The Executive Session on the Politics of Extractive Industries
The Executive Session on the Politics of Extractive Industries (ES on PEI) is a policy innovation lab led by a group of experts – academics and practitioners – from across the world. Focusing on politics means seeing the ways in which power, interests, incentives and the characteristics of political systems shape the outcomes of extractive industry projects, how they are developed and the subsequent fate of governance interventions in these projects. The purpose of this group is to produce practical insights, new strategies, and tangible guidance to address a major challenge confronting all those hoping to improve outcomes from extractive industry development: the political aspects of the governance of the sector.
Our collaborative approach aims to develop active approaches to understanding the politics of extractive industries, which means seeing the ways in which power, interests, incentives and characteristics of political systems shape how extractive industry projects are developed, their ultimate outcomes, and hence also the fate of governance interventions in such projects. The purpose of this group is to produce practical insights and tangible guidance for the implementation of context-specific solutions .
In support of this agenda, CCSI is applying a modified version of the Executive Sessions model– based on regular, on-going interactions among dedicated and committed key practitioners and researchers around a difficult set of challenges facing a given field – to advance the field’s approach to understanding and addressing the effects of politics on the outcomes of extractive industries in order to move practice and enhance outcomes.
Why do Politics Matter in Extractive Industries?
There are now a significant number and diversity of organizations and initiatives focusing on norm advocacy and the identification and promotion of technical “best practices” related to the governance of EI (GEI). This work on normative and technical aspects of governance has generated notable accomplishments over the last decade or so. The cloak of confidentiality that has shrouded the sector is being steadily lifted; both voluntary initiatives like EITI and mandatory disclosure requirements have started to generate a wealth of data about the sector, including payment and revenue data and more information about the ownership and operation of extractive projects. In addition, the field has made important progress on identifying good practice and good policies related to the full value chain of extraction, including around local content, shared use of infrastructure, taxation, benefit sharing, environmental practices, community engagement and consultation, and many other issue areas. There also has been a notable increase in the number of trainings and tools – e.g., open fiscal models and databases of contracts and project data – to support the technical capacity of host governments and other actors to implement available guidance and to use the expanding stock of information and data.
At the same time, there is a growing sense within the field that despite the great advancements in transparency, data generation, acceptance of good governance norms, availability of technical assistance, and other accomplishments, the many activities, strategies and research thus far have not significantly advanced the ultimate goals of the field, including improved well-being of citizens in resource-rich countries. The emerging consensus is that, in part, progress on these fronts has been impeded by inadequate attention devoted by the GEI field to political considerations, a conclusion that has also been emerging in the broader development field beyond EI. Such political considerations include, for instance, better understandings of: the landscape, workings, and interactions of relevant domestic and global institutions; the impact of different distributions of power on how policies are selected and implemented; the nature of political will and different types of incentives and constraints facing key actors along the decision chain; how these, in turn, influence policy preferences, implementation and impacts; and other political dynamics at local, sub-national, national, regional and global levels that can determine how extractive industries will be governed and what the actual outcomes of their development in a given country will be.
The practical limits of technical interventions and normative advocacy to date strongly suggest the importance of addressing issues related to political context, and yet, within the GEI field, how various stakeholders can and should understand and address such issues in research or practice remain strikingly underdeveloped. Too often there is a tendency to reduce the universe of political considerations to a narrow and immutable notion of “political will” which is fixed and difficult to act upon no matter how critical in shaping outcomes.
Stay up to Date
- The Challenges to Extractive Investment in Latin America: A South – South Conversation by Cynthia Sanborn and Weijun Xie March 9, 2019
Dr. Cynthia Sanborn, of the Universidad del Pacífico in Lima, Peru, recently interviewed Dr. Weijun Xie, Vice President of China Minmetals Rare Earth Co., Ltd, and a fellow member of the Executive Session on the Politics of Extractive Industries, about the rising prominence of Chinese companies in the world extractive industry. Their conversation addresses the larger political concerns for Chinese investors as they enter into an investment world historically dominated by European and American companies. It also addresses the on-the-ground political challenges of effective communication, transparency and consultation that affect all extractive industry investments, but particularly new and growing enterprises such as those coming out of China.
