Monday Reading Roundup: EITI, Exxon Valdez, and the Corporate Idealist

The past few days have offered up some interesting reads relating to how the extractive industries interact with society, accountability structures and environment. The topics are wide-ranging, but provide a good basis for discussion, debate, and deeper meditation on our pre-conceived notions when it comes to who/what are the goodies and baddies in the world of the extractive industries.

First up, the international secretariat for EITI has allowed Ethiopia to become a candidate country, while Yemen has once again been suspended. Human rights groups have been critical of the anti-corruption initiative’s choice to allow Ethiopia into the club due to its repressive legislation against civil society groups and track record of human rights violations. What could this mean for the future of global initiatives’ impact and their increasing dependence on membership/government buy-in?

Next up, a guest blogger on The Guardian’s Environment Blog remembers the Exxon Valdez oil spill 25 years on and asks, “what has changed since?” The spill dumped 11 million gallons of crude into arctic waters off the coast of Alaska after an oil tanker ran aground. It seems even in the wake of Deepwater Horizon, communities and federal agencies are still not prepared or equipped to work together in the face of emergency. The threat is even more real now that shipping in the arctic lanes is flourishing due to these historic warm temperatures. For those who tune out when hearing about the perils of the environment at the hands of the oil industry: Tune back in. It’s an economic story as well, just ask the fisherman and other local community members that rely on oil-free waters to sustain local economies.

And finally, on a bit of a more cheery note, Christine Baeder has published her long-awaited book, The Evolution of a Corporate Idealist: When Girl Meets Oil. Baeder’s got quite a long list of credentials, from visiting scholar and lecturer at Columbia to Human Rights Advisor to the U.N. Secretary-General’s Special Representative for business and human rights ….to former BP employee? Her unique path inside the belly of the corporate extractives beast doing Corporate Social Responsibility work at an oil giant and her time working for a major multi-lateral could have made her jaded. Instead it has made her an optimistic and positive driving force for change in the industry. She’s a Corporate Idealist. Is it possible? Can companies do ‘good’? She thinks they can with your help.

~KL

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Fuel Subsidies, Government Spending, and Sustainable Welfare Systems

Hello to all and greetings from a very sunny California. I am currently continuing my fellowship Odyssey with some time at UCLA’s Political Science department, where I have the distinct honor and pleasure to work as a researcher for Professor Michael Ross, of resource curse literature fame (his latest book here).

While here in Los Angeles, I am doing some thinking about fuel subsidies — how they’re priced, and how politics affects the way in which those prices might change over time. The project fits in nicely with the broader research agenda on resource governance, particularly thinking about how resource wealth can be used to fuel or stunt human development depending on how wealth is invested.

The project also dovetails nicely with some recent thinking I did (with many a brainstorming partner in work colleagues, academic colleagues, and friends) on the sustainability of welfare systems and intergenerational responsibility. That thought experiment was for an essay competition that I had entered, unfortunately unsuccessfully. That being said, I still think there is some value in opening up the framework I put forward for debate, particularly keeping newly resource rich countries in mind. Below find the prompt and a slightly abridged version of the essay.

The prompt for the St. Gallen Symposium essay competition:

The presumption of an altruistic relation between generations and its positive effect on the economic well-being of societies is illusionary. Welfare states have widened fiscal gaps to an irreparable extent for the next generations. When aspiring to a sustainable welfare system, how should intergenerational claims balance without having to rely on selflessness?

My slightly abridged response (with some emphasis added):

A critique of the prompt

Firstly, I reject that possibility that an altruistic relation between the generations “and its positive effect on the economic well-being of societies” is illusionary. Eschewing the role of altruism ignores studies on psycho-social drivers of human interaction, along with behavioural economics research on altruism, fairness, and reciprocity. These advancements suggest that altruistic characteristics are an important element of economic well-being in societies.[i] Drawing on Benjamin Friedman’s work on the psycho-social aspects of economic development and its effect on social policy, Haggard and Kauffman find that “Robust growth directly reduces poverty but also influences the way the disadvantaged are viewed and the way societies respond to their plight.”[ii] There is a place for altruism in sustainable welfare policy, it just may need to be viewed hand-in-hand with long term positive economic development.

