While the earlier project was called the Rathong Chu HEP project, it was now rechristened the Tashiding Hydro Power Project.

“We will not stop until we are able to stop attacks on Buddhist religious sites in the name of development.” -Tseten Tashi Bhutia, of Sikkim Bhutia Lepcha Apex Committee.

But local groups continue to fight against these proposals. “We will not stop until we are able to stop attacks on Buddhist religious sites in the name of development”, said Tseten Tashi Bhutia of Sikkim Bhutia Lepcha Apex Committee (SIBLAC), an NGO fighting against the Tashiding and Panan projects, speaking to Uneven Earth.

As part of these protests, Sikkim witnessed the longest indefinite hunger strike in the province’s history. The action was called on 20 June 2007 by the Affected Citizens of Teesta (ACT), an NGO formed to fight the government’s decision to build seven large-scale hydroelectric projects within the ancestral lands of the indigenous Lepcha community. Although the Lepcha are also found in other parts of India and in Nepal, around 86 percent of their 9000-strong population resides in Dzongu.

The Dzongu area was traditionally known as Myal Lyang in Lepcha language or Beyul Demazong in Bhutia – the latter meaning ‘land of sacred and secret treasures’ and the former meaning, essentially, paradise. It was here that, according to legend, the Lepcha god created the first Lepcha man and woman from the sacred snow of the mighty Khangchendzonga (Kanchenjunga)—the world’s third highest peak, which the Bhutia and Lepcha revere to this day as a protective deity.

In fact, within the core area of the proposed Panan hydroelectric project (300 MW) are a host of sacred sites: the Kagey Lha-Tso Lake, the Drag Shingye caves, and the Jhe-Tsa-Tsu and Kong-Tsa-Tsu hot springs, which are said to be endowed with healing properties. Indeed, the entire northern district of Sikkim has numerous such ‘treasures’, each of which was blessed by Guru Rinpoche (Padmasambhava), the patron saint of Sikkim. Panan is one of the more disputed projects proposed for Dzongu – an area not only sacred but also falling dangerously close to the Khangchendzonga National Park, an area rich in flora and fauna.

slide-2
Source: Save The Teesta

The hydro bubble is bursting in India

Hydro-power projects are often proposed as a tool for profit generation, local economic development, and a renewable, sustainable source of energy generation. However, this win-win situation is turning out to be a nightmare of sorts with most of the ‘clean’ energy projects in these states failing to take off after several years of having signed the MoU with state governments. In many cases, the registration process they followed flouted the CDM norms, with project design documents often filled with blatant lies.

This is then coupled with delayed projects accruing huge debt—liability burdens which are being passed on to the respective states. After almost a decade of signing their MoUs, both the companies as well as the respective governments have accrued huge debt burdens due to inordinate delays in implementation with pretext after pretext—making many projects economically unviable due to the present day inflation and market rate of interest.

The returns on investments are bad, production cost high, and sale price of a unit of power low.

In the financial year 2015, India generated 1048.7 Billion Units (BU) of electricity, out of which only 133 BU was from the hydro power projects. Out of the 1048.7 BU electricity produced, 90% is sold through long-term power-purchase agreements, while the rest is traded on the short-term spot market. It is here that corporate power producers will have to make their profits.

But Sikkim, with an annual state budget of $315.86 million, has equity participation worth $230 million. Simply put, it took on huge debt to buy equity and with project delays and abandonment, leading to spiraling burdens that are then being passed on to the people. This has resulted in an absurd situation, where the production cost of one unit of electricity has become more costly than the sale price.

In March 2016, India’s ministry of power intervened to restore three stalled power projects in Sikkim; Panan (300 MW), Teesta VI (500 MW), and Rangit IV (120 MW) with total installed capacity of 920 MW. In a meeting held at New Delhi between the Sikkim government, the private developers of these projects, and the national hydro electric corporation of India (NHPC), Sikkim was asked to either incentivize the independent power producers, or cancel their MoUs after compensating them for investments in the projects.

