2021 Resource Governance Index: Common Questions & Answers
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Over the past nine months, NRGI has published the results of our 2021 Resource Governance Index (RGI). From June to November, we published assessments of the state of governance in the oil, gas and mining sectors in 18 countries, and in December, we published a final report (also available in Arabic, French and Spanish), presenting an overview of the trends and evolutions in resource governance.
Thousands tuned in to our only country-specific launch events. The 2021 RGI prompted commentary pieces and received print, online and TV coverage in dozens of outlets. Civil society organizations (CSOs), government officials and industry experts have shown widespread interest in how countries govern their extractive sectors.
Since the publication of the first 2021 RGI country assessment, we have received numerous comments and questions about various aspects of the index. We publish the RGI because transparency and accountability in the extractive sector are key to ensuring people receive lasting benefits and experience reduced harms from their country’s extractive sector. NRGI is committed to ensuring that the RGI is fully transparent, by publishing the methods we use and the underlying data and supporting documentation for each assessment. Many interesting questions have come up, so here we answer some of the most common.
Use the links below to navigate to the answers.
- How were the researchers selected?
- How were the assessed countries and sectors selected?
- What was the time period under assessment?
- Were governments involved in the research process?
- What does the RGI measure?
- Is the RGI technical or perception-based?
- Why are some parts of the RGI not applicable in certain contexts?
- How is the “enabling environment” component calculated?
- Does the RGI assess any new topics? Are there any areas that are not covered?
- How can the RGI be used by civil society and accountability actors pushing for change?
- Does the NRGI follow up with governments to ensure that the RGI’s recommendations are implemented?
Research process
How were the researchers selected?
In mid-2020 we began the recruitment process for researchers and peer reviewers, including in most countries an open call for consultants in each RGI country assessed. We interviewed and selected researchers who best met the following three standards:
- A citizen or person with good working knowledge of the country they were to assess.
- Excellent knowledge of resource governance issues.
- Independence from the government or extractive companies.
The names of the researchers and peer reviewers are published on the RGI website (we have withheld the names of those who requested anonymity). Researchers then answered the RGI questionnaire, which through almost 200 questions assesses the state of resource governance in the country and sector (either oil and gas, or mining). Upon the completion of the research phase, NRGI’s country and subject matter experts and the RGI project team thoroughly validated the findings of the researchers and peer reviewers.
How were the assessed countries and sectors selected?
Several factors played a role in selecting the countries for the 2021 RGI.
- Is the country one where NRGI operates?
- Does the country have an extractive sector that either already plays a significant role in the economy, or is expected to do so in the coming years?
- in the case of the mining sector, is there a particular mineral that plays a special role in the country’s economy, strategic considerations, or future potential?
As a result, we chose to focus on 18 countries, assessing half on both their mining and oil and gas sectors. The 2021 RGI includes assessment of 28 oil, gas and mining sectors in total. A map of country coverage in the 2021 RGI can be viewed here.
What was the time period under assessment?
Research on the 2021 RGI took place between the end of 2020 and2021 Q1. In order to ensure consistency across all the countries assessed, researchers and peer reviewers only noted developments in resource governance until 31 December 2020. The 2021 RGI does not therefore capture any policy changes or disclosures that took place after this date.
Were governments involved in the research process?
Governments were not involved in the primary data collection process and had no say in determining the final answers and scores. In some cases, where NRGI country experts were able to do so, we provided preliminary answers to governments, civil society organizations and/or international organizations. If they provided feedback and presented new information on specific answers, we independently reviewed and verified their accuracy and adjusted the validated scores where relevant. As with the answers to every question in the RGI questionnaire, we also required and verified the supporting documentation, ensuring its public availability.
Methodology and calculation
What does the RGI measure? What does it not measure?
The RGI defines resource governance as the rules, disclosures, practices and oversight procedures and enabling environment governing countries’ extractive sectors. The RGI focuses on transparency and accountability. Therefore, all information the answers are based on must be publicly available. The RGI is the most comprehensive data-driven tool assessing extractive sector governance, but it is important to point out what the index does and does not measure:
| What the RGI measures | What the RGI does not measure |
|---|---|
| Rules, laws, regulations or policies relevant to countries’ extractive sectors |
Appropriateness of a particular country’s policies. For example, we evaluate the processes and practices that are undertaken to ensure a state-owned enterprise (SOE) is well-governed. However, we do not assess whether it is appropriate for the country to have an SOE in the first place. Areas that cannot be standardized or where approaches to research are lacking, e.g., international tax treaties. |
| Disclosures of data, transparency of processes and availability of documents related to the extractive sectors | |
| Oversight, including processes such as audits and appointments of independent bodies | |
| Wider governance metrics that enable or hamper the effectiveness of resource-specific sectors | External factors such as commodity prices and access to international markets. |
Is the RGI technical or perception-based?
The first two components of the index, which are derived from the RGI questionnaire, are technical assessments of resource governance. The third component, Enabling Environment, includes some perceptions data on the broader governance framework.
As mentioned in the question immediately above, the RGI focuses on the rules and laws in place, as well as the corresponding disclosures of information in practice. The first two components of the RGI, value realization and revenue management, focus solely on publicly available, measurable, technical aspects of countries’ resource governance. The third component, the enabling environment is calculated using data from the Worldwide Governance Indicators, which focuses on countries’ general governance in key areas, and from the Open Data Inventory, which assesses the coverage and openness of governments’ data portals.
