Second Meeting of the PD-NR, 3-4 June 2014

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Key outcomes

Under the co-chairmanship of Chile, Liberia, Norway and Kazakhstan, twenty delegations from Africa, Asia, Europe, and Latin America, convened for the second time at the OECD Conference Centre on 3-4 June to embark on substantive discussions on the policy challenges commonly faced by resource-based economies. Seventeen multinational mining, oil & gas companies, industry associations and civil society organisations also joined the multi-stakeholder consultation on local content development held on 3 June. The International Monetary Fund, the United Nations Development Programme, the World Bank and the World Economic Forum participated as members of the Expert Advisory Board, established to promote effective collaboration with Partner Organisations.

Participating countries recognised that knowledge sharing and peer learning are useful to develop new collective understanding of the substantive issues at stake and inform better policy making. The oil & gas as well as the mining industries are also willing to actively contribute to this process to better understand how they can become and act as a truly ¨development partner¨ to effectively support efforts to maximise benefits from extractives. Participants recognised that the Policy Dialogue offers a trustworthy and interactive setting where this aspiration can be turned into practice.

Participating countries adopted the document on the governance structure of the initiative, laying down the foundations for long-term engagement in this collaborative endeavour.

Participating countries further agreed to establish the Business Consultative Platform to the Policy Dialogue on Natural Resource-based Development to foster regular consultations with the private sector. The Business Consultative Platform will support and provide input to the inter-governmental process of the Policy Dialogue on Natural Resource-Based Development. This will ensure participatory engagement from the private sector as an important development actor, while preserving the credibility and neutrality of the substantive analysis developed under the governments’ leadership and ownership and shielding the outcomes against issues of conflict of interest.

Participating countries agreed on the roadmap to advance on the different substantive work streams as follows:

Work Stream 1 - Shared Value Creation and Local Development

The dialogue resulted in the clear identification of areas of alignment and intersection between government’s priorities and industry’s interests. There was consensus that extractives can be a springboard for long-term economic development and that local content can be a catalyst for structural change. Participants agreed to:

Carry out evidence based analysis of selected case studies on in-country value creation. This will help address the ‘what to do’ but also at ‘the how to’ questions and better appreciate what worked and what didn’t. As the discussion throughout the meeting showed the interrelations between macro-economic considerations and issues related to linking revenues from extractives with spending strategies for development, including local content issues, it is envisaged to combine the substantive analysis at country level to carry out comprehensive policy reviews on natural resource-based development with the involvement of knowledge peers, feeding into the comparative analysis of country experiences. The Secretariat is following up with countries that have expressed interest in participating more actively in the substantive work supporting the Policy Dialogue.
Work together to develop strategies to operationalise the identified shared goals and pull together in the same direction. Consensus emerged to develop a guidance framework on how to operationalise shared goals through collaborative efforts for sustainable local content development. This involves getting a better understanding of the life cycle of extractive projects and changing opportunities over time for horizontal, backward and forward linkages across the value chain of extractives (the “what”). Governance mechanisms for operationalising common goals and improving public-public, public-private and private-private coordination should also be further investigated.

Work Stream 2 - Revenue Spending and Stabilisation Funds

Participants agreed to carry out comparative analysis of country practices to assess the performance of stabilisation funds and public investment options. Chile, Kazakhstan, Mongolia, Norway will participate in this exercise. On revenue spending, a starting point will be to share any relevant information produced so far to start building a collective knowledge base to better understand how to allocate revenues and how public investment can be made more effective.

Work Stream 3 - Getting Better Deals

A feasibility study on establishing benchmark prices for minerals will be presented at the next meeting of the Policy Dialogue. This work is also intended to enable countries tackle more effectively transfer pricing issues. It further contributes to responding to the G8's call to make information about the buying and selling of natural resources publicly available and improve transparency in extractives.

Work Stream 4 – Detecting Corruption Risks in the Extractive Sector

Participating countries agreed on the opportunity to leverage complementarities with the activities of the G20 Anti-Corruption Working Group and build on the risk mapping exercise carried out by the World Bank in order to identify red-flag scenarios in extractive industries and best practices on how risks have been addressed at both the public and private level. The OECD could extrapolate relevant data from the foreign bribery case studies compiled under the auspices of the OECD Anti-bribery Working Group. Participants further agreed to leverage synergies between Work Streams 1 & 4 looking into the potential impact of local content requirements on corruption and to involve stakeholders in any further discussion on corruption risks.

Development Centre

Second Meeting of the PD-NR, 3-4 June 2014

Key outcomes