sharing in governance of extractive industries
Extractives: institutional partnerships to build capacity and strengthen trade relations
Following the results of the referendum in June 2016, the wheels are firmly in motion for the UK’s exit from the European Union. Brexit is happening, and securing trade relations with priority countries is at the top of the agenda. It is time to focus on a new model to leverage aid and channel trade partnerships.
The UK is a global financial centre for the mining industry, underpinned by gold standard regulatory and legal frameworks; four of the top five leading global mining companies are listed in London. Coupled with the numerous support services housed in the UK – insurance firms, academic and research organisations, engineering and infrastructure companies – this positions the country as a major hub for industry skills, knowledge, and expertise.
For many developing countries, the extractives industry will be the catalyst for inclusive economic growth and poverty reduction – if managed properly. While the intention to grow their industries may exist, the skills and capacity to do so are often lacking. This presents a mutually beneficial opportunity. UK organisations, both public and private can partner with organisations in resource-rich developing countries to build relationships, offer knowledge and advice, and build their capacity. In return, the UK can promote British expertise across the world, leading to increased trade opportunities.
It is apparent that the UK’s mining industry, steered by the International Council on Mining and Metals (ICMM), is pushing in this direction as well. “Long-term partnerships will promote prosperity for both parties [the UK and resource-rich countries],” says Aidan Davy, the COO of ICMM.
The newly-formed relationship between the British Geological Survey (BGS) and the Ministry of Mines and Energy in Myanmar is an example of an effective partnership. Since the beginning of this year, BGS has been providing geoscience expertise to Myanmar from the universities of Oxford, Heriot Watt and Dundee. Given the mutually-beneficial outcomes for both countries, it is hoped that this partnership will strengthen UK-Myanmar relations. Some UK institutions, such as Her Majesty’s Revenue and Customs (HMRC), are already involved in partnerships and could expand into extractives-related activities.
What are the key features of a successful partnership model?
1| Focus on areas where there is an overlap between developmental priorities for recipient countries and areas of commercial interest and competitive advantage for UK trade and investment.
2 | Ensure support is firmly aligned to the needs of counterpart organisations.
3 | Be clear that partnerships are intended to provide benefits beyond technical knowledge transfer, and that they require investment of time and thought on both sides.
4 | Ensure the request for support matches the actual requirement and has been correctly translated into an intervention. The use of smart and informed organisations to support on this is critical.
5 | Enable the institution – not the individual – to benefit from a partnership. Training programmes, delivered in-country and in-house, followed by an international adviser embedding themselves for a number of months in a ministry facilitates substantial knowledge transfer.
6 | Facilitate trust through continued engagement by international advisers following in-country training and a number of months in the counterpart institution. This will foster meaningful twinning and mentorship once he or she has returned to the UK.
7 | Consider the type of individual best suited to the role. An older individual might have more gravitas in counterpart institutions, for example. However, a pairing of complementary skills and personalities may be most appropriate.
8 | Communicate the (expected) benefits and outcomes. Ensure that stakeholders in the recipient country and in the UK are aware of the positive impact. This will achieve senior level support for the activity.
There is a clear need on both the demand and supply side for such partnerships to be established, and it is evident that the benefits are likely to be mutual and significant. The UK can offer its partner countries world-class sectoral expertise to give them the skills to effectively manage their natural resources. Good governance of the sector will put developing countries on a path of fast growth, and one which graduates from aid. Furthermore, delivering on the UK government’s manifesto commitment to boost partnerships between UK institutions and their counterparts in the developing world will secure trade relationships providing opportunities and benefits for UK business and the UK economy as a whole.
Authored by Isabella Gerber (Manager, Adam Smith International), this blog was also posted on The Guardian website.
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