IGF releases guidance on local content policies

A new toolkit developed by the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) aims to help resource-rich countries find more sustainable and inclusive economic solutions, fostering stronger linkages between mineral resources and the rest of the economy.
The IGF Guidance for Governments focuses on local content policies and strategies created by governments requiring mining companies to utilize local goods and services when operating in another country. It also highlights how countries can move away from commodity dependency and diversify their economic base. Local content policies are being utilized more often by governments, particularly as they review or revise their mining and investment codes and contracts.
“An estimated 90 per cent of resource-rich countries employ some sort of local content policy. But in countries where there are only a few other strong sectors, the success of these policies is critical,” said Greg Radford, Director of the IGF. “However, it remains unclear which local content policies work best, produce results and minimize unintended consequences. Our Guidance for Governments takes these on-the-ground realities into account.”
There is no one-size-fits-all solution with local content policies. Each country has different resource endowments, different skill sets in their supply and labour force, and different infrastructure assets and investment environments.
“The success of these local content policies depends on the success of other policies and regulations, such as education, science and innovation, infrastructure and finance,” added Radford.
The responsibility for these critical issues is spread across multiple ministries and requires effective coordination and coherence, which the IGF Guidance for Governments takes into account by guiding policy-makers towards workable made-in-country solutions.
The guidance document also covers three cross-cutting themes: ensuring goals are achieved in a gender-equitable way; exploring the relationship between local content policies and countries’ obligations under trade and investment law; and exploring the implications of technological advances on the success of local content policies.