Putting partnerships to work

The 2002 World Summit for Sustainable Development in Johannesburg stressed the need for strong partnerships between companies, civil society and government to achieve international development goals. Since then many have been set up focussing on local healthcare or water and sanitation for example. To date, however, less attention has been given the question of how partnerships can contribute to regional development.

This is important to oil, gas and mining companies which find their 'social licences' to operate undermined as the benefits of extraction often fail to reach the regional level. This is because:

• Regulatory frameworks often fail to distribute wealth to communities across a region effectively.
• Environmental and social safeguards tend to focus on minimising local negative impacts, rather than adding development value.
• Compensation, employment opportunities and voluntary social programmes are frequently aimed at communities most affected by operations (those losing assets or involuntarily resettled) rather than at the regional level.

Three elements are needed to ensure that natural resource projects are beneficial at a regional level and to allow companies to mitigate against the loss of reputation and cost-liabilities often associated with site closure (such as mass unemployment):

• A vision and plan for sustainable regional development, within which the potential economic and poverty reduction effects of the project can be assessed.
• Evidence of equitable and visible gains for companies, communities and governments. This will require transparency, legitimacy and efficiency in the use of resource rents by regional government, the provision of incentives and capacity development for local government and civil society organisations across the region to ensure that revenues 'reach' the communities.
• Community development opportunities that are accessible across the region and sustainable in the long term.

A partnership forum of leaders and organisations from across the region is one way for extractive industry companies to begin to deliver on this vision. The forum should include national regulators, regional and local government authorities, project operators from the extractive industries, other relevant corporations, employee unions, trade associations, national NGOs, and regional church and community leaders.

Such a forum could provide a platform for negotiating strategic partnerships to optimise co-ordination and access to resources across the corporate, civil society and international donor sectors. It could convene project-based partnerships and provide a level-playing field for negotiating voluntary codes of conduct among regionally competing firms. It could also provide a safe space for resolving grievances (such as companies poaching staff from the local civil service or the maintenance of public roads used by project vehicles).

To succeed in supporting long-term regional development, the forum would need to:

• make sure there is enough political will within the programmes it promotes to ensure the release of resource rents by government
• have support from administrative and mediation services
• understand that the primary contribution of project operators in social programmes should relate to short-term inputs (such as setting standards or project management) so that local society and the company are not caught in a 'dependency trap'
• include members from across the region to give it legitimacy
• consider using existing forums in the region.

Rory Sullivan
Insight Investment
33 Old Broad Street
London EC2N 1HZ
UK
T +44 (0)20 73211875
rory.sullivan@insightinvestment.com
www.insightinvestment.com

Michael Warner
Overseas Development Institute
111 Westminster Bridge Road
London SE1 7JD
UK
T +44 (0)20 79220381
m.warner@odi.org.uk
www.bpd-naturalresources.org

See also

Putting Partnerships to Work: Strategic Alliances for Development between Government, the Private Sector and Civil Society edited by Michael Warner and Rory Sullivan, Greenleaf Publishing, Sheffield, 2004

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