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Eighth Meeting of the PD-NR, 15-16 June 2017

 

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Eighth Meeting of the PD-NR, 15-16 June 2017

Agenda  | List of Participants

 

Key Outcomes

Under the co-chairmanship of Chile, Germany, Guinea, Kazakhstan, Liberia, Norway, and the United Kingdom, 19 government delegations from Africa, Asia, Europe, and Latin America, as well as representatives from 9 partner international organisations and institutions, and 29 major firms, industry associations, civil society organisations, academia, law firms and think tanks convened at the OECD on 15-16 June 2017 for the Eighth Plenary Meeting of the Policy Dialogue on Natural Resource Development. International organisations in attendance included representatives from the African Minerals Development Centre, the African Development Bank, including its African Legal Support Facility, the Commonwealth Secretariat, the European Union Commission, and the UN Conference on Trade and Development (UNCTAD). 

 

Work Stream 1 – Shared Value Creation and Local Development

Participants discussed and validated three new examples for inclusion in the on-line Compendium of Practices, with a focus on integration of renewable energy into extractive projects. The three projects, including thermal solar in oil extraction and on- and off-grid renewable energy in mining, were driven primarily by efficiency needs – freeing natural gas for other uses, increasing the stability of off-grid supply, and lowering overall power generation costs. The “first of their kind” nature of the three projects, and their specific environment and infrastructure contexts created a learning curve for governments and necessitated bespoke approaches to ensure commercial viability. Participants discussed the complex interplay between power grid systems necessary to enhance the penetration of renewable energy, and the technical and regulatory measures that governments can take to close the risk gap for innovative projects. Participants also discussed how innovation in renewable energy, electrical vehicles and autonomous vehicles will support increased demand for copper, lithium, nickel, magnesium and cobalt. Going forward, the Compendium will continue to be expanded with new examples.

 

Work Stream 2 – Revenue Spending and Natural Resource Funds

Participants discussed the advantages and disadvantages of earmarking practices as a possible mechanism to support the achievement of development objectives. Participants concluded that the effectiveness of earmarking is mixed at best, and in some cases, highly negative, as it can constrain budgetary flexibility, lead to inefficiency, and over or underinvestment in certain public services. Additionally, it also encourages procyclicality of public expenditure. Rather, investing in investment requires a strategic vision and policy that inform spending and investment decisions, preceded by a commitment to sound and consistent macroeconomic management of natural resource revenues.  

 

Work Stream 3 – Getting Better Deals

Participants welcomed the expanded set of Guiding Principles for Durable Extractive Contracts. The Guiding Principles can be used as a common reference for future negotiations of enduring, sustainable and mutually beneficial extractive contracts and can lessen the need for renegotiation of contract terms over time. The Guiding Principles will be further refined following the contributions made by participants during the Plenary. Participants further discussed the role of model contracts in helping host governments to form coherent negotiating positions, improve efficiency, reduce cost, and provide leverage during negotiations. The process of developing a model contract can reveal gaps in domestic legislation. In order to fill any identified gaps, the incorporation by reference of relevant non-binding international standards was regarded as an option, but participants recommended using such standards as a benchmark for national law making of general application to avoid disparity of treatment within a country and challenges in monitoring compliance.

 

Work Stream 4 – Domestic Resource Mobilisation (tackling BEPS and corruption)

Participants welcomed progress made with the joint OECD – Intergovernmental Forum on Mining, Minerals and Metals (IGF) initiative addressing high-priority tax base erosion issues facing many developing countries in raising revenue from their mining sectors. Priority issues for immediate work are on excessive interest deductions; the design and use of tax incentives for mining investment; mineral product pricing for products with opaque markets; strengthening mineral testing and verification practices; and the use of stabilisation clauses in investment treaties. Participants noted the recent delivery of a transfer pricing risk assessment toolkit for the mining industry by GIZ, NRGI, and the African Tax Administration Forum (ATAF), and the release of the toolkit on mineral product pricing that has been the subject of extensive consultation within the Policy Dialogue. Production entitlements often account more than taxes in producing countries. Participants recognised the importance of improving common understanding, possible approaches, and benefits of transparency in commodities trading-related payments to reduce corruption risks and opacity in the selection of buyers, negotiation of contract terms, transfer of revenues, and to enhance governments’ accountability in the use of the sales proceeds. 

