The extractive industries: a particular concern



photo: geekzter

The extractive industries – whether mining, oil and gas, or other – have significant environmental and social impacts.  Their business is to extract natural resources – to find deposits in the Earth, remove them, process them, and put them to use for human beings’ purposes.  These processes necessarily involve big environmental and social impacts.

The fact that many extractive companies are also multinational, and operate in far-reaching corners of the world, complicates the picture further.  It means that they are often operating in previously non-industrialised areas and cultures - creating significant risk to previously untouched environments, and complicating those companies’ social role. It also creates major challenges for ensuring due accountability.

Resources are almost always located under land on which people live or rely, or which is of environmental value. The process of extraction is resource intensive, in terms of energy, water and chemical use. It creates major environmental risks relating to the management of waste, and in the case of spills or leakage. Many extractive companies operate in areas of social or political conflict – indeed increasingly extractive companies will be forced to work in more and more challenging environments, as easily accessed resources become scarcer and scarcer. The political history of the West’s international role can further complicate the social role and perception of Western companies.

Financial contributions made through taxation or joint ventures with ‘Host States’ outside of the West can constitute very significant proportions of overall public revenue in these countries - bringing both societal opportunity and great societal risk. At the other end of the process, many of the materials produced by the extractive industries play fundamental parts in the infrastructure that underpins industrial and post-industrial societies, and the products that have become an everyday part of life for many in the West.

The activities of these companies have huge global environmental and social implications – it is therefore essential that these companies operate transparently. For these reasons, the extractive industries are a key sector of focus for ClientEarth’s work on company transparency.

You can read more about these industries and their impacts on our blog.