THE MINING INVESTMENT AND GOVERNANCE REVIEW (MInGov) IGF Annual General Meeting Martin Lokanc October 26, 2016 Geneva, Switzerland
The Mining Investment and Governance Review Funded by: Implemented by the World Bank with support from: 1
Outline I. MInGov: an introduction II. Results – the case of Zambia III. MInGov and the Mining Policy Framework IV. What’s next? 2
I. Introduction
I. MInGov: an introduction. Resource curse • Not inevitable – resources can launch accelerated and sustained development • Quality of institutions, governance and policy are instrumental in determining a country’s path. Resources can yield positive development outcomes, IF, “governance” is “good”. 4
I. MInGov: an introduction cont’d. BUT…. What is governance? “Governance” and “institutions” are incredibly vague terms with great importance. Which institutions matter, and which institutions matter most? 5
I. MInGov: an introduction cont’d. Objective: sector’s Strengthen the mining governance, investment environment and development impact. Implementation: At globally, but at a country level through interviews with stakeholders across the mining value chain. Primary data (interviews) complemented by secondary data to create a complete picture of key features of mining governance and investment environment. Audience: Internal and external. Consisting of (i) Governments seeking to improve the sector; (ii) Miners, mining services and investors seeking to make more informed investment choices; and (iii) civil society, including donors, to better understand the mining economy and how to ensure its greatest positive impact, nationally 6
I. MInGov: an introduction cont’d: Key points • Measures de jure vs. de facto performance • Designed to be actionable by governments • Neither a ranking nor index • Focus on sector investment attractiveness and bottlenecks is a core value-adding element 7
II. Results – the case of Zambia
II. Results: Zambia and the MInGov framework 9
II. Results: MInGov Zambia 10
II. Results: Zambia and the MInGov framework Country results dashboard: • Allows users to explore priorities for each country and by stakeholder group. • Absolute scoring of governance does not change – only size of the cells change. A LL STAKEHOLDERS 11
II. Results: Zambia Stakeholder Priorities G OVERNMENT 12
II. Results: Zambia Stakeholder Priorities C IVIL S OCIETY 13
II. Results: Zambia Stakeholder Priorities I NVESTORS 14
II. Results: MInGov Zambia - low hanging fruit? Intersection of the No. of Topics following items stakeholders • Rules for License Allocation and Geological Data CSOs, • Openness, Transparency and Independence of Licensing Process Government Government & • Industry 5 Tax policy, Instruments and State Owned Enterprise Rules Investors • Mining Taxation and State Owned Enterprise Financial Management • Sector Management and Intragovernmental Coordination • Political Stability CSOs & • Policies to Mitigate Environmental and Social Impact 3 Government • Human Rights, Employment Equity and Environmental Transparency • Cadastre, Geodata, License and Tenure Management Government & • Macroeconomic Stability 4 Investors • Skills and Human Capital Availability • Clarity and Harmonization of Sector Rules • Accountability of Processes, Compensation, Resettlement and ASM CSOs & Investors 2 Voice • Mining Tax Administration and State Owned Enterprise Governance • Local Supplier Development Government • 3 Predictable Mining and Tax Policy Civil Society • Budget Implementation and MFM Effectiveness • National Growth and Savings CSOs 2 • Budget Transparency and Accountability, and Public Integrity • Development Planning Investors 2 • Business and Investment Environment
III. MInGov and the IGF’s Mining Policy Framework
III. Synergies —IGF’s Mining Policy Framework • Voluntary partnership with 55 member countries • Designed to advance best practice across a range of issues related to mining • Framework is used to assess performance in IGF member countries across six thematic areas 17
III. Synergies - Motivation • MInGov unique methodology and approach, but there is shared objective with the Mining Policy Framework: Harness the full potential of the mining sector for sustainable development. • What are the synergies between MInGov and the IGF? 18
III. Synergies between MInGov and MPF • Topical coverage and scope. • MInGov includes very specific details and guidance to “quantify” governance. • MInGov is broader and deeper in some areas: cadastre, SOEs, and information of interest to investors (mining sector importance, cross-cutting themes) • However, MInGov is “light” in some other areas: education, community health, occupational health and safety, mine closures, ESIA for ASM’s, gender and environmental and social impact management. Gaps exist Significant Good Good Good Gaps exist Gaps exist coverage coverage coverage 19
III. Synergies between MInGov and MPF Country coverage: MInGov intends to cover about 80% of IGF member • countries Cost savings exist through joint missions and/or definition of a single • diagnostic tool. • Diagnostic cost savings. (Pilot joint mission in India or other.) • Possibility of single report • Country and stakeholder time and effort savings • Consistent messaging. Improved possibility for follow up support to countries: • • IGF diagnostic cost savings can be diverted for capacity building. Improved tool design through incorporation of multiple viewpoints. • • IGF perspective brings new insights into MInGov and improves its development. 20
IV. What’s next?
IV. What’s next? Product evolution: (i) Natural evolution of MInGov questionnaire and • framework to ensure complementarity with the MPF. (ii) Enhancements to MInGov methodology to improve replicability and robustness of results. (iii) Explore links between MInGov and SDGs. MInGov will continuously evolve with needs – learning by doing. Country coverage: • 7 countries covered so far: Zambia (online), Peru (online), Botswana • (online), DRC (draft), Mozambique (draft), Ghana (draft), Kenya (draft). 4 countries in progress: India (2 states), Nigeria, Indonesia, Laos. • • Pipeline: 8-12 in Latin America in partnership with the IDB + more in Asia and elsewhere. +Pipeline: OECD countries…. Canada, Nordic countries, more (in • partnership with academia). 22
IV. What’s next? Sustainability: (i) MInGov as a permanent World Bank product offering • like “Doing Business”; (ii) Continue partnerships with EITI, AMDC, IDB, Gov’t of China, and others to seek alignment and complementarity. 23
Questions? To find out more, visit: www.worldbank.org/mingov World Bank Group Martin Lokanc: mlokanc@worldbank.org Kelly Alderson: kalderson@worldbankgroup.org German Government (BGR) Adam Smith International Åsa Borssén: asa.borssen@bgr.de Michael Baxter: mbaxter@ozmozis.co.mz Julia Baxter: julia.baxter@adamsmithinternational.com
E1: Overview (extra slides)
E1. MInGov : Introduction cont’d (project structure) Broad World Bank Group representation throughout project structure: Technical committee: • EEX GP • GOV GP • Doing Business (DEC) Project team and inputs: • EEX GP • GOV GP • Doing Business (DEC) • Enterprise Surveys Group (DEC) 26
E1. MInGov : an introduction cont’d. (gap analysis) Sources Key Features Africa Mining Vision Vision of sector structure and role, broad value chain, limited (assessments) data/comparability though country governance based assessments Doing Business No focus on mining sector, all aspects of governance, country Survey comparability Voice and accountability, revenue transparency, limited country EITI comparability Broad value chain, government effectiveness and regulation, Fraser Institute perceptions based enterprise surveys, limited actionability Government effectiveness, political stability, regulations, limited McKinsey comparability Resource Focus on transparency, voice and accountability, cross-country Governance Index comparisons, public policy lens only Entire value chain, governance and investment focus, civil society MInGov views, actionable indicators 27
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