Secondly, stating that “Welfare states have widened fiscal gaps to an irreparable extent for the next generations” implies that publicly funded services alone are responsible for such macroeconomic maladies. Fiscal gaps are a product of taxing less spending. To be certain, this is true of welfare spending, but it is more difficult to justify in the case of military expenditure or energy subsidies. The debt caused by fiscal gaps today are paid off in the future, so smart investments today that in part cause the fiscal gap, can also pay off this debt in the future. Investing in key human development inputs today is worth it if the debt needed to finance it isn’t too costly for future generations to repay it.

Thirdly, the implication that intergenerational claims must be at odds with welfare policy and practice today is simply wrong. I contend that if welfare policy is considered a guiding principle of a wider development agenda and a key input to economic growth, there is no reason social spending today shouldn’t incite a virtuous cycle for future generations. Human capital formation today, through investments in health, education, and a social safety net in times of severe need, benefit individuals on a personal level and eventually society at large, when these better off individuals work together.

A clear mission with flexible modalities

There are many ways in which “government policies influence the welfare of citizens.”[iii] Indeed this is at the very core of social contract theory, from Hobbes to Rousseau. So, to talk about a ‘welfare state’ as if these states have objectives that are in some way different from the purported objectives of any other state is arguably an invisible line drawn in the sand. Every decision any government makes concerns the welfare of its people.

Yet, when we talk about the “welfare states” to colleagues, friends, and family, the discussion can turn sour. The term “welfare state” has almost a negative connotation to it. Governments that focus on social spending are seen as providing “hand outs” to otherwise unmotivated or undeserving citizens. However, to view welfare policy in such a way is to limit the possibilities of how a state can capitalize on its human capital endowment as a driver of growth.

For the purposes of this essay, a “welfare state,” or more accurately, a “socially conscious state,” is defined not by the specific services it provides, but the underlying policy that guides it. It is impractical to say that specific services provided by a government, such as a particular pension or healthcare arrangement will go unchanged. That practice is unsustainable as demographics and revenue streams change over time. It is more realistic for citizens and government to have a mutual understanding of what is expected of them in terms of quality and dignity of life, while the actual services themselves can be adjusted to account for demographic shifts and citizen needs.

Further, it is important to remember that how government policy affects people goes far beyond the narrow field of ‘welfare policy’ or ‘social policy’. Haggard and Kauffman note that “Policies related to economic growth are often the most important in affecting welfare, such as property rights, macroeconomic stability, economic and trade openness, and provision of public goods.”[iv] This kind of economic decision-making has the real potential to positively or negatively affect the quality of life for current and future generations, but is not controlled by or impacted directly by welfare services delivered.

With this in mind, it is possible that less would need to be spent on traditional service delivery welfare programmes, as economic empowerment may lead to citizens’ ability to procure services for themselves. For example, research shows that people given direct, unconditional, cash transfers put that money to good use to improve their own welfare by investing in education, health, and other contributors to poverty alleviation.[v]

The opposite end of that spectrum from cash transfers, particularly in low-income resource rich countries, are energy subsidies. Too often, governments respond to pressure to quickly deliver benefits from the country’s natural resource endowments by making oil products cheaper. If welfare is an important part of development policy and a potential driver of economic growth, then other parts of government expenditure should be scrutinized for their role in contributing or stunting welfare objectives.

Artificially distorted government-engineered pricing for energy products, accounted for $480 billion USD, or .7 percent of global GDP in 2011, according to a recent IMF report.[vi] If the negative side effects of these subsidies are taken into account, like increased energy consumption and the knock on environmental effects, this figure nears almost $2 trillion. But research has found time and again that these subsidies disproportionately benefit the already wealthy and disproportionately disenfranchise the poor.[vii] While this is counter intuitive – surely cheaper oil means cheaper prices for the poor at the pump – the poorest cross section of the population uses markedly fewer kinds energy products and less of them.

Sustainable welfare means looking beyond welfare spending

Welfare policy is not a burden on the state; it is the investment that links one generation to the next. While altruistic in some respects, keeping more of the population employed, healthy, and educated, means that economies can diversify and further grow. The investment in human capital today may create debt to be paid off in the future, but it also yields a high return on investment that makes repaying that debt possible.

