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Responsible Business and Sustainable Investment in the Natural Resources Sector in Asia and the Pacific

image of Responsible Business and Sustainable Investment in the Natural Resources Sector in Asia and the Pacific
Natural resources represent a large share of FDI inflows to the Asia-Pacific region. Covered in this study are oil, gas, mining, hydropower, and large tract plantations such as palm oil and rubber (but not agriculture). These sectors share a number of common features relating both to the nature and the social and environmental impacts of FDI. Growing worldwide demand for these finite resources has made them increasingly attractive investment opportunities. Over the past few years, ESCAP has been actively working to support increased implementation of more inclusive and sustainable business practices in the Asia and Pacific region. This study builds on this work by providing a review of the issues, challenges, instruments and tools related to responsible business and sustainable FDI in the natural resources sector in the Asia-Pacific region. The ultimate objective of the study is to promote FDI that brings a satisfactory return on investment for the business or investor and a positive social return on investment for the host country whilst ensuring environmental sustainability.

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Executive summary

Natural resources sectors such as mining, oil, gas, hydro, and forestry plantations are an integral component of most developing economies in the Asia-Pacific region, thereby making them attractive investment sectors for both transnational corporations (TNCs) and state-owned enterprises (SOEs). The region produces well over a quarter of the world’s crude oil and natural gas, over 60% of the world’s coal, sizeable percentages of other metals and minerals, and nearly a third of all energy produced from hydropower. It is also the world leader in exports of intensive plantation commodities such as timber, rubber and palm oil. China is the world leader in coal and timber. It also produces a fair amount of oil and gas, has the highest number of hydropower dams, and has the second largest non-fuel mining sector in the world. Oil and natural gas production are concentrated in the Russian Federation. Australia is the world leader in mineral production, though Indonesia, Kazakhstan, Mongolia, Papua New Guinea and the Philippines also have significant mineral mining sectors. Indonesia, Malaysia and Thailand have the world’s largest rubber and palm oil plantations.

English

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