There are close links between politics and the management of extractives such as oil, gas and minerals. Along the extractive industries value chain politicians are involved in setting the legal framework, allocating exploration and production licenses and deciding on the saving and spending of extractive revenues.
In resource-rich countries with fragile democratic institutions there can be strong incentives for bribes to flow between politicians and companies in return for or anticipation of favors. Abundant natural resources can also reduce the immediate need for taxation, which can decrease accountability by the government/ruling party to citizens as shown by research.
Political parties have an important role to play in managing natural resources. As they have the mandate to aggregate citizens’ demands, interests and concerns and bundle them into policy alternatives and decisions. Therefore, they should ensure that natural resource governance responds to citizens’ demands while benefiting the country as a whole rather than a few individuals.
How should parties approach extractive industry policy?
Develop clear and implementable policy positions.
Political parties make promises to citizens through their electoral manifestos on how they will transform a country’s natural resources into sustainable development. Unfortunately in many countries, these promises are often based on political calculations for electoral victory rather than clear internal policies resulting from internal discussion. Political parties should develop clear, well-thought policy positions through robust inter-part debate. This increases the likelihood of winning voters’ trust as well as enhance delivery of government programs.
Co-operate across party lines.
Political competition through elections and debate on the floor of parliamentary chambers are important for any democracy, but equally so is collaboration between political parties for building consensus on sometimes complex socio-economic issues.
Extractive resources like oil and minerals are limited and tough decisions about how to invest revenues for social and economic development in the long run are essential in order to avoid waste. In addition, these industries require huge upfront investment for long-term extraction. Therefore, the degree of political consensus is very important to investors.
Broad agreement on the regulatory framework for extractives increases ownership by the ruling and opposition parties and reduces the risk of reinventing policies and laws every time a new government comes into power.
Policy development tools for extractives
International IDEA and the Natural Resource Governance Institute (NRGI) are collaborating on a project to support political parties to play a more constructive role in improving the democratic management of natural resources. The two organizations are currently developing a step-by-step guide to political parties on how to organize and manage internal discussions on party extractive policies.
Drawing on International IDEA’s Strategic Planning Tool for Political Parties and NRGI’s Natural Resource Charter Benchmarking Framework, the new tool is currently being used in a project involving all four parliamentary parties in Ghana. After the piloting phase, lessons learned will be incorporated into the tool for further improvement before its publication in 2016.
A pilot project in Ghana
The Ghana project aims specifically at providing support for the development of authentic policy positions on oil and gas issues ahead of the 2016 parliamentary elections. The long-term goal is to enable interparty dialogue and consensus around a national vision and strategy for extractives management.
In October, we gathered for an initial policy development retreat, where over the course of four days political parties discussed and carefully drafted policy positions. The retreat exposed some of the general challenges that parties face in developing policy positions. Bernard Mornah, General Secretary of the People’s National Convention (PNC) explained that even within internal party processes, it has never been easy to come together on one particular subject area for policy discussions. “And so we think that this project contributed enormously by facilitating deep discussions”, he said “The high-level party representation at this particular forum tells that all of us are excited about this policy development process, despite the challenges that we face - most parties have very limited knowledge of the oil and gas industries.”
With regards to the challenge of interparty dialogue, Hajia Hamdatu Ibrahim Haruna, first Vice-Chairperson of the Convention People's Party (CPP) said the retreat had helped to show political parties what is possible. “Based on the questions that the methodology asked us to answer, I think this policy development retreat has really broadened our horizons on how to think about the management of oil and gas. You cannot say ‘this is the position of my party and I am not going to change it.’ It is a give and take. We have to find a middle way that all parties can buy into, whatever our ideologies.”
Additionally the overall methodology was well-received by participants, as Dr. Kwame Ampofo, Chairman of the Board of the Ghana Energy Commission and a former Member of Parliament for the National Democratic Congress (NDC) explained: “The policy development retreat has even made us look at our own party ideology, our vision. We were at a loss when we needed to state them. We went back to our party constitution, and old and current manifestos, and then we even took statements on oil and gas from former NDC presidents and the current president, because you cannot have a position right now that is at variance with previous standpoints. So it was a very useful exercise and I personally think that I have become a better NDC member than I used to be.”
Kwadwo Afari, Policy Analyst for the New Patriotic Party (NPP) said he hoped the debate would continue after the retreat. “If we are able to move from partisan political positions and try to look at extractives from a national point of view, we will decisively influence policy outcomes. I hope the courage from this debate will go on beyond the project.”
IDEA and NRGI will finalize the pilot project in December 2015 with a media presentation of the policy positons by each political party.
Femke Brouwer is NRGI’s parliamentary capacity development officer. Frank Kayitare is International IDEA’s programme officer, political parties. Catalina Perdomo is International IDEA’s programme officer, democracy and development.