A welfare framework, is a sustainable investment strategy. We can achieve more today without compromising tomorrow, an embodiment of the landmark Brundtland report that has been guiding the sustainability discourse for almost as long as I have been alive.[viii] Further, doing so isn’t a selfless gift from this generation to the next. Human capital formation is good for citizens today and creates a new generation of skilled individuals whose human capital is further multiplied when they work productively together. The cycle continues for the generations that will follow them.


[i] Ernst Fehr and Klaus M. Schmidt, “Chapter 8: The economics of fairness, reciprocity, and altruism – experimental evidence and new theories.” In S. Kolm & Jean Mercier Ythier (ed.), (2006). Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier. Available at: http://www.et.vwl.uni-muenchen.de/personen/professoren/schmidt/publikationen/papers/reciprocalt.pdf

[ii] Stephan Haggard & Robert R. Kaufman (2008) Development, Democracy, and Welfare States: Latin America, East Asia, and Eastern Europe. Princeton University Press, p.355.

[iii] Stephan Haggard & Robert R. Kaufman (2008) Development, Democracy, and Welfare States: Latin America, East Asia, and Eastern Europe. Princeton University Press, p.353.

[iv] Stephan Haggard & Robert R. Kaufman (2008) Development, Democracy, and Welfare States: Latin America, East Asia, and Eastern Europe. Princeton University Press, p.353.

[v] Catherine Arnold with Tim Conway and Matthew Greenslade “Cash Transfers: Evidence Paper” (2011). DFID. Available at: http://webarchive.nationalarchives.gov.uk/+/http:/www.dfid.gov.uk/Documents/publications1/cash-transfers-evidence-paper.pdf

[vi] “Energy Subsidy Reform: Lessons and Implications” (2013) IMF. Available at: http://www.imf.org/external/np/pp/eng/2013/012813.pdf

[viii] World commission on environment and development (1987) “Our Common Future.” Available at:  http://www.un-documents.net/our-common-future.pdf

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The long road to reform: Mexico’s oil sector privatization and the challenges ahead

Readers,  

The Resource T(r)ap is pleased to have a guest contribution from Elisa Estrada Holteng. Elisa holds a bachelors degree in international relations from ITAM and a Masters in Environmental Law and Sustainable Development from SOAS. She is passionate about regulation of multinationals and the responsibilities the extractive industries have to society and the environment. The views expressed in this text are purely her own, and her own views really are quite interesting. Elisa is half Mexican and half Norwegian, a daughter of two countries with economies largely defined by the nature of their oil sectors and their (very different) state owned oil companies.  Elisa’s perspective on the privatization of the Mexican oil sector is one of a professional working in the world of hydrocarbons, as well as a concerned citizen interested in maximizing the benefit of Mexico’s natural resource endowment for the Mexican people. As always, read, comment, enjoy. If you would like to submit a guest post, contact me at Kari DOT Reports AT Gmail DOT com.

-KL

By Elisa Estrada Holteng

The recently approved Mexican energy reform alters the country’s constitution in order allow private investment into the oil sector – something that had been off limits since nationalization of the sector in 1938. While the main precept that hydrocarbon resources are the property of the nation remains, the monopolistic right of the state company, Pemex, to exploit these (and other) resources is now diluted.

Much is being said about the new energy reform and opening of the market to private actors. Some see it as the ultimate risk to the Mexican sovereignty, while others view it as a golden pot of income for a country in need. Avoiding debates about privatization, I would rather shed some light on the considerations I believe the congress should pay attention to when they’re discussing the “secondary laws” through which the reforms will be implemented. These will, in my opinion, determine if the country takes advantage of the opportunities the reform presents or fall victim to major risks and pitfalls.

One of the major opportunities the reform creates is the strengthening of the existing regulatory entities. In particular, the National Hydrocarbon Commission (CNH) has been given a new set of sharper teeth. But without any real regulatory experience, the CNH must quickly build a clear view of its goals (and a will of steel to pursue them) in order to become an effective and proactive manager of the oil sector. It should become a regulator that demands that the players prove how they will be able to carry out safe operation, in accordance with the highest international standards. CNH should be ready to clearly mandate that the utmost care and consideration is given to the Mexican citizenry and environment so that sustainable benefit prevails. These benefits reach beyond revenue from increased oil production and extend into ensuring positive developmental multipliers.

