Transcript RBM and OrgDevt for Ministry of Defense

Facing the Resource
Curse:
Norway’s Oil for
Development Program
Presentation, Evaluation Report
Oil for Development Evaluation
Oslo, 31 January 2013
Oil for Development: The Goals
 Operational Objective:
• “Economically, environmentally and socially responsible
management of petroleum resources which safeguards the
needs of future generations”
 The Concern: “Transform Resource Curse to Blessing”:
• “Oil should be a blessing, not a curse. This means that
petroleum revenues should be used to provide essential
services for the many, and not be allowed to disappear into
the pockets of the few; local communities should experience
new economic opportunities from petroleum activities and
not have their environment threatened…” (OfD 2008, p. 3)
 Broad political consensus 2005: Designed by out-going
Centre-right government – implemented/amended by incoming Red-Green government
Oil for Development Evaluation
Oslo, 31 January 2013
1
OfD: A Flagship Program
 Building on petroleum sector support
• Sector assistance since 1980s to several countries
• Evaluation 2006: good results in emerging-, limited in mature oil
economies; good management, legal results; flexible; too limited in
scope: need to address larger resource management dimensions
 2005: Oil for Development (OfD) approved:
• Broad consensus: include public finances, environment; program
managed from own Secretariat in Oslo; based on demand-driven
requests; focus on locally-owned capacity development
• Built around three “pillars”, sharing Norwegian experience/
public services, strong political support through 4-ministry
Steering Committee led by MFA, governed by “R-notat”
 OfD addressing strategic sector at policy, institutional,
organisational levels across the globe
 OfD most visible program providing Norwegian expertise
Oil for Development Evaluation
Oslo, 31 January 2013
2
OfD: Rapidly growing program (mill NOK)
350
18
16
14
250
12
200
10
150
8
6
100
Number of countries
OfD Disbursements, mill NOK
300
4
50
2
0
0
2006
2007
2008
OfD
2009
Core countries
2010
2011
2012
Non-core countries
 OfD now just above 1% of Norwegian aid
 Most important petroleum governance program globally
 Number of OfD countries falling
Oil for Development Evaluation
Oslo, 31 January 2013
3
Important Results Produced
 Most consistent achievement: institutional development
• Modern legal framework, regulatory regimes/institutions, allocation/concession policies, reporting systems in place/improved
• Implemented/operationalised through organisations/ offices with better
capacities, performance, ownership/leadership
• Gains fragile, thin: capacity to reproduce capacity often lacking 
improved public sector skills move to non-state actors
 Resource pillar most solid, finance pillar facing high
demand, environment pillar evolving:
• Petroleum pillar w/ long history, experienced Norwegian actors (NPD,
Ptil, Petrad); strong and interested local counterparts
• Finance pillar: limited to MinFin staff due to concerns about quality of
advice in sensitive policy areas; working w/ IMF, Tax for Dev’t; wish to
limit engagement to two states due to own capacity constraints
• Environment pillar: most recent; complex field w/ often weak local
counterparts; CSO involvement often sporadic, not integrated into OfD;
programs evolving but still agreements lacking, results very incipient
Oil for Development Evaluation
Oslo, 31 January 2013
4
Outcomes, Resource Pillar
Resource Management Pillar
Institution level
Structure of sector
clear
Laws, policies and
regulations in line with
good int’l practice in
place
Organisation level
Appropriate public
sector bodies in place
with adequate
structure, staff,
resources, mandate
and contact to OfD
program
Mozambique
Timor-Leste
Uganda
Ghana
South America
Structure in
sector good
Ok,
Structure
Formed
Structure formed
Bolivia: New Pet Law
in parliament
Frameworks –
laws, reg’ions –
largely ok being
updated by Moz
staff with only
some NPD
support
Public sector
bodies in place,
staffing and
mandates ok.
Twinning with
NPD working
well
National ownership
Positive
Strong national
political commitment to
structure and
functioning of sector
Confidence
strong but now
huge finds in
north means
actors, forces
rapidly
changing
National actors feel in
charge of sector
dynamics
Started , but
regulations are still
missing
Ok, but uncertain
sustainability,
Minimum critical
mass of staff in
place, but
vulnerable. Still
huge task in staff
training, and in
securing resources
Revising Pet.
Law, most
regulations
missing, not
passed
Pet. Law in
Parliament –
Regulations
missing
Ok
New law on
Petroleum
More staff than
supervision, only
TL and better
head appointed
recruiting
no staff
ground.
Twinning ok
Very good
recruiting
possibilities
compared to
other countries.
Positive
Positive
Positive
Confidence
strengthened, but
still dependent on
advisors
National actors
feel quite
confident
National oil
company Yes,
but government
offices No
Oil for Development Evaluation
Oslo, 31 January 2013
Ecuador: no legal
effect.
Nicaragua: Legal
framework established
1998
Bolivia: ANH in place,
twin with NPD,
depending on passing
Petroleum Law.
