Guiding Principles for Durable Extractive Contracts

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”.

Participants in the Twelfth Plenary Meeting of the Policy Dialogue on Natural Res ource-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.

The Guiding Principles for Durable Extractive Contracts were endorsed by the 56 members of the OECD Development Centre’s Governing Board on the 10 February 2020, with a few adjustments. The Governing Board invited the Policy Dialogue on Natural Resource-Based Development to actively promote the Guiding Principles, share best practices and innovative approaches in the negotiation of balanced extractive contracts, review the experience with the Guiding Principles and consider possible adjustments.

Negotiations support providers, such as CONNEX, the African Legal Support Facility and the Commonwealth Secretariat, have pledged to utilise the Guiding Principles in their ongoing support and programmes in developing countries, and have recognised how these principles can reduce the asymmetry of information and can build the capacity of governments in negotiating contracts.

The 56 members of the Governing Board of the OECD Development Centre endorsed the Guiding Principles on 10 February 2020.

The Governing Board invited the Policy Dialogue on Natural Resource-Based Development to actively promote the Guiding Principles, share best practices and innovative approaches in the negotiation of balanced extractive contracts, review the experience with the Guiding Principles, and consider possible adjustments.

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Watch the DevTalks online discussion:Withstanding the test of time: making extractive contracts work for everyone,
held on Wednesday, 9 December 2020 to mark the official launch of the Guiding Principles for Durable Extractive Contracts

With:
Mario Pezzini, Director, OECD Development Centre and Special Advisor to the OECD Secretary General on Development;
Lahra Liberti, Head of Unit, Natural Resources for Development, OECD Development Centre;
Salli Swartz, Partner, Artus Wise;
Iain Steel, Research Associate, Overseas Development Institute (ODI);
Howard Mann, Senior International Law Advisor, International Institute for Sustainable Development (IIDS);
Anna Theeuwes, Global Tax Policy Manger, Shell International BV;Michel Florent Okoko, Permanent Secretary of the National Committee & EITI Advisor to the Minister of Finance, Republic of Congo, and Member of the EITI Board;
Peter Leon, Partner, Herbert Smith Freehills.

Watch this video series which provides perspectives from stakeholders who were involved in the development of the Guiding Principles on how the Guiding Principles
can be used as a tool to help develop durable extractive contacts, and to help host governments and investors negotiate balanced deals for extractive contracts

Dr. Carole Nakhle of Crystol Energy	Ms. Naadira Ogeer and Ms. Alache Fisho of the Commonwealth Secretariat	Mr. Florent Michel Okoko of the EITI Republic of the Congo (en français)
Prof. Peter Cameron of the Centre for Energy, Petroleum and Mineral Law and Policy (CEPMLP), University of Dundee	Mr. Tony Addison of the United Nations University's World Institute for Development Economics Research (UNU-WIDER)	Mr. Amir Shafaie of the Natural Resource Governance Institute (NRGI)