Search Results

Civil society organizations have played various roles in promoting the capture of benefits from and protection against the negative impacts of extractive industries. Payment disclosure is one potentially powerful tool for such organizations to promote greater local benefit capture. Practitioners and academics have noted, however, that transparency alone does not equate to accountability. This is true in the extractive sectors, where political dynamics pose serious obstacles. The cases of Ghana and Peru provide examples of these dynamics. Strategies for overcoming them include strengthening the technical capacity of civil society organizations, providing civic education, targeting interventions better, and learning more deeply from positive examples.

Recognizing that women’s participation is necessary for the achievement of sustainable development, extractives industry companies are increasingly committed to integrating gender equality and women’s economic empowerment into aspects of their operations. This chapter reviews recent literature on gender and the extractive industries and considers the following questions emerging from the scholarship. How is gender understood in the extractives sector and has this changed over time? What are the gendered impacts of the extractive industries? Are women passive victims of the sector rather than active participants or even resisters to industrial expansion? What is the nature of extractives-associated sex work and gender-based violence in various settings? In addition, the chapter evaluates industry efforts towards achieving improved gender balance in the sector.

Local content policies for extractive industries have attracted increased interest. Local content requirements are often included in legislation or contracts. Such efforts may be constrained by low capacity of potential suppliers, low skills, and the general business environment. A number of extractive industry companies have introduced supplier development programmes that attempt to reduce the constraints and skill gaps. Government industrial policies on local content vary: some prescribe quantitative targets for local content, while others focus on improving skills and raising the capacity of domestic industry. Infrastructure built for extractive industries can often be used by other economic activities. Difficulties in finding suitable financing arrangements have, however, limited the number of successful multi-user extractive industry-related infrastructure projects.

This chapter synthesizes findings from Bolivia, Ghana, Peru, and Zambia. It concludes that political settlements influence the relationships between resource-dependent economies and patterns of social inclusion. However, neither authoritarian, dominant leader forms of politics, nor competitive democratic politics has fostered significant economic diversification or reduced levels of resource dependence. The extractive economy does, however, influence the dynamics of national political settlements. The rents that resource extraction makes possible, and the high cost of engaging in extractive industries, induce asymmetries and create incentives for political exclusion. Colonial and post-colonial histories of resource extraction give political valence to ideas that have helped mobilize actors who have challenged relations of power and institutional arrangements. The materiality of subsoil resources has direct implications for subnational forms of holding power that can influence resource access and control. Mineral and hydrocarbon economies bring both transnational and local political actors into the constitution of national political settlements.

This chapter provides an overview of social and environmental performance and management practices in the oil and gas industries, outlining the evolution of international companies’ approaches over the last twenty years within the wider extractive industries context. The chapter reviews what social and environmental management amongst such companies means in practice, and highlights some of the unresolved issues emerging. While most companies now model their approach to social and environmental management on international norms, they face a variety of drivers to their practices. These range from complying with international standards in order to gain access to finance, to complying with new host country legislation and regulation, and gaining and maintaining a good reputation and a ‘social licence to operate’. This chapter argues that the complexity of these drivers problematizes the portrayal of the industry’s social and environmental performance as ‘voluntary’ corporate social responsibility, and renders the latter term somewhat misleading.

In recent years, Mozambique has made international headlines for the significant hydrocarbon deposits found offshore. These have increased the country’s extractive resource endowments, in addition to its mining and onshore natural gas sector. It is expected that these industries will contribute to economic diversification and social development, not least by means of procuring locally produced goods and services and hiring Mozambicans. A key factor to achieve this is building domestic capital—in people, institutions, and infrastructure. Looking at the policy environment, this chapter argues that the prospects are extremely challenging for ‘local content’ to provide the link between the extractive industries and the economic diversification of the local economy. The country needs institutional changes that support broader and rural-focused private sector development.

Tanzania is rich with natural resources, which have significant potential to contribute to the country’s economic development. Several laws recently passed in Tanzania are dedicated to establishing linkages between foreign firms in natural resource extraction and the local economy. This chapter documents this legislation and the institutions set up to enforce and monitor these laws. Effectiveness of local content legislation and the potential for firms in the mining sector to contribute to local development are then evaluated using a combination of qualitative and quantitative evidence. The chapter next uses existing data to explore trends in local content and the estimate the value of local content in the mining sector; this exercise highlights the need for improved data. We then examine other developing countries’ experiences with local content legislation, drawing lessons for Tanzania.

Countries face both challenges and opportunities in using their extractive industries to achieve more inclusive development—particularly in the developing world. Extractive industries have shaped economies, societies, and politics of nations—for good and bad. Today’s wealthiest nations owe a part of their high living standards to the extractive industries. Yet while a large national income can result from resource wealth, it can also be associated with acute social inequality and deep poverty—the polar opposite of inclusive development. Many developing countries struggle to diversify their economies, and create redistributive fiscal systems, in ways that reduce poverty, inequality, and social division. The very worst cases see violent conflict and civil war. The expression ‘resource curse’ has in turn become common coin. This chapter lays out the framework of the book for the reader, and describes the motive and contribution of the individual chapters to the narrative thread woven throughout.

Industrial policy is back. Advocates for industrial policy argue that the important question is not whether such policies should be applied at all, but how to design and implement them. This chapter explores the new debate on industrial policy in relation to the extractive industries and the extractives-led development agenda. First, there is the argument that host countries should reduce their dependence on the extractive resources sector and diversify their economies. But there is little consensus over how countries should go about this. Second, the universal climate agreement reached at the Paris COP21 in November 2015 mandates that all economies have to move towards more sustainable and resource-efficient growth, with (green) industrial policy playing a critical part in achieving this structural transformation. Third, the liberal capitalist system underpinning the current global economy is under pressure with some political forces now making the case for more inward-looking economic policies and protectionism.

Natural resources extraction inevitably imposes environmental damage including diversion of scarce water away from pressing local needs, disruption of fragile ecosystems, and longer-range and often irreparable harm. These fall most forcefully on the local populations at or near the extraction sites but also beyond. Effective regulation of extractive industries is critical to balance immediate needs with longer-term considerations. Unfortunately, much extraction takes place in countries with weak institutions and poor success rates in addressing any of their environmental challenges and often rampant corruption undercutting fair application of rules. This chapter concludes that improving practices requires a long and sustained commitment from everyone involved—the countries and industry.