Ecuador: Run by
TNCs, wish to change.
Nicaragua: Twin to
NPD, lack capacity in
production phase
Bolivia and Ecuador:
Companies try to
maintain power
Nicaragua: Positive
Yes
5
Outcomes, Revenue Pillar
Resource Management Pillar
Institution level
Structure of sector
clear
Mozambique
Timor-Leste
Uganda
Ghana
South America
OfD has not
contributed
Significant
contribution from OfD
although tax
management needs
further strengthening.
Weak institutions and
governance context
represent challenges
Too soon to see
significant
contribution from
OfD.
OfD – no
significant
contribution
OfD has had no
significant
contribution.
OfD no
significant
contribution
Significant
contribution within
MoF, Central Bank,
some achievements in
petroleum tax unit.
High vulnerability to
turn-over and critical
mass of adequate
counterparts still not
in place
Limited support
towards specific
activities. First step
taken to define
needs
No significant
contribution from
OfD
Some useful policy
advice and
analytical work
Strong
Strong
Strong
Strong
Not assessed
National actors
including civil
society strongly
engaged
Strong civil society
in most of the
countries
Laws, policies and
regulations in line with
good int’l practice in
place
Organisation level
Appropriate public
sector bodies in place
with adequate
structure, staff,
resources, mandate
and contact to OfD
program
National ownership
Strong national
political commitment to
structure and
functioning of sector
National actors feel in
charge of sector
dynamics
MinFin in charge in
public sector,
(Tax for
As capacity increasing
Parliament in
Development so is also feeling of
debate with
active in
being in control and
presidency
Moz)
able to set the agenda
Oil for Development Evaluation
Oslo, 31 January 2013
6
Outcomes, Environmental Pillar
Resource Management Pillar
Institution level
Structure of sector
clear
Mozambique
Timor-Leste
Uganda
Ghana
South America
Environmental
regulation
reasonable.
Legislation in
place.
Subordinate
regulation is
lacking.
Special
environmental
policies/
legislation/
regulation have not
been drafted/
amended.
Current
regulations
inadequate for
environmental
protection of
Agency’s oil and
gas functions.
Quite good legal
framework but
very limited
implementation
Lack
fundamental
environmental
capacity.
Capacity
overburdened.
Relatively strong
administration.
Frequent shifts in
administration.
Weak co-ordination
between Ministry
and Environmental
Commission and
Norwegian
agencies.
Ambitious program
coordinated with
Norwegian
Climate and
Pollution Agency
Only sporadic
Norwegian
cooperation/
follow-up
Laws, policies and
regulations in line with
good int’l practice in
place
SEA/IEA/compliance
monitoring systems
still inadequate
Organisation level
Capacities weak in
view of large offshore finds.
Appropriate public
sector bodies in place
with adequate
structure, staff,
resources, mandate
and contact to OfD
program
OfD support
integrated into wider
frame of capacity
development coordinated by MICOA
and Netherlands
National ownership
Strong national
political commitment to
structure and
functioning of sector
Joint new cooperation
agreement to be
developed.
Oil for Development Evaluation
Long term OfD
advisors in
place.
Weak government
participation.
Extra efforts need
to be made.
Long term OfD
advisor helped to
push program
forward.
Roles of official
bodies to be
clarified.
Oslo, 31 January 2013
Role of
Norwegian
Embassy section
to be clarified/
specified
7
Sector Governance: Growing Challenges
 No. of petroleum economies up, many in fragile states:
• Studies note democracy reversals due to “oil curse”: elites,
companies collude to share economic rent, hide taxable incomes
• Oil is particularly vulnerable to elite capture  danger that
more efficient state means more rent seeking/corruption
 Does petroleum sector create negative gender effects?
• In public sector, women seem to do well – in private sector/
production fields, male bias
• Real challenge: petroleum “crowding out” sectors important
to women?  Need to re-think gender strategies?
 Need much more knowledge about sector fundamentals
 OfD needs to put governance at centre of program
 OfD will thus need strategic alliances at national, international levels, including with non-state actors
Oil for Development Evaluation
Oslo, 31 January 2013
8
Pillar Structure: Strengths and Rigidities
 Pillar structure reflects current Norwegian public sector:
• Makes the three OfD dimensions visible, clear, strategic
• Eases mobilisation of Norwegian public “pillar”-skills but
creates barriers to entry for others – need other agreements
• Local roles/tasks (Health/Security/Environment), monitoring/
reporting, IEA/SEAs often not aligned with OfD pillars
• Overarching (governance) issues not a pillar responsibility
 Norway: aid partner  business actor – issue?
• Concern that OfD not advise in areas of private sector action
since Norway (Statoil) may appear conflict-of-interest  OfD
not supporting areas of key interest to partners  Dilemma
 OfD structure the best for providing services?
 OfD covering all critical needs along value-chains when
deciding issues to address?
