Louis Putzel – China and sustainability in global extractive industries

In the 2000s, China emerged on the global scene as a huge new consumer market and a source of outward investment in many natural resource sectors. Exports of resources such as timber and minerals from developing countries to China surged. The extractive industries associated with many of those resources are associated with heavy environmental footprints, and capacity for regulation and enforcement is highly variable from country to country; this shifts the onus of responsibility towards buyers and investors. For this reason, Chinese companies operating in resource sectors in developing countries have been operating under the critical spotlight of environmental and social advocacy groups, the media, and a growing research community. Faced with significant reputational risks associated with doing business in extractive industries worldwide, both Chinese companies and the national government have been working in this decade to develop and incorporate new standards of corporate social and environmental responsibility. This talk is a reflection on some of the main CSER challenges faced by Chinese business in developing countries, primarily in the forestry sector, highlighting findings from work conducted by numerous CIFOR researchers and associates for more than ten years. A complex picture emerges, revealing many different patterns of corporate activity associated with the China market along with the persistence of a number of long term failures to address the negative social and environmental outcomes of extractive industries. These cases are useful to inform specific policy measures, but also indicate larger systemic failures that likely can only be addressed through fundamental changes in local resource governance and practice in producing countries. With significant and unique experiences in reforming land tenure and forest management at home, is there a new role for China and Chinese institutions as a leader in sustainable development, and sustainable markets, at the global level?

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