In order to support the regulation of the industry, the reforms propose the creation of the National Agency of Industrial Safety and Environmental Protection in the Hydrocarbon Sector. It is a decentralized administrative entity with managerial autonomy, which will function alongside the CNH, charged with creating the Health, Safety and Environment (HSE) regulatory framework for all the stages of operations. Given the shameful HSE track record of Pemex , the creation of such an agency should instill a national consciousness of the grave responsibility that industry has – both for their workers and for their surroundings. Hopefully this new agency will be able to set high requirements that force the industry to bring their best practices forward, with the appropriate funding and technical expertise to ensure compliance.

The reforms also create provisions for ensuring the use of national content in the supply chain. Such provisions, common throughout the world, are in theory important to support the sustainable development of a national industry. Practice has however shown that they can be complex to implement, making it either an empty exercise or even a show-stopper for globalized multi-nationals with complex procurement processes. A balance between demanding participation-percentages and making realistic and useful requests should be key to the local content agenda in order to make it a meaningful stipulation.

Most of all, the reform and the entry of private players creates an opportunity for civil society to actively participate in holding industry to account. Many oil companies have been subject to the scrutiny of consumer organizations and general civil society for years, and have in many cases had to adapt to the demands . Mexican civil society has not really had this opportunity before. It is my hope that the Mexican society, and the government as caretakers of that society, will not let the opportunity pass to become active guardians of their national patrimony.

Mozambique’s Guebeza Throws Himself a Soft Ball: Where’s the LNG?

The UN General Assembly is in session, and with it come the world’s leaders. Columbia University capitalizes on the big show with its World Leaders Forum, coaxing some of the top brass to come up from the stuffiness of midtown to the leafy collegiate walkways of Morningside Heights. Yesterday morning, President of Mozambique, Armando Emilio Guebeza, was center stage.  The topic of his address was “poverty and inclusive development in Mozambique: The 7 Million as a new paradigm for socio-economic development.”

The title of his speech was promising enough. What was “the 7 million”? Was that the number of people out of the population’s 25 million that would be pulled out of poverty with some new programme harnessing the country’s coal and LNG resources? Was this key to “inclusive development” building a middle class of 7 million? 7 million more Mozambicans connected to the electricity grid (only 12% of the population has access to date). Nope. 7 million metical — the Mozambican currency (about 230,000 USD) — for decentralized development programming. Kind of a let down.

President Guebeza methodically went through the process of how the 7 million (per Local Council) is distributed and spent. It’s inclusive. It’s participatory. It’s a distraction from the large elephant(s) in the room, like how the government plans to manage its revenues coming in from LNG, or how it plans to translate that money into meaningful development outcomes through prudent public spending.

The audience waited patiently for their turn to ask questions. The President fielded four from the audience, three quarters of which concerned the resource curse, meeting the challenge of natural resource development, and making plans for the future. While the President tried to tell one story, it was clear the audience was interested in quite another.   His response had the usual buzzwords, heralding his country’s involvement in EITI, their engagement with civil society, and their “participatory” pathway to development.  It all sounded very nice, but increased instances of violence in the country and a clamping down on the limited free press that does exist are worrying signs that all might not be as bright and cheery as the 7 million metical projects lead us to believe. All in all, it is always an honor to hear a world leader speak in person, but the awe of their presence should not be reason to accept wholesale what they’re sharing.

For every story put on the table for public scrutiny, there are bigger stories left off of it – Guebeza’s speech, with its pregnant omission of the larger issues facing Mozambique, was a missed opportunity to discuss the realities of the governance challenges he faces with a room of clever, solution-oriented, people. I am under no illusion that this would have at all been something he would’ve liked to do, but it was something he should’ve been pushed to do.

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OPM and the University of Bath Are Jointly Hiring

I’ve been really lucky to be a European Commission TAMNEAC fellow based at OPM for the past two years (1 more year to go!). The combination of working in a development consultancy with a TAMNEAC mission of doing applied natural resource/conflict-related research has really brought an entirely new element to my more academic work for my doctoral studies. Here’s another great opportunity for someone out there that partners OPM with a fantastic academic institution. This is what I was sent regarding the position:

I would like to invite applications for a Development Policy Impact Analyst, which will be a new KTP Associate.  This Associate position is a two-year collaboration between OPM and the University of Bath, to develop and implement protocols and procedures for conducting methodologically diverse, integrated, robust and policy-relevant research and evaluation in developing countries.  The role is full-time and based in our Oxford office, but the successful individual would be employed by the University of Bath.

