Calls for Stronger Monitoring of the Extractive Industry

Participants at a recent conference on the oil and gas sectors called for stronger legislation that empowers the government for assuming a stronger role in monitoring of extractive practices in these sectors. The range of recommendations was quite diverse and included providing provincial and local governments with a enhanced role in development of projects in their geographical jurisdictions, better oversight of CSR fund uses and reduction in 'payments' (read bribes) to fedual lords.

The oil and gas sector is an important part of the Pakistan economy, attracting substantial Foreign Direct Investment ($612m in 2008-2009). By most accounts, there is huge potential for expanding the size of this contribution and the Government has taken several measures to promote further investments including allowing for 100% foreign equity, easy repatriation of profits etc. (see www.boi.gov.pk for details). For all these efforts, critics including the Oxfam supported Participatory Development Initiative have argued that the extractive industry regularly and blatantly violates provisions for CSR as contained in the Petroleum Concession Agreements, which legally bind companies in the sector to undertake CSR activities in the regions where they are extracting oil and/or gas.

Civil society discontent against the extractive industry, both in terms of its impact on the environment and its implications for local population, is not limited to Pakistan and the sector has been at the centre of much heated debate and resulting in the Extractive Industries Transparency Initiaive, a global call for action for responsible practices, established in 2003 and which outlines a set of principles for the industry to follow. Pakistan, despite its sizeable sector, is not a part of the EITI and it's about time that it should.