Fair Finance Asia Advocates for Equitable Governance in ASEAN's Minerals Trade

In a groundbreaking report, Fair Finance Asia (FFA) and research partner Profundo reveal the systemic exclusion of Southeast Asian nations from the value chains exploiting their critical minerals. The study, titled "Extraction to Equity", sheds light on the complexities surrounding trade agreements and financial dynamics affecting countries such as Cambodia, Indonesia, the Philippines, and Thailand. Unlike typical analyses, this report probes the implications these agreements have on environmental and social governance (ESG) standards.

The data compiled up to December 2025 reveals a troubling trend: local-benefit provisions, sustainable practices, and equitable sharing of resources are conspicuously absent from many agreements, reinforcing a scenario where raw minerals are extracted from these nations while the processing occurs elsewhere. Much concern arises over the demand dynamics, questioning whether the drive for these resources is primarily from renewable energy needs or linked to defense priorities, leaving local communities vulnerable and unheard.

The Call for Change

FFA's report emphasizes the necessity for ASEAN member states and funding authorities to develop policies that boost alternatives to extractivism. It suggests endorsing the UN Principles aimed at steering the critical energy transition towards equity and justice. The insights from various stakeholders in the report underscore a pressing need for a paradigm shift in how mining contracts are approached. Bernadette Victorio, Program Lead at Fair Finance Asia, argues that AFA is pioneering this analysis terrain owing to its commitment to advocate for communities deeply affected by extractivism, who often lack the tools to negotiate fair terms in these agreements.

Juliette Laplane, a Senior Researcher at Profundo, asserts, "Critical minerals agreements must transcend market access to include enforceable safeguards such as local value addition, equitable pricing, and civil society involvement." This sentiment is echoed by Sophoan Phean, the National Director of Oxfam in Cambodia, who states that Cambodia is still early in its critical mineral development and emphasizes the need for prioritizing community rights, environmental protections, and financial transparency before scaling up extraction efforts.

Victoria Fanggidae of The PRAKARSA stresses that banks and investors should incorporate human rights due diligence, community consent, transparent benefit-sharing systems, and credible decarbonization as preconditions for financing these projects. This reluctance to enforce rules is further illuminated by Yuki Tanabe from the Japan Center for a Sustainable Environment and Society, underlining the responsibility of major Japanese financial institutions to bolster their ESG practices in Southeast Asia's mining sector.

Joel Chester Pagulayan, Climate Justice Portfolio Manager for Oxfam Pilipinas, calls for a transformative approach from ASEAN regulators towards mandatory safeguards that uphold community rights, insist on informed consent, and promote equitable development practices across the board. On this note, Ponpakin Phruttiwongwanit from Fair Finance Thailand warns that without closing significant policy gaps, the ecosystems and communities at the frontlines of extraction will continue facing adverse consequences from decisions made without their participation.

Conclusion

FFA’s report acts as a rallying cry for a shift in the governance of critical mineral resources within the ASEAN region. The invited stakeholders must heed this call to not only enhance economic benefits but ensure that communities are empowered and ecosystems protected. In the ongoing conversation around critical minerals, it is essential to place the well-being of local communities at the heart of these developments, laying the groundwork for a more sustainable and equitable future in Southeast Asia. The full report can be accessed for further insights into these pressing issues and potential pathways towards responsible finance and trade practices.