The Guiding Principles set out eight principles that provide guidance on how resource projects can be developed to reflect the balance of risks and rewards, which underpins durable contracts, while also taking into account, from the very beginning, community interests and concerns. They also aim at assisting host governments and investors in explaining the content of the contract to the public, thereby helping to overcome tensions between stakeholders.
The Guiding Principles are the result of an open, intense, enriching process that included multi-stakeholder consultations hosted by the Development Centre between December 2015 and June 2019. The Guiding Principles are an output of the OECD Policy Dialogue on Natural Resource-based Development’s Work Stream 3 on “Getting Better Deals”.
An initial draft of the Guiding Principles was prepared by the Development Centre, serving as Secretariat of the Policy Dialogue on Natural Resource-based Development, and was discussed during the Seventh Plenary Meeting of the Policy Dialogue on Natural Resource-based Development held on 30 November 2016 at the OECD in Paris. Following that meeting, the Guiding Principles were revised by the Development Centre and benefited from input received from interested stakeholders who met via teleconference to review subsequent drafts on 31 January, 28 March and 2 May 2017.
The multi-stakeholder consultation process involved subject matter experts from government, the private sector, civil society and international organisations. As part of the consultation process, an informal multi-stakeholder expert workshop was held on 7 April 2017 at the OECD in Paris. Subsequently, a draft of the Guiding Principles was submitted for consideration during the Multi-Stakeholder Consultation of the Eighth Plenary Meeting of the Policy Dialogue on Natural Resource-based Development held on 17 June 2017 at the OECD in Paris, and further revised following teleconferences on 25 July and 30 November 2017.
Meanwhile, at its 4th High Level Meeting held on 3 October 2017, the Governing Board of the OECD Development Centre encouraged the Development Centre to: “develop, through an open and inclusive participatory process, and building on the experience of relevant international initiatives, guiding principles for durable extractive contracts, so that host governments and investors can have a common reference to shape durable, equitable and mutually beneficial relationships”.1
An advanced draft of the Guiding Principles was discussed at the Ninth Plenary Meeting of the Policy Dialogue on Natural Resource-based Development held on 31 January- 1 February 2018 and simultaneously submitted for on-line public consultation during the period January-March 2018. All comments received at the Ninth Plenary Meeting and during the public consultation period were collectively reviewed and addressed during two multi-stakeholder expert workshops held on 26 June and 11 December 2018, followed by four teleconferences held on 20 February, 20 March, 17 April, and 22 May 2019.
Following the collective review of all comments from the public consultation and additional input from stakeholders, the Guiding Principles were presented and endorsed at the Twelfth Plenary Meeting of the Policy Dialogue on Natural Resource-based Development on 20-21 June 2019.
Participants in the Twelfth Plenary Meeting of the Policy Dialogue on Natural Resource-based Development strongly welcomed the Guiding Principles, emphasising their great value-added and the timeliness of their finalisation to support the implementation of the new Extractive Industries Transparency Initiative’s (EITI’s) requirement for contractual disclosure and to reduce disputes that can lead to investor-state arbitration.
Negotiations’ support providers, such as CONNEX, the African Legal Support Facility and the Commonwealth Secretariat, agreed to utilise the Guiding Principles in their ongoing support and programmes in developing countries, and recognised how these principles can reduce the asymmetry of information and can build the capacity of governments in negotiating contracts.
On 10 February 2020, the Governing Board of the OECD Development Centre:
I. ENDORSED the Guiding Principles for Durable Extractive Contracts developed by the Development Centre’s Policy Dialogue on Natural Resource-based Development;
II. NOTED WITH SATISFACTION the vital role of tripartite engagement, through multi-stakeholder dialogue, experience-sharing, and the good faith in the negotiations among host governments, industry and civil society, as useful means to promote mutual understanding, build trust, strengthen mutual confidence, and work towards mutually beneficial solutions and improved development outcomes;
III. INVITED the Policy Dialogue on Natural Resource-Based Development to support the Guiding Principles, including by:
i. actively promoting the Guiding Principles, particularly in the negotiation of extractive contracts;
ii. sharing best practices and innovative approaches in the negotiation of balanced extractive contracts;
iii. collaborating, as appropriate, with partner organisations on the use of the Guiding Principles; and
iv. reviewing the experience with the Guiding Principles and considering possible adjustments.