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91. Consent within Consultation: Incorporating New Business Practices in the Extraction Industry

Author:
Luke Sauer, Jaclynn Chiodini, and Christine Duong
Publication Date:
07-2015
Content Type:
Policy Brief
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
Indigenous peoples within Canada and worldwide have the right to provide, withhold and/or withdraw consent to developments on their territories. The authors of this brief argue that with free, prior and informed consent (FPIC) becoming the new business standard when negotiating access to land and resources, industry leaders must adapt their practices to better accommodate indigenous rights. The authors recommend that the extractive industry should implement FPIC to the new business environment established by international rights frameworks and Canadian case law; negotiators should be trained in indigenous rights to FPIC, emphasizing the unique world views and concepts of land and resource stewardship; and the government should create policies that harmonize the duty to consult with the principles of FPIC to ensure good governance and stable business environments.
Topic:
Energy Policy, Environment, and Natural Resources
Political Geography:
Global Focus

92. Answering Questions About the Commodity Slump: A Summary from the 2015 NRGI Conference

Author:
David Manley
Publication Date:
10-2015
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
There has rarely been as large a commodity boom, with such resounding effects, as the one that has recently ended. Policy makers and commentators saw the boom as an opportunity to pull hundreds of millions of people out of poverty. But, after the crash of commodity prices, one might ask whether this opportunity been largely missed. Policymakers and citizens of resource-rich countries should draw lessons from the experience and ascertain what risks and opportunities they now face in a period of depressed prices. To contribute to this thinking, NRGI gathered more than 180 experts for two days of discussion at St. Catherine’s College, Oxford, in June 2015. Key questions addressed in this conference summary paper include: Were countries prepared for the bust? Was a lack of accountability and transparency really to blame for countries’ poor resource governance efforts? How can transparency be more useful? Has the price slump closed the door on new investment? Is there a “race to the bottom” to stem capital flight? Can we turn the crisis into an opportunity?
Topic:
Development, International Trade and Finance, Oil, Poverty, Natural Resources, and Financial Crisis
Political Geography:
Global Focus

93. In Pursuit of Transparent Trading

Publication Date:
10-2015
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Commodity trading and the activities of trading companies influence economic and governance outcomes in developing countries. Typically privately owned with flexible business models, many trading companies work extensively in “high-risk” environments – including countries with weak institutions, conflicts or other challenges that scare away more risk-averse companies. Given the size of this footprint, and its prevalence in countries with high levels of corruption or poverty (or both), the quality of trading companies’ business practices is of serious concern. Trading companies play several roles through which they influence public institutions and public revenues, and they frequently build close relationships with top officials and political elites. They are major buyers of raw materials sold by governments and state-owned companies worldwide, and these transactions generate significant public revenues. Traders also provide large loans to governments, sell refined products, and enter into joint ventures with state-owned entities. They are expanding their upstream and downstream operations in developing countries as well.
Topic:
Economics, International Trade and Finance, Natural Resources, and Governance
Political Geography:
Global Focus

94. Owning Up: Options for Disclosing the Identities of Beneficial Owners of Extractive Companies

Author:
Aaron Sayne, Erica Westenberg, and Amir Shafaie
Publication Date:
08-2015
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Global interest in ownership transparency is growing, with the G8 adopting principles on beneficial ownership; a dozen EITI countries participating in a beneficial ownership pilot; and the US, UK and EU taking steps toward making more beneficial ownership information available. The aim of such initiatives is to shed light on secret ownership structures that enable some extractive companies to evade tax payments or hide improper relationships with government officials. While a complex and opaque ownership structure is no sure sign that an extractives company is engaging in financial misconduct, the publication of beneficial ownership information can help to deter improper practices and enable detection. This briefing explores options open to countries for collecting, publishing and using information on the beneficial owners of oil, gas and mining companies. It provides background on how beneficial ownership works in the extractive industries and why it matters. The briefing also offers governments, companies and civil society members a framework for deciding what information to publish, and considers the critical question of what more disclosure could realistically achieve.
Topic:
Industrial Policy, International Cooperation, International Trade and Finance, Oil, and Natural Resources
Political Geography:
Global Focus

95. From Reporting to Reform: Eleven Opportunities for Increasing EITI Impacts

Author:
Max George-Wagner and Erica Westenberg
Publication Date:
06-2015
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Under the EITI Standard, implementing countries are required to produce far more comprehensive reports than before; these go beyond revenue payments to include disclosures across the entire extractive industries decision chain. However, the objective of the Standard is not merely to generate more data, but rather that stakeholders will use the information to impact the governance of the sector. This EITI briefing note explores how countries are faring at meeting the EITI’s more ambitious requirements and what implementing countries can do to begin moving “from reporting to reform.” This briefing note is based on a review of the first 22 reports produced under the Standard; the review assesses both the quality of reporting, as well as the content. We found that in many respects countries have risen to the challenge and become more ambitious and comprehensive in their reporting. This has included highlighting critical deficiencies in license allocation processes, revealing politically affiliated owners of companies, and identifying significant local revenues that were never disbursed. However, a number of significant gaps remain and these are holding countries back from seeing meaningful impacts from their EITI processes. For instance, these reports have missed opportunities to inform major tax code revisions, ignored hotly debated issues of sector employment, and left stakeholders in the dark about individual extractive projects.
Topic:
Economics, Industrial Policy, Intelligence, Natural Resources, and Governance
Political Geography:
Global Focus

