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Developing Countries: Fossil Fuels

Volume 461: debated on Tuesday 19 June 2007

To ask the Secretary of State for International Development what analysis his Department has (a) commissioned and (b) evaluated of the impact on the welfare of people in developing countries of fossil fuel extraction in those countries. (142894)

DFID’s primary involvement with fossil fuel extraction projects in developing countries is an indirect one, as a “shareholder” in multilateral financial institutions, such as the World Bank group and the Regional Development Banks, which invest in projects in this sector.

However, DFID reviews how the effects of fossil fuels extraction are managed as part of a commitment to sustainable development and attainment of the Millennium Development Goals.

DFID has supported non-governmental organisations in the analysis of the impacts of extractive industries, including fossil fuels. For example, work on the Democratic Republic of Congo looked at natural resource governance. DFID also takes note of the many studies about opportunities and effects of extractive industries, including work by Transparency International, the “Publish What You Pay” campaign and the Resource Endowment Study of the International Council on Mining and Metals.

DFID was actively engaged in the Extractive Industries Review and the International Finance Corporation’s review of its environmental and social safeguards policies and procedures. These safeguards are a key tool to ensure the prudent management of the exploitation of natural resources in developing countries. This includes the impact on welfare of people in those developing countries.

DFID has provided support to countries wishing to implement the Extractive Industries Transparency Initiative (EITI). This initiative supports improved governance in resource-rich countries through full publication of company payments and government revenues from oil, gas, and mining. EITI enables non-governmental organisations to participate in the process and work with government and companies to ensure that revenues from extractive industries are fully disclosed.