Why are some parts of the RGI not applicable in specific contexts?
The RGI questionnaire is designed so that the questions posed apply to both the mining and oil and gas sectors in all countries. Nevertheless, not every country manages its extractive sector in the same way, and in some countries, certain institutions might not (or not yet) exist. This applies mostly to state-owned enterprises, subnational resource revenue sharing mechanisms and sovereign wealth funds. In countries where extractive sectors are in the pre-production phase, certain questions related to production or exports may not be relevant. In cases where institutions do not exist or local conditions are different, we mark these questions as not applicable, which means that the sections do not receive a numerical score. The question/section is then excluded from the calculation of the average score to ensure that the country’s overall score is not affected by the absence of these institutions.
How is the “enabling environment” component calculated?
We take the raw data for the enabling environment from the Worldwide Governance Indicators (WGI) and Open Data Inventory (ODIN). We then convert it to the rest of the RGI structure, using a data processing method called “percentile rank normalization.” Below we show what this means in practice, using Senegal’s “control of corruption” subcomponent of the WGI data as an example:
| Step: | Senegal - Control of Corruption | Comments on data processing |
|---|---|---|
| 1. Raw value | 0.0484844 | We take the “estimate” data point from the WGI database, which is 0.0484844. WGI “estimate” data is on a scale of -2.5 to 2.5. Given that the rest of the RGI is on a scale of 0-100, we need to convert this number. |
| 2.Ranking | Position 71 / 84 | We take the above number and rank it within the sample of 84 countries that appeared in the 2017 and 2021 editions of the RGI. Where 1st is the worst and 84th is the best, Senegal’s control of corruption places as the 71st out of the 84 countries surveyed. We retained 84 countries to maintain comparability with the 2017 RGI data for this component. |
| 3. Percentile rank normalization | 84.52 | We then convert this position to a percentile rank, calculated as 84.52. This is the percentile rank of Senegal’s control of corruption out of the RGI sample of countries. |
| 4. Rounding to obtain final score | 85 | We round this number to the nearest whole number to obtain the final score of 85 that Senegal receives for this subcomponent. |
Data and the entire calculation process for each country’s enabling environment can be found on the RGI website.
Does the RGI assess any new topics? Are there any areas that are not covered?
During data collection for the 2021 RGI, NRGI also collected answers to pilot questions related to the energy transition, economic linkages and local content. While the answers to these questions did not count toward countries’ overall scores in this year’s version of the index, the results provided important findings on how countries are preparing for the energy transition, the extent to which governments and SOEs are disclosing extractive sector climate-related information, and what policies govern their thinking on economic linkages such as local content or domestic processing and use of minerals, oil or gas. We have previously tested questions about some aspects of the gender dimension in the extractive industries, and as an organization, we have done research on gender inequality and published several pieces of research on the topic. However, we are still exploring how best to incorporate gender issues into the RGI.
The local economic impact of natural resource extraction is another area we have received questions about, however, to date we have not identified a relevant governance measurement to include in the index. While the RGI is the most comprehensive measure of resource governance available, some areas have insufficient elements of governance that are measurable or require research not feasible within the current context and timeframe.
Impact
How can the RGI be used by civil society and accountability actors pushing for change?
We produce the RGI primarily as a country- and sector-level diagnostic tool, and roadmap for policy and practice reforms. Through in-depth research and analysis, the RGI identifies and highlights some of the most pressing issues in resource governance. We frequently collaborate with civil society organizations in our countries of operation, so they can use the RGI as a robust evidence base to advocate for change.
CSOs can use the RGI to bolster existing advocacy for governance improvements in a specific topic. In Guinea, for example, the 2019 RGI interim assessment highlighted the implementation gap in subnational transfers of mining revenues to municipalities. Civil society organizations were able to strengthen their advocacy efforts, which helped to ensure that the government implemented these provisions from December 2019 onwards.
CSOs have also utilized the RGI as a monitoring tool for specific public bodies. For example, although the RGI covers one SOE per assessment, advocates can use the RGI questionnaire themselves to assess multiple SOEs. In 2018, a group of CSOs in Mexico combined information from the 2017 RGI and NRGI’s SOE Disclosure Guide to develop a methodology for monitoring energy SOEs in the country. in the country.
The RGI provides CSOs with a starting point for discussions and evidence of the need for working groups or committees, either with the government or as a group of CSOs. We have seen in several countries that the RGI can be utilized as a collective focal point for the state of resource governance in a country to help kick-start successful collaborations.
Does the NRGI follow up with governments to ensure that the RGI’s recommendations are implemented?
While the RGI provides a data-driven, robust view of resource governance in the countries assessed, we see this as only the first step in the process. We are using NRGI’s networks and convening capacity to ensure broad stakeholder involvement in implementing the RGI recommendations. We tailor methods for government involvement and follow-up that are specific to each country. Many RGI launch events included the participation of government representatives as participants and keynote speakers. Bilateral engagements with government departments will be ongoing as NRGI’s country experts continue to use the RGI to advance programming and support our mission. Change and impact take time to materialize. The 2017 index has led to many concrete and tangible impacts on improving resource governance worldwide. While it is still early to assess the impact of the 2021 RGI, the analysis has already led to information disclosure in several countries and has featured in calls by policymakers to reform various aspects of their resource governance.
Of course, the above might not answer all the questions you might have about the 2021 Resource Governance Index. If you have any questions which we have not addressed, please reach out to us at index@resourcegovernance.org.