The independent power producers are not keen on further investments, as breaking even will be impossible in the short term. The returns on investments are bad, production cost high, and sale price of a unit of power low.

 

The mega hydro power projects that fail

Hydro power projects all over the world are subject to widespread criticism for alleged human rights violations. Apart from the catastrophic environmental and geological disasters they trigger, they also resort to land acquisition—often forced—leading to displacement of people. These mega projects are most often imposed upon people in the garb of development; allowing a nexus of governments in collusion with corporate entities engage in this process of plunder. International funding agencies like the World Bank and private equity investors pump in huge quantities of money. Often, these companies or their front (shell) companies are based in tax haven countries and the money trail is obscure.

These mega projects are most often imposed upon people in the garb of development; allowing a nexus of governments in collusion with corporate entities engage in this process of plunder.

For example, in South America the Yacyretá Dam on the Parana River, which lies on the border between Argentina and Paraguay, generated controversy and criticism during its planning and construction, and is often referred to as a ‘monument to corruption’. While initially the construction costs of the dam were slated at $2.5 billion, eventually they escalated to $15 billion.

Environmental and social impacts run rampant. In China, the Three Gorges Dam project was held responsible by scientists and environmentalists for causing draughts in the upstream of Yangtze River and for increasing the frequency of landslides and earthquakes along areas next to the structure. The project also submerged a number of factories, mines and waste dumps, and a few industrial centres, which are alleged to have polluted the river. Biodiversity experts believe that the Three Gorges Dam has affected hundreds of animal and plant species in the Yangtze River and threatened the fisheries in the East China Sea.

Another glaring example would be in Brazil. Best known to the world for football and samba—and the upcoming Olympics, the country is now in the limelight for anti-dam protests against the Belo Monte Dam project which has been under construction since March 2011. The project, situated on the Xingu River in the state of Pará, faces fierce resistance from the Xingu’s Indigenous peoples and social movements, with support from international agencies.

With an expected 11,233 MW installed capacity, Belo Monte will be the world’s third biggest hydroelectric project when it starts full-fledged operation in 2019. The project was first proposed in 1975 but subsequently abandoned due to stiff opposition from environmental activists and local people. It was redesigned and revived in 2003, and received partial environmental license from the Federal Environmental Agency (IBAMA) in February 2010. The redesigned project, which is being constructed with an estimated investment of $13bn, is now battling at national and international tribunals against charges of displacing thousands of indigenous people and devastating over 1,500km2 of Brazilian rainforest in the Amazon basin.

In Tawang, hydro power projects have also failed to meet development promises by the government. While work on 13 hydro-electing projects in Tawang is currently going on, the government has planned a total of 28 mini- and micro-dams in the district. Even though the power requirement of the district is 6.5MW, if all these mini and micro projects were to produce the electricity as shown on paper, it would be more than 20MW. However, even after many of these projects were completed, they failed to produce adequate electricity, so much so that there are long hours of power cut even in Tawang’s sub-zero temperatures.

aapsu-candle-light-vigil-450x300
Source: Save Tawang

Conclusion

Development of every nation comes at a cost. The complex nexus and vested business interest of corporate groups, international funding agencies, private equity investors and powerful politicians have created a systematic plunder of natural resources, be it water or coal. However, development needs to be sustainable and not detrimental to the environment. The May 2nd killing in Tawang is a grim reminder to the policy makers that the development path chosen was fraught, to say the least. Globally, due to inflation, escalation of project costs and low returns on investments, many mega projects have failed to deliver as expectated, some have even failed to take off and too many have led to dissidence, socio-cultural rifts, and environmental disasters.

 

Soumik Dutta is a Graduate in Economics from Scottish Church College University of Kolkata, and a a freelance investigative journalist covering hydro power projects and protests by affected people, corruption of government and corporations, and environmental violation by infrastructure projects. He has published his stories in the likes of Outlook Magazine, Cobrapost, hundredreporters.org, and thirdpole.net. He loves travelling, music, reading, and good food.

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