A full job description can be found at http://tinyurl.com/p7xntem.  To apply, please quote MM1950 and request an application form and job description from the Human Resources Department, University of Bath, Claverton Down, Bath, BA2 7AY (email jobs@bath.ac.uk). Alternatively, please telephone the 24 hour answer-phone service on 01225 386924, textphone 01225 386039, or apply online at http://tinyurl.com/p7xntem

The closing date is 25 October 2013

Get involved, people!

RWI Looks to hire a program manager for Myanmar

The lovely people at Revenue Watch are embarking on a new chapter of their work…in Myanmar! They need some great people on the ground to get this thing going and it would be a fantastic opportunity for some special person(s). While the deadline might be tight, there may be some wiggle room for the right candidate, so don’t let that stop you from getting in touch if this is the job made for you!

This is what Suneeta Kaimal, Deputy Director of RWI, wrote in an e-mail regarding the post:

Dear colleagues,

 I am writing to update you on our engagement in Myanmar, ramping up starting this September, and to ask for your assistance to identify possible candidates for two new related positions: a full-timeMyanmar Program Manager to be based in Yangon and a Myanmar Program Finance and Administrative Assistant.  We appreciate your help to circulate these job postings and identify appropriate candidates.

 Our two-year program is funded by the UK Department for International Development (DfID) and Australian Aid (AusAID) to support local civil society to improve extractives governance, including through participation in and implementation of EITI. Activities will be implemented directly by RWI, in collaboration with local civil society organizations, and through RWI grants to local civil society partners. Different groups will lead on activities as appropriate. The program will emphasize EITI as an entry point and tool for broader policy reforms and includes the following dimensions:

 Ø  Providing technical assistance as needed, RWI will support outreach, awareness-raising and capacity building on EITI led by local civil society partners (including for example Paung Ku, Pyoe Pin, and Spectrum) and the Myanmar Development Research Institute (MDRI) as the coordinating body for EITI in Myanmar.

 Ø  RWI will provide financial and technical support partner organizations to conduct research and build an evidence base from which civil society can identify and articulate reform priorities. Some of this research is being led by RWI itself; others will be conducted by local groups, identified through a forthcoming call for proposals.

Ø  RWI will be more directly involved in delivering advanced trainings for identified key civil society actors/leaders on getting the most out of EITI implementation and beyond (linking with key issues identified like decision to extract and revenue management/sharing, etc.). These in-country or regional advanced trainings can be considered as “Training of Trainers”, as it is expected that the key civil society representatives identified as participants will contribute (with knowledge and skills acquired through the training) to awareness raising and building capacities in their constituencies and communities.

Ø  These outreach efforts and trainings will support networking and coalition building within civil society. RWI will support and strengthen the existing mobilization efforts and networks, led and structured by local groups, in particular through the facilitation of an annual civil society forum on EITI(always considered as an entry point and tool for broader policy reforms). 

Ø  The policy agenda of the local civil society groups and coalition will be bolstered by building capacities of and strengthening networks for communication with parliamentarians, so as to link civil society objectives with legislative decision-making, which is key for the broader political dimension of the EITI process. Similar focus will be given to media outreach and capacity-building. Finally to build buy-in and sustainability at the local level, the programme will aim at demonstrating the value of multi-stakeholder and transparency processes through specific programming aimed at subnational policy priorities (and other initiatives to be designed), once the groundwork has been set by the above-mentioned awareness raising and capacity building efforts.

The RWI Myanmar Program will also facilitate participants from Myanmar civil society to attend workshops and trainings as part of our USAID-Indonesia funded program, A Southeast Asian Partnership for Better Governance in the Extractive Industries (IKAT-US: http://www.revenuewatch.org/ikat-us). This will allow Myanmar civil society to share experiences with its regional counterparts (especially organizations engaged in national EITI processes in Indonesia, the Philippines and Timor Leste) and to engage further with the existing regional civil society network working on extractive industries governance issues.

In parallel, RWI will provide technical advice on key sector issues as requested, including exploring the possibility of an assessment exercise using the Natural Resource Charter.

