Resource Governance Index Launch Highlights Six Ways to Enhance Extractives Governance

Late last month, following a three-year project cycle including over 12 months of data collection, analysis and writing, NRGI launched its 2017 Resource Governance Index with a livestreamed panel discussion in London.
 
NRGI’s ambition for the index, as always, is to raise awareness of the governance challenges particular to the extractive sector. The index’s aim is to provide granular data, benchmarks for good practices, insights on where to look for lessons for countries, and direct attention to areas in need of attention.
 
Crucial resource governance elements such as commodity sales, contracts and identification of beneficial owners in many cases remain out of public view, panelists at the London event said. This isn’t just something for governments and citizens to focus on. Mining companies, for example, can also benefit from good resource governance, since they make long-term investments and must secure trust by local communities by operating sustainably.

Former president of Mexico Ernesto Zedillo discusses the index findings with Ghana’s Mohammed Amin Adam and Carole Nakhle of Crystol Energy.

Transparency alone is not a fix to resource governance challenges. By providing a heat map for assessing the degree to which extractive sector is managed in a transparent and accountable manner, the index can create a fact-based common ground for dialogue and debate on governance, and this way, ultimately help shape policy development. The index data led researchers to six concrete recommendations:
 
1. Focus on implementation. Strengthen the implementation of laws and regulations in extractives—particularly in areas related to the environment, local communities and subnational revenue sharing.
 
2. Continue to open governments. Shed light on the true beneficial owners of companies, the commercial interests of officials and their associates, the deals governments make, and the detailed project-level payments companies make to governments.
 
3. Bolster state-owned enterprise governance. Strengthen the regulation and disclosure of oil sales. Establish independent governing boards; make appointments according to well-defined, meritocratic processes; and emphasize technical expertise rather than political patronage.
 
4. Protect civic space and combat corruption. Open civic space where citizens and journalists lack freedoms to speak up and hold their governments to account. Strengthen rule of law, regulatory quality and corruption control so that laws specific to the extractives sector will have impact in practice.
 
5. Strengthen global norms and institutions. Strengthen the implementation of laws and regulations in extractives—particularly in areas related to the environment, local communities and subnational revenue sharing.
 
6. Use data to drive reform. Assess the quality of resource governance and use data to improve institutions, policies and practices. Develop institutional systems providing regular and timely gathering, analysis and dissemination of key data in resource-rich countries. Release public information about the resource sector in line with the Open Data Charter standards.
 
Local context and using the index at the country level is important, as participants in many country launch events discussed on 28 June or in the days and weeks following. In Ghana, policy-makers debated the country’s low mining sector scores, and methods for improvement. In Colombia, commodity sales were viewed as a potential area for clean-up. There were further events for example in the Democractic Republic of Congo, Indonesia, Kyrgyz Republic, Tunisia, Mexico and elsewhere.
 
NRGI is also focused on making the index a go-to resource for media. The index has been covered in the Financial Times (here and here), The Economist, The Wall Street Journal and important regional media such as Mexico’s Expansión and Nigeria’s Premium Times. The Brookings Institution blog also explored the findings.
 

Civil society organizations like BudgIT in Nigeria and Bantay Kita in the Philippines are also putting index data to use.  
 
The true measure of the usefulness of the index is the extent of its use by partners around the world. NRGI is focused on index uptake by delivering training on the use of the index data to global partners such as the Publish What You Pay coalition and others. This is only the beginning, and NRGI will continue to produce research and insights using the index and other data sources, and promote the use of the index for research by other organizations. You can visit the index source library and NRGI’s Excel-based data explorer, featuring a full dataset and justifications, for more information. The index team also welcomes comments and queries at index@resourcegovernance.org.
 
Kaisa Toroskainen is a research and data officer with the Natural Resource Governance Institute (NRGI). Liz McGrath is NRGI’s research and data director.
 

NRGI president and CEO Daniel Kaufmann presents the index in London.