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Oil, gas and mining companies often reach agreements with the municipalities that they operate in to invest in local capacity building. However, on the one hand, the officials in charge of these municipalities are generally not prepared to take advantage of these opportunities to address the population’s needs. On the other hand, civil society does not have the means and the capacity to hold the local authorities accountable effectively. Strategic guidance and support are required to build the capacity of both the local municipal authorities and the representatives of the civil society.
IFC’s Sustainable Infrastructure Advisory works with oil, gas, and mining companies to provide capacity-building techniques to host communities of their business operations. Our work focuses on improving governance at the local level by building the capacity of municipalities and local leaders and introducing a new dynamic for them to engage effectively.
Municipalities: The key focus is to work with municipalities to improve their investment processes. This will strengthen their ability to address the needs of communities and make them more open to being held accountable. We also work to ensure that municipalities adopt good practices and have the necessary tools and know-how to improve investment prioritization and execution.
Civil Society: We work to build the skills of local leaders so that they can identify and prioritize local needs. This intervention enables them to engage with local authorities effectively. It also gives them the opportunity to provide informed views which form part of the municipal decision-making process. The work that we do empowers local leaders and civil society organizations to hold local authorities accountable in their use of the resources that they receive.
Local dynamics for good governance: Improving the capacity of municipal authorities and local leaders creates a new dynamic of engagement which leads to good governance. Improved local governance requires each municipality to be responsive, responsible and socially accountable.
The revenue management initiatives that we have worked on have helped to enhance the relationship between the host community and the oil, gas or mining company. The companies also receive the support of the community when the improvement in livelihoods is associated with the interventions supported by the companies.
Received by local governments for public investment associated to mining and oil & gas royalties between 2008 and 2017
IFC provided strategic advice to Rio Tinto, which led to the establishment of the La Granja Social Fund. The fund helped to financing projects to benefit the local and rural municipality in the host community in northern Peru. The intervention also helped to improve the capacity of the local government and the local community leaders to implement investment planning and budget execution activities.
IFC worked with Total Bolivia to introduce good investment practices in the oil and gas sector in Bolivia. We provided training to our local partner – Bolivian Chamber of Hydrocarbon’s Foundation FUNDESOC, on implementing tailored revenue management projects.
IFC worked in one of the most active mining regions in Peru to help build the capacity of staff in seven municipalities. The staff was trained in investment management and introduced processes for their municipality to better respond to the local population’s needs. This intervention enhanced the capacity of local leaders to participate in local investment decision-making processes and to demand accountability regarding resource use.
social development projects worth $3.2 million completed in 2010, benefitting over 8,000 people
municipalities improved their investment management, transparency and accountability
questions from municipalities answered by Mayors