If you have any questions about the program, please don’t hesitate to be in touch with Erica or Matthieu, who are leading on this work. I am also attaching here two overviews of the program and our forthcoming grants opportunity.

Best,

Suneeta

 

Jonathan Berman Talks #SuccessInAfrica

Last night, the Vale Columbia Center and the Columbia Business School hosted an event for Jonathan Berman’s new book “Success in Africa: CEO Insights from a Continent on the Rise.”

The author, a former Asia hand and New York native, opened the discussion with how he came to focus on Africa. Being an American who lived in Hong Kong and is now working in and on Africa (mainly Nigeria), I was happy to hear someone else go through the paces that I regularly do to explain their work in an area that ostensibly doesn’t concern them at all. Berman articulated well what sometimes fails me when asked why I (or what right do I have to) study Africa.

The response is simple; it is not a remaining vestige of colonialism or any other mode of perceived superiority that brings me and others like me from the “outside” to study Africa’s growth and development. It is the desire to bear witness to the frontier of innovation, opportunity, and well, “success” redefined on an unimaginable scale. Berman pointed to many others who have had a similar trajectory of spending time in Asia, seeing what break-neck speed growth looks like, and being captivated by all that comes with it. While it may not be possible to put a precise finger on it, Berman says, once you’ve seen things moving fast, you can spot it anywhere. Africa, as a continent, is moving fast.

Personal narrative aside, Berman’s motivation for the book, in part, is to rectify something I am surprised by almost daily. He said of his time travelling around Africa and observing incredible opportunity, “I was living in a parallel world.” He realized that a story that had come to be so familiar to him was virtually unknown upon touching back down in Europe or the U.S. “There was explosive growth, but almost no one knows that story.”

His three main takeaways from the book:

- Africa is a place of extraordinary opportunity,

-Africans built that opportunity more than anyone else,

-And for international firms in Africa, there is opportunity to achieve significant wealth as well as social wealth and capital.

Berman’s discussion of African moguls making their mark on the continent was a catalyst for a multivariate discussion covering innovation, governance, politics, corruption, and more. His fellow panelists, Antonio Pedro from UNECA and Columbia Business Professor Paul Tierney Jr., picked up on some of these themes and threw further threads out there for discussion. Some recurring topics emerged:

Firstly, the major buzz-country was Nigeria. From powerhouse CEOs like Nigeria’s own Dangote to an economy that will soon eclipse South Africa as the continent’s largest, panelists could not keep away from Africa’s most populated country (if you didn’t know, about 1 in 5 Africans is Nigerian).

Secondly, the major buzz-sector was commodities (with a focus on oil gas and mining). Of course, as someone who studies and advises on natural resource development, I was excited to hear so much attention directed to an area that is unmistakably the major driver of many countries’ growth stories. That being said, I didn’t necessarily agree with some of the panelists’ sanguine view of the effect of the sector on development.

Thirdly, we are still talking about “China.” A lot.  From China’s investments on the continent to questions about euphemistic “competitive advantage” in bidding for contracts, the phenomenon that is “China in Africa” has not died down with this group. Not that the focus is a red herring, but I did appreciate Berman’s indication that it may not be China’s way of doing business that gets them in the door, its their willingness to give it a go (compared to more skittish American firms that fear investment uncertainty).

What I felt was missing from the discussion overall was the persistent and severe wealth discrepancy across the continent. Some may be having success, and yes there is the potential for that to translate to more inclusive growth, but that has yet to be realized. One trip from the airport in Lagos out to the McMansions of Lekki or the smart flats in Victoria Island highlights that it is not Africa succeeding, but a very select some in Africa succeeding. A “middle class” increasing its consumption of manufactured goods, to which Tierney referred, seems to be more of an aspiration than a reality. Ultimately, making the link between economic growth and human development is still an elusive task tied up in governance challenges. While Pedro says governance in Africa is improving, I have to wonder if it is only the kinds of governance mechanisms associated with attracting and keeping investment.

5 Steps to bringing the NRC to life

The Natural Resource Charter has had a big year. They’ve merged with Revenue Watch, held their annual conference in Kuwait, and are gearing up to engage with some new producer countries that are facing an unfamiliar set of challenges. But despite the visibility, there are still a lot of questions about how to translate the 12 precepts of natural resource development good practice into context-specific policy reform.

