Primer: Local Content

Extractive projects also have the potential to generate benefits for local communities through employment and the demand for goods and services.

KEY MESSAGES

• Local content is the value that an extraction project brings to the local, regional or national economy beyond the resource revenues.
• Countries can encourage local content through requirements and targets written in national laws and individual contracts.
• Producing strong local content results can be very difficult because of the technical requirements of the industry.
• Companies should have open and transparent procurement procedures to avoid the opportunity for corruption and cronyism.
• Governments wanting to improve local content need to understand associated costs and challenges such as potential loss in company profits resulting in reduced revenue, inflation and corruption.