EXTRACTIVE INDUSTRIES LEGAL AND FISCAL REGIMES REVENUE MANAGEMENT

EXTRACTIVE INDUSTRIES: LEGAL AND FISCAL REGIMES, REVENUE MANAGEMENT AND GOOD GOVERNANCE Training Workshop May 16, 2007 Overview of Extractive Industries Governance Michael Levitsky (COCPO)

EI Training Workshop • Why are we here? – What is special about EI? • A few thoughts on “governance” – And overview of agenda • Special topic – Advertising break

Governance of EI • Governance of EI is important, but so is governance of all major economic sectors. • What is special about EI? – – – – Exhaustible resources Belong to all citizens Large revenues Large investments Long term projects Volatility of prices and revenues Uncertainty in project outcomes Environmental and safety risks

Five Universal Principles of Good Governance Source: Good Governance of the National Petroleum Sector, Chatham House, Apr 2007 http: //www. chathamhouse. org. uk/pdf/research/sdp/ggdoc 0407. pdf

A Generic Demarcation of Functions Between Principal Actors in the Petroleum Sector Source: Good Governance of the National Petroleum Sector, Chatham House, Apr 2007

Governance as an Emergent Phenomenon Governance Not simple Hard to quantify Legal-Fiscal Framework Institutional Framework Revenue Management Environment Transparency Communities In Agenda

Governance is a Process

Good Governance is a result of getting all the individual components to work and connect: it is not simple, easy or quick. Chatham House has 40 Petroleum Governance Benchmarks Legal-Fiscal Framework Institutional Framework Revenue Management Environment Transparency Communities

Commercial Break

Petroleum Governance Initiative Background • In context of Norwegian Oil for Development Initiative • Enhance cooperation between the World Bank and Norway • Address issues additional to Norway’s programs • Coordinate work across World Bank range of skills • Broaden scope of country interventions • US$6 million over two years

PGI: Three Pillars P. G. I. Sector Governance Environment Community Development

PGI: Strategy Ø Practical Ø Focused Ø Sustainable Ø Innovative

PGI: Governance Pillar Goals • Develop and disseminate best practice in Petroleum Sector Governance • Combine World Bank’s sector (COC) and broader economic skills (PREM/DEC) • Integrate Norwegian experience of oil and gas sector management • Provide comprehensive WB assistance to several countries, complementary to Norway • Activities: Seminars, publications, technical assistance

PGI: Governance Pillar Proposed Activities 1. Oil and Gas Governance Sourcebook • • Book covering all aspects Written by specialists, discussed at seminars 2. Actionable Indicators for “Oil and Gas and Economic Development” • • Designed to provide benchmarking tool for countries with oil and gas resources Resource Curse” diagnostic and prevention tool 3. Thematic Group on “Extractive Industries and Economic Development” Please join ! • • Based on WB Thematic Group concept Bring together sector specialists, economists, others 4. Country Activities

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