Local Procurement Policies, Agreements, and Requirements
At a Glance
- Local procurement policies vary widely in form and content. Some are suggestions while others are mandatory. Some include specific lists of goods and services that extractive firms must procure locally, while others indicate a target percentage of local products in total procurement.
When designing local content policies and assessment systems, it is important to consider their implications. What are the estimated costs of compliance for extractive companies and local suppliers? What are the administrative costs for the regulator?
To support the development of policies, agreements, and requirements that foster local purchasing, it is important to ensure that targets and objectives balance ambitions for future growth with a realistic assessment of existing capacity in the local business sector.
- Developing a Transparent System for Local Contracting, A Manual for Practitioners Based on the eProcurement Experience in Chad (International Finance Corporation, Esso Exploration and Production Chad, Inc.)
- New Local Content Laws & Contractual Provisions, Case Study: Burkina Faso Mining (Columbia Center on Sustainable Investment)
- New Local Content Laws & Contractual Provisions, Case Study: Mali Mining (Columbia Center on Sustainable Investment)
- New Local Content Laws & Contractual Provisions, Case Study: Mali Petroleum (Columbia Center on Sustainable Investment)
- New Local Content Laws & Contractual Provisions, Case Study: Senegal Petroleum (Columbia Center on Sustainable Investment)
- Local Content Policies in Minerals-Exporting Countries (Organisation for Economic Co-operation and Development)
- Local Content, Trade and Investment: Is There Policy Space Left for Linkages Development in Resource-Rich Countries? (European Centre for Development Policy Management)
- Local Content Policies in the Oil and Gas Sector (Yahya Anouti, Osmel E. Manzano, Silvana Tordo, Michael Warner)
- Local Content Laws and Contractual Provisions (Columbia Center on Sustainable Investment)
- Alternatives to Local Content (Abel Kinyondo, Ivar Kokstad)
- Mines and Minerals (Government of Botswana)
- Local Content Policies and Corruption in the Oil and Gas Industry (Maíra Martini)
This resource examines the links between the oil and gas industry and the UN Sustainable Development Goals (SDGs), supporting a shared ...
Regulatory Structures and Challenges to Developmental Extractives: Some Practical Observations from Ghana
This paper explores the role of regulatory frameworks in promoting and accelerating transformation and development in the mining sector. ...
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 report discusses how developing nations can leverage extractive industries to meet the Sustainable Development Goals (SDGs), primarily ...
Developing a Transparent System for Local Contracting, A Manual for Practitioners Based on the eProcurement Experience in Chad
This manual aims to provide step-by-step guidance on effectively introducing a transparent system for local contracting. The eProcurement ...
New The End of the African Mining Enclave? Domestic Marginalization and Labour Fragmentation in the Democratic Republic of Congo.
This resource outlines literature on the African commodity global value chain (GVC). The authors challenge research that invalidates the ...
This guide helps exploration and mining companies to not only understand gender diversity and inclusion but also to implement programs, ...
This paper, part of the wider Local Content Guidance released by the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable ...
This report, created by the Columbia Center on Sustainable Investment (CCSI), summarizes Mali’s local content policies for the ...
Local procurement can be encouraged and enforced through a variety of means. These include (i) informal company commitments, (ii) formal agreements between investors and affected communities (such as community development agreements), as well as (ii) government requirements and policy provisions. These are wide-ranging in their approach. Some simply indicate that local purchasing should be prioritized; others—backed by regulations and other enforcement mechanisms—require companies to locally procure all or a target percentage of specific goods and services.
In general, all methods that set a target for local purchasing are useful in increasing the amount of locally produced goods and services. How such targets affect investors’ perceptions of a country, meanwhile, varies. Global experience shows that strategies to protect local businesses have positive, neutral, and in some cases adverse impacts on a country’s attractiveness to investors (adverse, if the requirements are not considered feasible). In addition, it is important to consider that measures seeking to increase local procurement beyond what the market dictates would normally result in short- and medium-term cost inefficiencies that in turn reduce taxable income and a country’s fiscal linkages. Overall, the competitiveness of local industries affects the efficiency and pace at which local content can be developed.