A rigorous policy and legislative framework ensures that economic benefits from the extractive industries are sustainably captured. Natural resource wealth has the potential to catalyse significant economic growth, but only if governed by robust policy and legislation and guided by a cohesive vision for the sector. 

A policy, legal, and regulatory framework should reflect a consensus reached by consultation with government, private sector and civil society so that expectations are aligned on the benefits and risks. 

Through consultative and comparative analysis, we have drafted policies and legislation for the natural resource sector in countries such as Sierra Leone, South Sudan, Georgia, Mongolia and Afghanistan. 

Fit for purpose institutions with appropriate capacity are essential to good governance of the economic activity that is triggered by the extractive industries. 

Only institutions with an appropriate mandate, design and capacity will be able to exploit the opportunities for sustainable economic growth and develop a flourishing and internationally respected extractive sector. In the energy, oil, gas and mining industries, deficient institutional frameworks can lead to disadvantageous contracts, low revenue, low impact on business, fewer employment opportunities, opaque deal-making, civil unrest and suboptimal policy and regulatory frameworks. 

Our experience in addressing these challenges in the extractives industries includes work in Afghanistan, South Sudan and Papua New Guinea. 

Investment in natural resource development can generate game-changing amounts of revenue for governments. Successful tax policy will carefully balance opposing objectives such as attracting investment versus maximising tax-take, spending today versus saving for tomorrow. 

Careful revenue management includes a focus on tax policy, administration and long-term management. It typically involves close collaboration with finance, revenue and resource ministries. 

The mining and energy industries should be a lifeline for communities with resources, but instead, resource exploitation can often introduce social and economic challenges. Empowering and engaging local communities and delivering effective communication is the best way to support mutually beneficial relationships between the private sector, government and citizens. 

The extractives industries typically trigger high expectations of employment and revenue, and false expectations can be fuelled by a lack of information. It is important to translate a technical development agenda into realistic, concrete outcomes for host communities so that there is an informed understanding of the extractives industries and their development and production lifecycles. 

Comprehensive communication strategies are key to mitigating risks of social unrest and conflict. 

The highest standards of transparency and accountability should be adopted in order to attract investors and gain public support. Information on bid rounds, licensing mechanisms, contracts and agreements, beneficial ownership status, pricing practices, the fiscal regime, operational cost structures and national geological information should all be in the public domain. 

All stakeholders – government, private sector and community alike – share responsibility for managing the environmental impact of extraction activities. 

The environmental impact of natural resource extraction can be an emotive topic. Inevitably, issues arise over activities that could damage – and have damaged – water supply, flora, fauna, tourism and agricultural livelihoods require careful analysis and mitigation. 

From the earliest stages, conservation must be a priority. Governments can mitigate environmental issues through the planning, design and implementation of physical, ecological and socio-economic measures. 

We have helped plan long-term environmental management in countries such as Afghanistan, Liberia, Cameroon and Papua New Guinea. 

The benefits derived from resource development can be broad and long-lasting. 

Many large-scale resource projects have contributed to society through employment, training and skills, the development of local supply chains, improved infrastructure, health, education, electricity, energy and access to services.  

Governments must plan for this wider impact and create a vision of the role of the natural resource sector in the country’s broader development strategies. Companies often need to create sustainable, functioning local markets that can drive economic development beyond the lifetime of a mining, oil or gas project.