- Shared Use of Extractives Infrastructure and Resource Corridors
- Sharing Information and Communications Technology
- Framework for Implementation
Framework for Implementation
At a Glance
- Environmental and water regulations should enforce a zero tolerance policy on environmental waste and discharge of effluents, while limiting the quantities and sources of fresh water that companies can extract.
- It is fundamental to ensure that an institutional setting that enforces and monitors water rights is in place.
- For any extractive initiative to be viable and sustainable, a water tariff must be payable.
- In scenarios where a company is unlikely to consider sharing any water infrastructure, the provision of water supply services by an extractives company could be part of an integrated CSR policy, i.e. by financing low cost water supply and treatment technologies.
Depending on the situation, the type of policy needed to incentivize the buildup of ICT infrastructure for shared use will vary. A Framework to Approach Shared Use of Mining-Related Infrastructure details the regulatory frameworks that are needed to support ICT-extractive synergies.
The preconditions and key considerations for various regulatory frameworks are described below:
Cross Cutting Regulatory Preconditions in Shared Use
To allow for shared use, there is a need for a clear and sound legal framework supporting public private collaboration around infrastructure investment, authorizing private sector participation in the delivery of infrastructure services, and stipulating fair and anti-discriminatory open access. Creating an independent regulatory body is also considered best practice. This body can act as an ad-hoc (perhaps international) expert committee if there are not enough resources to have a standing body. In this context, it is advisable to have a contractual regime authorizing long term agreements. As with the other shared use arrangements, extractive projects can be leveraged by serving as anchor demand for an infrastructure provider. Having a long-term agreement with an extractive project under the form of a take or pay agreement, for instance, will make the infrastructure project bankable by providing certainty of revenues to the infrastructure provider. The regulator must manage risks, monitor contractual obligations with telecommunications companies, and effectively regulate access.
Open Access Policy
A policy of open access, available on transparent, non-discriminatory terms, and at fair prices is a necessary pre-condition for sharing infrastructure. In the context of open access, an important challenge faced by regulators is maintaining enough competition in the market as well as incentives for investment in new infrastructure. Extractive companies that build the infrastructure may reduce future investment in additional capacity if their facilities are open to telecommunication service providers at low rates, particularly in remote areas where the economic rationale for building additional infrastructure is weak. However, if access prices are too high, telecommunications service providers will either not enter the market or will choose to install their own networks, resulting in inefficient duplication of infrastructure. Government can address these issues by implementing a regime in which other companies seeking to access the infrastructure can do so on reasonable terms. The best solution is often a light-touch regulatory approach, which lets the parties negotiate first, and in which the regulator steps in only in case of disagreement.
Efficient, clear, affordable and flexible licensing processes are important to allow and incentivize extractive companies to expand ICT services, which are already outside of the scope of their main activities. The categorization of licenses can impact incentives significantly. Traditional licensing has typically required separate licenses for different technologies as well as for different types of services. To increase efficiency and incentives for companies, governments are increasingly allowing flexible use, particularly through technical and service rules by adopting technology and service neutrality. To increase flexibility in the licensing process, regulators have also begun to adopt more unified frameworks to reduce the number of authorizations needed to carry out several activities (mobile phones, internet, broadcasting, etc.). If it becomes clear that licensing is a barrier that reduces the potential to leverage the use of extractive operations’ ICT infrastructure, regulatory agencies may consider a license exemption in certain cases.
Infrastructure Sharing Framework
Infrastructure sharing can be incentivized in a number of ways:
- Efficient use of resources: Towers, ducts, and rights of way can be shared for installations that serve a similar purpose, allowing for optimal use. Regulators could increase incentives for additional investment in infrastructure by making such resources and rights of way readily available, especially in public property. They might take measures such as limiting the fees charged and simplifying the legal process involved. The coordination of resources can in this way avoid duplication and wastage of capital expenditure. For an example, see Section 41 of Liberia’s Telecommunications Act of 2007 on co-location.
- Access to passive infrastructure: It is possible for regulators to instate formal rights which allow carriers to access passive infrastructure owned by a non-carrier. For instance, if an extractive company, or the owner of the mining railroad or a petroleum pipeline, is not a licensed carrier, then a carrier may use their infrastructure to add optical fiber at a lower cost. This might make the realization of synergies between the extractive companies and service providers clearer. For an example, see Part 20A of the Telecommunications Act of Australia.
- Transparent processes: Market players need to know what is available for sharing under clearly established terms and conditions to be able to work on synergies and mutually beneficial arrangements. Regulators could require online publication of the details of existing as well as future infrastructure installations available for sharing. Transparency could be facilitated by the creation of a one-stop-shop institution for infrastructure sharing to promote the coordination of civil works between telecommunications companies, as well as between telecommunications companies and utilities/extractive-related construction companies.
For an example, see the case of Poland, which developed a centralized portal (pages 98 and 158).
- A Framework to Approach Shared Use of Mining-Related Infrastructure (Nicolas Maennling, Alpa Shah, Sophie Thomashausen, Perrine Toledano)
- Cross-Sector Infrastructure Sharing Toolkit (McMillan Keck Attorneys and Solicitors, The Columbia Center on Sustainable Investment)
- Leveraging Mining Demand for Internet and Telecommunications Infrastructure for Broad Economic Development: Models, Opportunities and Challenges (Clara Roorda, Perrine Toledano)