Guiding Principles for Durable Extractive Contracts
The Guiding Principles for Durable Extractive Contracts (the Guiding Principles) provide guidance on how resource projects can be developed to reflect the balance of risks and rewards that underpins durable contracts, while also taking into due account community interests and concerns since the very beginning. The Guiding Principles offer a blueprint for the content and negotiation of durable extractive contracts that can reduce the drivers of renegotiation and can provide adaptive and flexible provisions that, for example, can automatically adjust to prevailing market conditions. They also aim to assist host governments and investors in explaining the content of the contract to the public, thereby helping to overcome tensions between stakeholders.
The Guiding Principles set out eight principles and supporting commentary that host governments and investors can use as a common reference for future negotiations of enduring, sustainable and mutually beneficial extractive contracts, in line with the mandate received from the member countries of the Governing Board of the OECD Development Centre at its Fourth High Level Meeting on 3 October 2017.
The Guiding Principles are an output of the OECD Policy Dialogue on Natural Resource-based Development’s Work Stream 3 on “Getting Better Deals”.
The finalised version document reflects the outcomes of an open, intense, enriching four-year multi-stakeholder consultation process. The OECD Development Centre would like to express its deep appreciation and gratitude to all those who have inspired and contributed to this collective achievement, by engaging in good faith discussions and by contributing with relentless efforts to this complex, but highly rewarding exercise.
Participants in the Twelfth Plenary Meeting of the Policy Dialogue on Natural Resource-based Development held on 20-21 June 2019 at the OECD in Paris strongly welcomed and endorsed the Guiding Principles, emphasising their great value-added and the timeliness of their finalisation to support the implementation of the new EITI requirement for contractual disclosure from 2020 and to reduce instances of investor-state arbitration.
Negotiations support providers, such as CONNEX, the African Legal Support Facility and the Commonwealth Secretariat, pledged to utilise the Guiding Principles in their ongoing support and programmes in developing countries, and recognised how these principles can reduce the asymmetry of information and can build the capacity of governments in negotiating contracts.
The OECD Development Centre will submit the Guiding Principles for consideration and possible endorsement by the Governing Board of the OECD Development Centre in the fall of 2019. The OECD Development Centre will also leverage the existing collaboration with regional organisations to foster uptake and ownership at the country-level.