Governance of Extractive Industries: Old Metal, New Polish

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Making Extractive Industries? Wealth Work for the Poor


​Back in 2004, Extractive Industries Review noted that “the overall framework of governance within which Extractives Industries (EI) development takes place will be a major determinant of its contribution to sustainable poverty reduction.” The expert panel called for World Bank Group to do more on governance and transparency of the sector.

A decade on, and it is striking to see the evolution.

At the recent New Directions in Governance conference hosted by the World Bank’s Governance Partnership Facility (GPF) and the ODI in London, Governance of Extractives was one of the priority themes. A packed room for the dedicated sessions brought together WBG staff with donors in this space, and partners such as Natural Resource Governance Institute and the Extractive Industries Transparency Initiative (EITI), civil society networks such as Publish What You Pay, and new players such as OpenOil and Open Corporates, focusing on beneficial ownership aspects. It brought home the extent to which this theme has become an established subfield in itself – a small industry of researchers, think thanks, consultants, CSOs and donor agencies promoting good governance and working with a fast growing list of resource rich countries.

So where do we stand?

There has been strong progress on transparency - built around the cornerstone of EITI, with 46 members , and complemented not just by requirements of lenders such as IFC, but by legislation in the EU and US. But more needs to be done to ensure petroleum and mineral resources translate into tangible development benefits for citizens. Progress on transparency needs to be matched by greater accountability. The recent broadening of focus to support good governance along the whole extractives value chain, going beyond revenue payments is encouraging, as exemplified in the new EITI standard.

Where should we be focusing?  Emerging priorities identified in London included:

  • Harnessing the growing flood of extractives data to better translate into accountability, including how to effectively deliver information in an accessible way that responds to stakeholder needs and addresses information asymmetries, whether across different parts of government, between contracting parties and civil society, between private sector and government counterparts.
  • Finding ways to support meaningful civil society participation in extractives governance processes, focusing not just on civil society capacity but the space for non-state actors to operate effectively.
  • Tackling frontier issues with highly technical elements, such as transfer pricing, contract renegotiations, commodity trading, and, quality of host government information systems.
  • Prioritizing countries with new resource discoveries to support strengthening of governance from the beginning, recognizing early decisions have critical knock on effects and the need to manage expectations.

How can the WBG help to lead on this agenda? For one, high levels of technical expertise across the value chain make the WBG a good candidate for delivering technical assistance and capacity-building for the range of stakeholders.

Secondly, the institution has proven ability to support strengthening of institutions relevant to extractives governance across the value chain – from licensing and contracting to tax administration to budgeting and oversight authorities – and to use instruments, such as political economy analysis, and social accountability tools to help build trust in those institutions.

Finally, the WBG’s convening power remains an important asset, for example, to create more space for multi-stakeholder dialogue and support joined up approaches, such as around extractives data to allow citizens to “follow the money.”

The timing is right to develop a more holistic framework for WBG engagement on governance of extractive industries, ensuring complementarity with other key players.  The good news is that there is already commitment with global partners to hold a dedicated follow up discussion in early December.

Hopefully we can then lay out key components of a strategic approach for debate.

On October 8, I encourage you to join us for a live event to talk about how can governments channel natural resource revenues into smart investments. You can also use #extractives on Twitter to share your thoughts or ask us questions.

In the meantime, join the ongoing conversation at the Governance of Extractive Industries community of practice –


Michael Jarvis

Executive Director, Transparency and Accountability Initiative

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