96. NRGI Readers: A Primer Series About Resource Governance

Publication Date:
04-2015
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
NRGI has created a series of short, illustrated overviews of key topics in NRGI's portfolio of work. Together they serve as a robust introduction for the lay reader to fundamental issues and concepts in resource governance. Most contain helpful figures and infographics, and each reader has a standard format: key messages, key concepts and case examples, and a final set of practitioner-orientated questions to ask. Each topic is explicitly linked to the relevant precepts of the Natural Resource Charter.
Topic:
Economics, Industrial Policy, Oil, Natural Resources, and Governance
Political Geography:
Global Focus

97. Parliamentary Briefing: Fiscal Regimes

Author:
Natural Resource Governance Institute
Publication Date:
03-2015
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
A fiscal regime is the set of instruments (e.g., taxes, royalties, dividends) that determines how the often-vast sums of funds generated by oil, gas and mining projects are shared between the state and investors. Fiscal instruments are generally set by legislation or specific contracts and can vary significantly from one extractive project to another. In addition, the way in which royalty and taxes are applied can also have a significant effect on the actual size of the revenues that are collected. This factsheet provides an introduction to the different elements of a fiscal regime and suggests various questions and strategies members of parliament can follow for establishing effective fiscal policies and conducting oversight.
Topic:
Natural Resources, Tax Systems, Fiscal Policy, and Revenue Management
Political Geography:
Global Focus

98. Cyclically Adjusted Current Account Balances

Author:
Jane Haltmaier
Publication Date:
12-2014
Content Type:
Commentary and Analysis
Institution:
Board of Governors of the Federal Reserve System
Abstract:
The Great Financial Crisis coincided with a sizable reduction in global external imbalances, defined as the absolute value of the sum of individual country current account surpluses and deficits relative to global GDP. Although current account balances should not respond to a downturn that is uniform across countries, one that hits countries with current account deficits harder than those with surpluses might result in a decline in the global balance. This paper quantifies the cyclical portion of the current account balance for 35 countries using estimates of the severity of the cycle in each country relative to that of its trading partners in conjunction with three estimates of the sensitivity of the current account balance to changes in the output gap. Two of the estimates are derived from equations linking trade to income and the third is derived from the relationship between changes in current account balances and changes in output gap differentials. The main result is that the bulk of the reduction in the global current account imbalance since 2006 appears to have been structural. Cyclical forces are estimated to account for between 10 and 30 percent of the decline. In the aggregate, the cyclical effect is estimated to be currently holding down the global current account balance by about 1/2 percentage point. However, the size of the cyclical effect is more substantial for some countries. Both surplus and deficit countries have contributed to the decline in the absolute value of the global current account imbalance, but the contribution of the deficit countries is about twice as large as that of the surplus countries. Changes in oil prices have had largely offsetting effects on the global current account balance, but changes in real exchange rates in recent years have contributed to the reduction.
Topic:
Economics, Energy Policy, Oil, Natural Resources, Financial Crisis, GDP, Exchange Rate Policy, and Trade
Political Geography:
Global Focus

99. Natural Resource Governance: An In-Depth Subfield Mapping and Analysis

Author:
Leila Kazemi
Publication Date:
03-2014
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Since its incipient stages in the early 2000s, the field of natural resource governance (NRG) has greatly evolved and expanded, with new actors, approaches and target issues proliferating in recent years. Focusing on a core group of organizations working on NRG, this brief maps and analyzes their work with an eye to identifying and detailing areas of overlap and potential synergy to inform programming, strategy and priorities moving forward. At the organizational level, it examines how and why organizations focus their work in particular ways, the tools and strategies they deploy, and their self-perceived comparative advantages. At field level, this brief investigates the perceived collective impacts of NRG efforts thus far, emerging priority areas, and gaps across work that has been done to date. Throughout, particular attention is given to how the Revenue Watch Institute carries out its work and is situated in the field.
Topic:
Corruption, Natural Resources, Governance, and Accountability
Political Geography:
Global Focus

100. Natural Resource Charter (2nd ed.)

Author:
Natural Resource Governance Institute
Publication Date:
06-2014
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
The Natural Resource Charter is a set of principles to guide governments' and societies' use of natural resources so these economic opportunities result in maximum and sustained returns for a country's citizens. It outlines tools and policy options designed to avoid the mismanagement of diminishing natural riches, and ensure their ongoing benefits. The charter is organized around 12 core precepts offering guidance on key decisions governments face, beginning with whether to extract resources and ending with how generated revenue can produce maximum good for citizens. First launched in 2010 at the annual meetings of the International Monetary Fund and the World Bank, the charter was written by an independent group of practitioners and academics, under the governance of an oversight board composed of distinguished international figures with first-hand experience of the challenges faced by resource-rich countries. It relaunched at the 2014 Natural Resource Charter Conference in Oxford, England.
Topic:
Oil, Natural Resources, Business, Tax Systems, Mining, Revenue Management, and Licensing
Political Geography:
Global Focus