Policy Innovations / Natural resource governance

Natural resource governance

According to Nigeria’s own corruption agency, up to $400bn of oil money has been stolen or wasted over the past 50 years.

George Soros, Founder and Chairman, Open Society Foundations

The possession of plentiful natural resources can be a mixed blessing for a country. Many developing countries rely on the revenues generated by the trade in such resources, but oil, minerals, forests and land have also been the cause of poverty and conflict.

Ensuring transparency in and accountability for the use of those revenues is vital – particularly as global demand for those resources grows. The natural resources sector has been the focus of much international attention. Numerous initiatives seek to improve the transparency and accountability of those resources and the revenues from the trade in them. Yet many avenues remain unexplored.

Absence of universal transparency standards

For example, previous donor work has focused mainly on improving natural resource governance at the national level, neglecting the important role played by state and provincial level governments, and traditional authorities in some contexts. The absence of a set of universal transparency standards on natural resources highlights a missed opportunity – a level playing field for producers and a common platform for citizens of resource rich countries is needed. As does the failure to engage emerging economies – the main source of growing demand for developing countries’ natural resources – in international transparency efforts.

The role of emerging economies

The Transparency Initiative’s (T/A Initiative) research is driving new thinking in this field. Our work in this sector has revealed an urgent need to work with a small group of governments and companies from emerging economies in the G20. With most of the governance work in this sector having been negotiated between OECD countries, engaging with economies across the G20 is vital for the global success of this field. To ramp up international work on transparency and accountability in natural resources, our research suggests new ways in which programmes and policies can enhance their governance. Some of the priorities we identify include:

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  • Engaging emerging economies, who are the main source of growing demand for natural resources
  • Strengthening support to existing initiatives including the Extractive Industries Transparency Initiative
  • Improving the capacity of civil society groups to participate in the negotiation of natural resource contracts
  • Promoting the transparency and accountability of sub-national and traditional authorities involved in natural resource governance

We focus on the large-scale use of: oil and gas, minerals and metals; forests; fish; land and water. This work forms part of the Transparency and Accountability Initiative’s Policy Innovation research, which examines innovative ideas to improve transparency and accountability in five other areas:

  1. Budget processes
  2. Climate change
  3. Donor aid
  4. Financial sector
  5. Open government partnership

Our work on transparency and accountability includes two other strands of work:

  • Read about the New Technologies working group which stimulates and advances the wider use of new technologies in the transparency and accountability field
  • Learn about the Impact and Learning working group which reviews the impact of transparency and accountability initiatives worldwide.