 

 Presentations

DAY 1 -  CONNEX Multi-stakeholder Negotiation Support Forum

Welcoming remarks by:

H.E. Pierre Duquesne, Ambassador and Permanent Representative of the Republic of France to the OECD, and chair of the Governing Board of the Development Centre (in French)

Mr. Günter Nooke, Personal Representative of the German Chancellor for Africa, Federal Ministry for Economic Cooperation and Development (BMZ)

Session 1 - Structuring extractive contracts for the long term: Guiding Principles for Durable Extractive Contracts

Guiding Principle VIII by Dr. Carole Nakhle, Chief Executive Officer, Crystol Energy

Session 2 - The role of model contracts in complex extractive contract negotiations: sharing experience on their use in actual negotiations

The Model Contracts: the Liberian Experience by Hon. Sam Russ, Deputy Minister for Operations, Ministry of Lands, Mines and Energy of Liberia

Closing remarks by:

Mr. Günter Nooke, Personal Representative of the German Chancellor for Africa, Federal Ministry for Economic Cooperation and Development (BMZ)

 

DAY 2 -  Multi-Stakeholder Plenary Meeting

Welcoming remarks by:

H.E. Pierre Duquesne, Ambassador and Permanent Representative of the Republic of France to the OECD, and chair of the Governing Board of the Development Centre (in French)

Session 4 - Compendium of Practices: Operationalising Framework on Collaborative Strategies for In-Country Shared Value Creation: focus on innovation and shared power infrastructure

How can mining catalyse bold deployment of solar energy? by Ms. Louise Vickery, Senior Programme Manager, Energy Efficiency Renewable Energy Integration, International Energy Agency, seconded from Australian Renewable Energy Agency

DeGrussa Solar Project Knowledge Sharing Report by the Australian Renewable Energy Agency

DeGrussa Solar Hybrid Project Essential Information by NEOEN Renewing Energy

An Introduction to Arena's Remote and Regional Projects by the Australian Renewable Energy Agency

Session 4 (continued) - Shared power infrastructure, renewable energy, and the impact of innovation in the extractive sector

Innovation and shared power: sharing practices for discussion and validation by Mr. Carlos Finat, Executive Director, Chilean Association of Non-Conventional Renewable Energies

How technology is reshaping supply and demand for natural resources by Ms. Rebecca Ross, Associate Partner, McKinsey

Session 5A - Mobilising Domestic Resources for Development - Fighting Corruption: Launch of the Thematic Dialogue on Commodity Trading Transparency

Launch of the Thematic Dialogue on Commodities Trading Transparency by Mr. Joseph Williams, Senior Advocacy Officer, Natural Resource Governance Institute

Session 5B - Mobilising Domestic Resources for Development: Tackling BEPS challenges in extractives

IGF-OECD Program on Tax Base Erosion and Profit Shifting in the Mining Sector in Developing Countries by Ms. Alexandra Readhead, BEPS Project Technical Advisor, IGF, Mr. Howard Mann, Senior International Law Advisor, IISD/IGF and Mr. Dan Devlin, Senior Tax Advisor, Extractive Industries, OECD Centre for Tax Policy and Administration

Closing remarks by:

Mr. Mario Pezzini, Director, OECD Development Centre

 

18-19 Dec. 2013: Inaugural Meeting | 3-4 June 2014: Second Meeting | 17-18 Nov. 2014: Third Meeting | 29-30 June 2015: Fourth Meeting | 2-3-4 December 2015: Fifth Meeting | 22-23 June 2016: Sixth Meeting  | 30 Nov-1 Dec 2016 : Seventh Meeting




 

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