A new Briefing Note tries to address some of those questions by highlighting the lessons learned when systematically “implementing” the NRC in Nigeria. The Briefing Note, Bringing the Natural Resource Charter to life,explains the five key steps that Oxford Policy Management took to apply the Charter to Nigeria’s oil and gas sector as part of an initial benchmarking exercise:

Step 1: Developing the benchmarking questionnaire – Break down the 12 precepts into more specific sub-sections (and sub-sections of sub-sections) so that context-specific evidence can be gathered.

Step 2: Mobilising influential stakeholders to support the NNRC – Corral the top experts from civil society and the public and private sectors to shape the debate and score the country along the detailed questionnaire.

Step 3: Researching and analysing the evidence – Create a cohesive and reliable evidence base through local research institutions.

Step 4: Building consensus on the framework and final benchmarking report – Listen and incorporate the wide array of stakeholder perspectives into the process and final product to secure legitimacy.

Step 5: Operationalising the Charter – Use the benchmarking exercise to help set policy priorities and identify ripe opportunities for reform.

Lessons learned from the process ranged from the need to disaggregate and carefully formulate questions around the 12 precepts to avoid duplication to the importance of working in partnership with stakeholders.

My original post can be found on Goxi.org.

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World Politics Review does extractives

It’s always nice when two worlds collide and this morning’s news scan was certainly one of those times. My former employer (and where I cut my teeth on thinking about development and extractives), World Politics Review, published a feature entitled Breaking Ground: Policy Challenges of Extractive Industries. A quick scroll down the contributor list brings up some familiar faces, including none other than Lisa Sachs, Director of Vale Columbia Center on Sustainable International Investment (based at Columbia University), and where I am currently a visiting fellow.

What the authors are up to:

Sachs talks strategy in her piece On Solid Ground: Toward Effective Resource-Based Development. It’s not a buzzword, people. Strategy means thinking beyond time-bound political cycles and thinking about resource extraction holistically. What do you want for your nation as a whole and in the future, how can this subsoil asset help you get there, and what are the negative externalities of this activity that need to be mitigated? While the need for strategy is clear, the challenges Sachs lays out will make you understand why it is easier said than done.

Zarsky’s piece Sustaining Development: Extractive Industries and Local Communities hones in on the challenges of local impact. While context specificity is key in managing resource development, Zarsky finds some commonalities in many new producers:

Whether in Africa or Latin America—or, indeed, Mongolia, Australia and North America—local grievances are strikingly similar:

- Governments approve mining projects without the consent and sometimes without even the knowledge of local, often indigenous, communities.
- Mining companies pollute and deplete natural resources, and governments do little to stop them.
- Jobs and other local economic benefits are meager and short-lived.
- Local people are displaced, sometimes against their will and often with inadequate relocation arrangements.
- Competition for scarce jobs creates deep and long-lasting social conflicts.

and the trio that is Le Billion, Rustad, and Lujala contributed Challenging the Peace: Valuable Natural Resources and Peacebuilding. In it, they accept the bi-directional complex relationship between resource exploitation and conflict and move past it to think more proactively about what can be done to mitigate these multivariate conflict risks. In so doing, the authors identify a further set of obstacles to achieving what they suggest as they way forward for conflict mitigation.

The theme of the feature is “Policy Challenges” and it is aptly named. All three pieces highlight the massive uphill battle ahead for policy reformers and a concerned international community. While there are commonalities in problems across the extractive industries, there are certainly no corollary common solutions; maybe just some lessons learned. The challenges outlined in this feature should push the proactive to be thinking about context-specific solutions on a country-level that, from the beginning, consider the political economy of the places in which extractives loom large as a tap for wealth or trap.

Wetin happen for the remaining three?

Wetin happen to the remaining three?

A clever (and hilarious) piece of advocacy from the folks at the Nigerian Natural Resource Charter.

The group, a collection of some pretty heavy hitting Nigerian oil and gas experts, got together to score Nigeria against international best practice for natural resource governance. Turns out, Nigeria’s got a long way before it can get the green light. (You can find the report here: http://nigerianrc.org/content/nnrc-benchmarking-exercise-report )

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