About the Source Book
- 5.1 Policy Context
- 5.2 Sector Legislation: Design
- 5.3 Sector Legislation: Content
- 5.4 Contracts and Licenses
- 5.5 Local Content
- 5.6 The Award of Contracts and Licenses
- 5.7 Regulations
- 5.8 Contract Negotiations and Dispute Settlement
- 6.1 Institutional Structures
- 6.2 An Overview of the Key Governmental Bodies and Agencies
- 6.3 Focus on a Key Player: National Resource Companies (NRCs)
- 6.4 Key Institutional Issues
- 6.5 Efforts at Institutional Reform
- 7.1 Fiscal Objectives
- 7.2 Fiscal Instruments
- 7.3 Special Fiscal Topics and Provisions
- 7.4 Fiscal Systems
- 7.5 Fiscal Administration
- 7.6 Summary and Recommendations
- 8.1 Fiscal Rules for Saving vs. Spending
- 8.2 Fiscal Rules: Savings Funds
- 8.3 Alternative Means of Addressing Fiscal Sustainability
- 8.4 Addressing Volatility: Stabilization Funds
- 8.5 Alternative Means of Addressing Volatility
- 8.6 Spending Choices
- 8.7 Revenue Allocation
- 8.8 Summary
- 9.1 The Approach in the Source Book
- 9.2 What are the Challenges?
- 9.3 Investment
- 9.4 Expenditure Quality Control and Oversight
- 9.5 Objectives
- 9.6 Challenges and Special Issues
- 9.7 General Principles for Response
- 9.8 Policy Instruments
- 9.9 Management and Oversight
- 9.10 Stakeholder Consultation and Participation
- 9.11 Conclusions
Knowledge of the oil, gas and mining industries has become a subject of acute controversy as it has become clear that their activities can bring more costs than benefits to the country that hosts them. The surge of activity and investment they bring can trigger high expectations only to disappoint as the benefits are retained by a few and the costs are borne by many. Development of the country in which the operations take place may not necessarily follow upon such investment, at least not in the sense that it generates long-term development impacts. Yet, if a lack of knowledge is among the reasons for this failure in oil, gas and mining, it is rarely knowledge of a narrowly technical kind that is to blame. It is knowledge of the elements of governance that is deficient or at fault, rather than the disciplines of science and technology.
It is this knowledge gap that that the Extractive Industries (EI) Source Book (Source Book) seeks to fill. Its subject matter is one group of strategically important natural resources – oil, gas and minerals - found underground or beneath water and capable of being extracted by human endeavour. It identifies key levers for making a success of these industries – from the standpoint of the public good. These are: sector policy and law, contract and regulation; sector organisation and administration; fiscal design; revenue management; transparency and accountability; and finally sustainability in the sense of environmental and social management and the linkages of these activities to broader impacts across the economy. Each of these six levers is in our view crucial to making a success of extractive industry development. The reasons are provided in each chapter of the Source Book accompanied by illustrations from specific country contexts. Each one has an important governance dimension.
As a matter of principle, we believe that robust public engagement in EI development policies is necessary and conducive to long term stability of resource projects. Access to knowledge is a prerequisite. However, this needs to be more than ‘information’. Publication of a contract between a government and an investor will not in itself lead to understanding and an ability to critically evaluate the contents of such a contract. The Source Book is intended to equip the reader with an understanding and the basic tools for critical engagement with the key issues.
The body of knowledge in the Source Book is principally intended for use by senior government officials and decision makers in parliaments, and by supporting domestic and international technical specialists. However, the importance of participatory processes to sustainable development of oil, gas and mining means that the Source Book has also been designed to better inform and equip members of national and international civil society groups, industry, communities and indigenous peoples.
The Source Book project is driven by a mixture of optimism and hope about the potential of the extractive industries for positive, sustainable development, particularly in the world’s poorer countries and in post-conflict societies. Its central premise is that sound technical knowledge and awareness of practical options can lead to better political, economic, and social choices with respect to sector development and the related risks and opportunities. Such choices will only be effective however if they are closely linked to institutional capacity and country context.
- I. Introduction
- 1. Why a Source Book?
- 2. Opportunities and Challenges
- 3. The Extractive Industries
- II. Cross-Cutting Topics
- 4. Transparency and Accountability
- III. The Extractive Industries Value Chain
- 5. Policy, Legal and Contractual Framework
- 6. Sector Organization and Institutions
- 7. Fiscal Design and Administration
- 8. Revenue Management and Distribution
- 9. Sustainable Development