At a Glance
How policy makers define the term “local” depends on the specific policy objectives they hope to achieve.
- Clarifying the definition of local across categories and sectors informs both public policy and corporate activity.
- Economic benefits of local procurement vary based on context and policy priorities.
- A Practical Guide to Increasing Mining Local Procurement in West Africa (World Bank, Kaiser Economic Development Partners)
- Guide to Getting Started on Local Procurement (International Finance Corporation)
- Local Content Policies in the Oil and Gas Sector (Yahya Anouti, Osmel E. Manzano, Silvana Tordo, Michael Warner)
- Mining Local Procurement Reporting Mechanism (Mining Shared Value, Deutsche Gesellschaft fur Technische Zusammenarbeit (GmbH))
This document provides policy context, guidance, and tools to support local procurement in West Africa’s mining sector. The resource ...
This report introduces local content policies (LCPs) and looks specifically at practices meant to promote the growth of economic links from ...
This resource examines the links between the oil and gas industry and the UN Sustainable Development Goals (SDGs), supporting a shared ...
These guidelines serve as a practical policy tool to increase women’s economic empowerment in African countries through increased ...
This policy brief examines barriers to women’s economic empowerment in Sub-Saharan Africa, with the aim of mobilizing private sector ...
This paper, part of the wider Local Content Guidance released by the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable ...
The term “Local” , in the context of procurement, is defined in a variety of ways around the world, according to context-specific needs and priorities. Clear definitions are fundamental to developing policy and programming to increase local procurement. The clearer the definition, across supplier categories, the more useful it will be to policy makers and extractive companies.
In recent years, several overviews of global best practices in the extractive industry have been published. Policy makers may find it helpful to review these when developing a definition of local. There is no right or wrong definition. What is considered local depends on the policy objectives that a government wants to achieve. For example, the rather complex classification system used in Indonesia’s oil and gas sector constrains the ability of companies of certain sizes to bid for contracts of certain values. Additionally, particular types of goods and services are prioritized by the government, which does the most to support the development of local capabilities considered to be sustainable and competitive in the long term. By contrast, the lack of ownership requirements in Brazil’s and Kazakhstan’s oil and gas sectors is consistent with these countries’ objectives to fast-track the transfer of knowledge and capacity by leveraging foreign investment. In line with Malaysia’s policy objective to become a regional hub for oil field services and equipment, policy makers have relaxed ownership requirements so that locally incorporated suppliers of oil field services and equipment may be foreign owned. This is meant to incentivize inward investment and the transfer of technology in a sector where high-end technical solutions are the realm of a limited number of global oil service companies .
The economic benefits of local procurement vary based on the specific context and policy objectives.