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THE NIGERIA NATURAL RESOURCE CHARTER

The Charter is a set of principles for governments and societies on how to best harness the opportunities created by extractive resources for development. It is not a recipe or blueprint for the policies and institutions countries must build, but instead provides the ingredients successful countries have used. Explore the Charter here. Download the Charter here.

PRECEPT 1

Resource management should secure the greatest benefit for citizens through an inclusive and comprehensive national strategy, a clear legal framework, and competent institutions.

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The Twelve Precepts

Resource-rich countries have a great opportunity to harness their natural wealth for transformative and sustained prosperity. But if mismanaged, resource extraction can impose severe costs on a country. As stewards of their extractive resources, it is typically the responsibility of governments to manage those resources for current and future generations.

Effective and sustainable resource management requires an inclusive and comprehensive national strategy. To achieve this, the government must make a series of key decisions that will affect different groups and set choices extending far into the future. To avoid making decisions in a piecemeal fashion and to build a shared sense of direction, governments should, in dialogue with stakeholders, use a national strategy process to guide extractive resource management decisions.

The national strategy should take a long-term approach, recognizing the fact that the transformation from wealth in the ground to wider societal benefits can take many years, and present many challenges and surprises along the way. If citizens are concerned about the welfare of their children and future generations, they should recognize that these future generations have a right to benefit from resource extraction and to be shielded from its inevitable impacts.

A national strategy is more likely to be successful if it is the product of inclusive processes that are open and participatory. A plan debated in public will expose policy conflicts and inconsistencies sooner, constrain self-dealing and corruption, and render inevitable course corrections less disruptive. Decision makers should seek to incorporate the inputs of other stakeholders, ranging from government departments, parliament, and citizens directly affected by extraction, to civil society more broadly, as well as the extractive companies and private sector businesses in general. These groups provide the necessary understanding of issues that must be addressed in the planning process.

See Precept 2 on the role of civil society in holding government to account.

Because the extraction process can last many generations, decisions made in the present must be robust to the cycles of governments. This calls for building understanding and consensus from a critical mass of informed citizens. Actors outside the executive, including legislators, journalists, and civil society groups are guardians of the strategy, playing a scrutinizing role by holding decision-makers to account.

Taking a comprehensive approach provides governments with a framework to understand and better implement initiatives in the extractive sector. This should involve linking upstream and downstream industry decisions, environmental and community issues, the management of government revenues, and wider economic concerns.

Within the government this requires coordination and an authorizing environment across ministries of mines, energy, finance, planning and beyond. Given the intrinsically linked and overlapping challenges, inter-ministerial coordination is necessary. Strategic direction may best come straight from the executive office; alternatively, an overarching body representing each ministry may be useful in coordination and implementation.

Too often the transformation of resource wealth into prosperity fails not because of a lack of the correct economic policies, but because of a weak underlying system of governance. A successful strategy therefore not only requires an understanding of the economics, but also an appreciation for accountability, the structure and capability of government institutions, and the relationship with civil society.

Opening up a country or a specific region within the country to exploration and extraction may not always be the best course of action. Negative impacts may outweigh the overall positive impact on the region home to production and the country more broadly. The potential economic beneifts of extraction however are often very large when viewed at the level of all citizens in the country. Governments can use tools such as strategic environmental assessments to help account for environmental impacts within the wider strategy-making process before irreversible decisions are enacted at project sites. If the costs are too high, it may not be feasible to replace the environmental value that is lost, or adequately compensate those adversely affected. In such cases countries may opt not to extract.

As part of this assessment, the government should consider the structure and capacity of the institutions and sectors that are expected to manage the processes along the decision chain, and may conclude that a country’s economy or governance system is not yet ready to effectively manage large windfalls. Staggering the timing of exploration and extraction may be one option in this case; it allows the staff of government institutions to learn from experience while managing their workload.