Digging in the shadows: Eastern Europe and Central Asia's opaque extractives industry
Extractives projects, such as mines and oil fields, are one of the main sources of human rights abuses in Eastern Europe and Central Asia, with hazardous working conditions, labour rights abuses, effects on the health of local communities, and severe environmental impacts.
Despite such serious allegations, Western companies and financial institutions have invested significantly in extractives projects in the name of development, and continue to do so. While socioeconomic development is greatly needed in the region, growth without human rights inherently undermines the stated purpose of development: to improve the lives and well-being of the individuals and communities within a society. Although companies and business activities can be key drivers of sustainable development, they can also fundamentally undermine human rights through abuses and unintended impacts. This is especially true in Eastern Europe and Central Asia, where human rights impacts linked to business activities often go unaddressed and unremedied.
Business & Human Rights Resource Centre has sought to illuminate these issues by analysing the human rights policies and performance of 30 extractives companies in Eastern Europe and Central Asia, with a focus on Armenia, Georgia, and Kazakhstan. In doing so, we aim to draw attention to the major human rights risks and impacts within the region, as well as address the lack of information around business activities. While our findings focus in on the top 10 extractives companies in Armenia, Georgia, and Kazakhstan, we believe this research is indicative of broader trends in these countries, as well as the region as a whole.
Key Findings
Poor access to information around human rights
Activists and communities cannot effectively fight for their rights if they are unable to prove abuses are taking place. Poor access to information is a major underlying issue in all three countries, and data on these companies was often hard to come by. BHRRC researchers faced extreme difficulties finding any information on the human rights performance of 8 of the 30 companies. Twenty-two of the 30 have noted issues around access to information.
Policies vs. performance
Only 19 of the 30 companies had publicly available statements related to occupational safety, environmental management, and/or other human rights topics. For companies with human rights policies, research demonstrated a fundamental disconnect between public commitments and actual performance. Eighteen of the 19 companies with human rights policies faced allegations of damage to water and the environment, despite their public commitments. Many of the companies with the most comprehensive human rights policies also were accused of severe human rights allegations. For example, 7 of the 19 companies with human rights policies faced allegations around deaths or violence. Five of these instances were in Kazakhstan, where all 10 companies have detailed human rights policies.
Business & Human Rights Resource Centre
Western investment
Kazakhstan, Georgia, and Armenia are all resource-rich, leading foreign financial institutions and corporations to invest significantly in extractives projects. U.S.- and Europe-based investors such as the European Bank for Reconstruction and Development, the International Finance Corporation, and the World Bank Group have supported at least 12 of the 30 companies we researched. Companies based in Western Europe, Canada, and the U.S. hold ownership or significant shares in 16 of the 30 companies.
Although financial institutions and parent companies have significant influence over the extractives projects they invest in, they have rarely intervened in serious allegations of abuse. By failing to adequately address complaints, companies and financial institutions often violate their own social, environmental, and human rights standards.
Download the report
The full key findings report outlines the main issues documented, details emblematic case studies for each, and explores the interconnected nature of actors in the region.
Detailed company profiles
Explore the research behind 'Digging in the shadows' with our detailed company profiles. Each profile reviews the publicly available information for each company, including human rights policies, corporate ownership structures and allegations of abuse.
Western ownership and investment
Review a brief snapshot of findings pertinent to investment, and select company profiles based on investment and ownership relationships.