Oil for Development Evaluation
Oslo, 31 January 2013
9
Technical Cooperation (TC)
 Organisational twinning: Many strengths, good results
• Demand-driven, timely, relevant support
• Continuity in links  trust, flexibility, adjusting to needs
• Framework agreements provide access to wider skills-base
 As strength is technical areas, other fields squeezed:
• Organisational, capacity building: In Norway, we out-source
• Quality assurance responsibilities  Focus on (kn)own fields
 Regional collaboration, peer learning, new experiences?
• While regional programs increasing in importance, local
knowledge, experience could be used much more
• Collaboration with non-state actors remains incipient
 Much of TC good though “within the box”, technical
 Vast non-Norwegian skills/experience base under-utilised
Oil for Development Evaluation
Oslo, 31 January 2013
10
OfD: Facing the Future?
 OfD: Extremely popular - becoming over-extended?
• Many countries wish to join but OfD reducing numbers:
Concern that OfD over-extended: facing management reach
& skills limitations, too many countries with differing needs
• OfD delivering into politically sensitive, technically complex
areas  requires close oversight, strong political support
 OfD imposing self-limitations – should be more inclusive
• Norwegian experience relevant but not unique – many other
experiential lessons available, much wider skills-base exists
• OfD as core component in larger international governance
alliance  Engage with multilaterals, bilaterals, EITI, CSOs
• Scale own role to regional conditions  OfD role in Latin
America different from Africa so reach can be enlarged !
 OfD has unique credibility, potential  Possible to
extend influence, impact, long-term governance results
Oil for Development Evaluation
Oslo, 31 January 2013
11
Recommendations: Strategic Program
1. OfD remains priority program for Norway
• Provide on budget line for predictability, accountability
• Expand program/funding if results appear possible/likely
2. Maintain focus on poverty reduction, operational goals
• Ensure long-term, broad-based vision, with the governance
and distributional dimensions this implies
• Ensure local voice in management - embassies critical
3. “Oil Curse  Blessing” should be key concern
• Understand local political economy/actors  Track the
complete value-chain  Identify action points for OfD
4. Strengthen international governance partnerships
• “Oil curse” is deliberate – addressing it requires alliances:
national governments, multilaterals, bilaterals, knowledge
centres, civil society, media, parliamentarians …
Oil for Development Evaluation
Oslo, 31 January 2013
12
Recommendations: Governance is core
5. Good Governance (GG) as core and visible component
• Operational GG program with funding, targets, clear partners
6. Country selection linked to GG prospects/performance
• Keep core  non-core distinction to define OfD intensity
• Increase OfD countries where GG potential seems positive
• Have clear Exit strategy – for success, and failure
7. Strengthen regional, South-South collaboration
• Broaden resource base for learning, sharing
• Support regional collaborations as important part of OfD
8. Restructure program, governance structure, admin
• Broaden program contents, less rigid “pillars”
• Move from secretive ”R-notat” to transparent policy basis
• Delegate more to field where feasible
Oil for Development Evaluation
Oslo, 31 January 2013
13
Recommendations: Widen Contents
9. Petroleum management: Extend to complete value chain
• Support countries’ commercial decisions: biggest problems
often related to good handling of large-scale benefits –
realising this may raise conflict of interest issues for Norway
10. Revenue management: Expand OfD delivery capacity
• Ensure OfD has range and depth of skills through use of
wider networks
11. Environmental management: Wider, strategic reach
• Identify local actors for broad-based capacity development
support, appropriate use of key tools (SEAs, EIAs etc)
• Strengthen compliance monitoring, “polluter pays” policies
12. Prepare OfD advisers for more complex roles, situations
• Ensure advisers trained beyond technical fields: to build
capacities in contested fields in context-sensitive places
Oil for Development Evaluation
Oslo, 31 January 2013
14
Recommendations: Realistic?
 A more decentralised governance approach?
• In line with general Norwegian, DAC aid principles, Busan 2011
(fragile states) agreement, practice of other donors
• Governance is context-specific  Stronger field role
 Stronger and bigger national and international alliances?
• Building political support: U-4 on anti-corruption
• Extractive Industry Transparency Initiative/EITI
 Sector approach to governance – strategic?
• Brings in the actors that need to be involved
• Anti-corruption lesson: challenges largely sector specific
 Good frameworks  good governance performance 
requires good strategies and implementation!
Oil for Development Evaluation
Oslo, 31 January 2013
15
Oil for Development: The Future
 Operational Objective remains fully relevant:
• “Economically, environmentally and socially responsible
management of petroleum resources which safeguards the
needs of future generations”
 The Concern is, if anything, greater today than in 2005:
• “Oil should be a blessing, not a curse. This means that
petroleum revenues should be used to provide essential
services for the many, and not be allowed to disappear into
the pockets of the few; …”
 Need to re-affirm the broad political consensus from 2005
 Need to expand our horizon to handle the more complex
governance issues
 Need to invite in more hands to tackle the challenges
 Need to provide the admin/mngt resources for the job
Oil for Development Evaluation
Oslo, 31 January 2013
16