09/12/2020 - Today, the OECD Development Centre will release its Guiding Principles for Durable Extractive Contracts on the occasion of an online seminar. A unique tool, they offer a blueprint of eight principles for how exploration and production extractive contracts should be framed to ensure a fair sharing of the benefits from natural resource development. They aim at taking into account community interests and concerns from the outset of the project cycle. The Guiding Principles can also be used by host governments and investors in explaining the content of the contract to the public, thereby helping to overcome tensions between stakeholders.
Extractive contracts can have significant long-term impacts on the achievement of the Sustainable Development Goals. They not only shape the level of public revenues a government can get out of an investment, but also the extent to which that investment creates income-generating opportunities through employment and linkages with the local economy. Moreover, contracts also shape the balance between these economic benefits and social and environmental aspects.
Unbalanced contracts are not sustainable: they create strained relationships between governments and investors and are often a source of social conflicts around extractive projects. The Guiding Principles look at how to negotiate a fair deal for governments, investors, and communities. Contracts can facilitate good development outcomes if they ensure a fair sharing of benefits between governments, investors and communities throughout the project life-cycle and across a range of outcomes and market conditions. The Guiding Principles highlight that responsive fiscal terms can help manage pressures for fiscal change either from government or investors.
The Guiding Principles are the product of a multi-stakeholder effort by governments, industry, civil society, experts and international organisations. They will support programmes in developing countries, with the aim of reducing the asymmetry of information and strengthening the capacity of governments in negotiating contracts.
The Guiding Principles are an output of the OECD Policy Dialogue on Natural Resource-based Development hosted in the OECD Development Centre.
Register to today’s event - 12.00 - 13.30 CET: Reshaping Development: “Withstanding the test of time: making extractive contracts work for everyone".
Moderated by Lahra Liberti, Head of the Natural Resources for Development Unit, OECD Development Centre and Mario Pezzini, Director of the OECD Development Centre.
For more information, journalists are invited to contact Bochra Kriout at the OECD Development Centre Press Office ( Tel: +33 (0)1 45 24 82 96).