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The quality of governance the largest oil and gas
and the use specific govern- companies are explicitly
ment policies and institutions committed to relevant inter-
of the host country are a national initiatives. This is
determining factor for particularly
true
for
ensuring sustainable develop- companies from developing
ment gains from oil and gas and transition economies.
extraction. Governments of Until more companies partici-
the oil-producing countries pate in them and abide by
need a clear vision and their commitments, the
strategy to ensure that their impact of these laudable
resources are used in a initiatives will be limited.
productive, transparent and
equitable manner. They also Most important multi-
need to strengthen their stakeholder initiatives in this
abilities and capacities for area have been established
discharging well-designed only in the past decade. These
policies. include the Extractive
Industries
Transparency
Home-country governments Initiative and the Voluntary
should promote responsible Principles on Security and
behaviour by TNCs investing Human Rights. Civil society
in extractive industries abroad has played an active role in
and assist the host countries in promoting these initiatives
developing sound policies and should continue to contri-
and institutions. This is equal- bute expertise on economic
ly important when the home and environmental as well as
State is also the owner of the human rights issues, as well
investing company. Norway as monitor the actions both of
represents best practice. First, governments and companies.
Figure 2. Selected foreign production locations of oil and gas
Statoil its state-owned oil
TNCs from developing and transition economies, 1995 and 2005
company has been a pioneer International organizations,
in terms of revenue transpa- including UNCTAD, must
D e V e I o p m e n the existing players but put
rency. Second, through its Oil also play their part. We can
opportunities and policy the oil-producing countries in for Development programme, help facilitate learning
implications a stronger bargaining posi-
the Norwegian Government opportunities from studying
tion. Unsurprisingly, many
is cooperating with more than and comparing the positive
For a number of low-income governments have in the past
20 countries in areas such as and negative experiences of
but oil-rich countries, the couple of years taken action
legal frameworks, admin- different countries. The inter-
current commodity price to increase their share of the istration, licensing, industrial national community can also
boom presents a unique revenue generated from the
development, environmental be instrumental in the
chance to generate revenues extraction of natural
challenges and revenue development of standards and
needed to invest in education, resources.
management. Thirdly, in guidelines and in promoting
health and infrastructure with
September 2007, Norway the use and adoption of
a view to alleviating poverty. However, seizing the became the first major home existing tools to help ensure a
In Angola, for example, the development opportunities
country to announce that it more development-friendly
taxes paid by one single from natural resources is not will implement the Extractive outcome of extractive
foreign (Norwegian) oil straightforward. Too often in Industry
Transparency
activities.
company, Statoil, amount to the past, windfall gains from
Initiative at home. More
almost as much as Norway's oil have been used in a less
countries should follow By
total bilateral official develop- than optimal way from a Norway's example. Torbjörn Fredriksson,
ment assistance to the entire development perspective. It is
UNCTAD
sub-Saharan Africa. therefore important to ensure The role of the oil companies
that the current window of
themselves is to contribute to Note. World Investment
Transnational oil companies opportunity is not wasted. In efficient production while, at Report 2007 can be downloa-
account for a particularly high this process, the oil-producing a minimum, respecting the ded free of charge at
share of oil production in poor countries themselves have the laws of the host country. www.unctad.org/wir.
countries. For example, in prime obligation to protect the
When reserves are located in
Equatorial Guinea their share development interests of their
weakly governed or authorita-
was 92% in 2005 and in people. But home countries, rian States, they need to
Angola and Sudan it the oil companies as well as
consider carefully the
exceeded 60%. The rise of civil society can also
implications of investing.
new overseas investors may contribute.
However, relatively few of
imply new competition for
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