- To Fight Climate Change and Achieve Policy Objectives, Think Politics First and Often by Nathan Lobel February 26,2019
Nathan Lobel makes the case for adding an analysis of political costs and benefits to economic ones when choosing climate policy. Juxtaposing the years-long push for a carbon tax to recent calls for a Green New Deal, Lobel points out the dangers of an overly technical analysis of policy options, one which pays little attention to how policies are likely to be implemented, received by the public and built upon in the future.
- Why Politics Matter for Technical Assistance, in Guyana and Beyond by Michael Jarvis September 19, 2018
Given the huge amount of attention attracted by the oil discoveries in Guyana recently, Michael Jarvis asks the question: how can development practitioners and policymakers better address the political implications of large oil investments? As events have already shown, the promise of such a large windfall quickly becomes part and parcel of local political questions: the upcoming elections, diplomatic ties with other countries and support for independent regulatory bodies. Jarvis argues that technical advice itself will not be enough. In order for Guyana to develop effective institutional capacity to capture and distribute oil resources, the development world, companies and policymakers must engage politically, working across government agencies, ensuring accountability, transparency and coordinating with diverse stakeholders.
What We’re Reading
- Alan Hudson, “Transparency: From Revolution to Evolution,”Global Integrity (April 11, 2019)
- Phil Mason, “Reflections of an Anti-Corruption Fighter — Part II,” Medium (May 20, 2019)
Dr. Mohammed Amin Adam, Deputy Minister of Energy, Ghana
Saku Akmeemana, Principal Specialist for Governance, Department of Foreign Affairs, Australia
Dr. Ernest Aryeetey, Secretary-General, African Research Universities Alliance (ARUA)
Thomas Baunsgaard, Deputy Chief, Tax Policy Division, IMF Fiscal Affairs Department
Delphine K. Dijraïbé, Co-Founder, Chadian Association for the Promotion and Defense of Human Rights and Chief Attorney at Public Interest Law Center (PILC)/CHAD
Michael Jarvis, Executive Director, Transparency & Accountability Initiative
Ramanie Kunanayagam, World Bank Inspection Panel Member; Industry Fellow, University Queensland
Dr. Cielo Magno, Assistant Professor, School of Economics, University of the Philippines Diliman
Dr. Valérie Marcel, Associate Fellow, Chatham House
Heather Marquette, Professor in Development Politics, International Development Department, University of Birmingham
Tom Mitro, Co-Director of the Graduate Certificate in Global Energy, Development and Sustainability, University of Houston
Dr. Francisco Monaldi, Fellow in Latin American Energy Policy, Baker Institute for Public Policy, Rice University
Carlos Monge, Regional Director, NRGI Latin America
Carole Nakhle, Founder and CEO, Crystol Energy
Lisa Sachs, Director, Columbia Center on Sustainable Investment
Dr. Cynthia Sanborn, Vice President for Research, Universidad del Pacífico
Dr. Ricardo Soares de Oliveira, Associate Professor, Department of Politics and International Relations
José Texeira, Attorney at Law and Partner, Da Silva Teixeira & Assoc., Lda.
Jeremy Weate, Natural Resource Governance Expert
Dr. Weijun Xie, Senior Engineer in International Business, China Minmetals Corporation
Advisory Board Members
Ian Gary, Director, Accountable Development Finance, Oxfam America
Deborah Isser, Lead Governance Advisor, The World Bank
Daniel Kaufmann, President and CEO, Natural Resource Governance Institute
Sheila Khama, Practice Manager, The World Bank
Antonio Pedro, Director, Sub-regional Office for Eastern Africa, United Nations Economic Commission for Africa
Alina Rochal Menocal, Senior Research Fellow, Overseas Development Instiute
Jeffrey Sachs, Director, Center for Sustainable Development, Columbia University
Leni Wild, Head of Politics and Governance Programme, Overseas Development Institute