Local content, supply chains, and shared infrastructure

Abstract

Local content policies in the context of extractive industries have attracted increased interest in recent years. Most countries with a significant extractive industry have included local content requirements either in their legislation or exploitation contracts. Such efforts may be constrained by low capacity of potential suppliers, low skills, and a number of other factors constituting the general business environment. A number of extractive industry companies have introduced supplier development programmes that attempt to reduce the constraints and skill gaps. Government policies on local content vary, with some prescribing quantitative targets for local content, while others focus on improving skills and raising the capacity of domestic industry. Infrastructure built for extractive industries can often be used by local populations and other economic activities. Difficulties in finding suitable financing arrangements have, however, limited the number of successful greenfield multi-client/multi-user extractive industry-related infrastructure projects.

The Role of Inclusive Innovation in Promoting Social Sustainability

“…IFC (2011) identifies access to capital as a bigger challenge for women‐owned enterprises relative to others (due to weaker property rights, lower asset ownership, lower credit history, cultural norms, etc.). An example of a successful partnership towards inclusive sourcing is the INOVE supplier development program in Brazil that, via partnership with commercial banks, has provided invoice factoring and working capital loans to local suppliers (Östensson 2017).…”

Local procurement, shared value, and sustainable development: A case study from the mining sector in Mongolia

“…Of note, access to finance, which is frequently considered a barrier to developing MSME as local suppliers (Ostensson, 2018), was not mentioned by interviewees. When questioned about access to finance, respondents expressed a high degree of confidence that they could access existing sources for the funding necessary to support small business creation or growth.…”

“…There was also a suggestion that the transfer of business management knowledge from mining personnel to herders might facilitate the establishment of a value‐added industry for raw cashmere and/or the further development of herder cooperatives. There is evidence from other emerging economies that an improved understanding of business management and business practices can be as valuable to local suppliers as establishing direct contracts with mining operations (Ostensson, 2018).…”

Charity begins at home: The political economy of non-tariff barriers to trade in Southern Africa

“…In addition, if the local economy in question is not developed enough to take full advantage of LCRs then these measures may be counter-productive (Benin 2017), although they may also act as an incentive for companies to invest in supplier development (Osstenson 2017) which has generally positive long-term impacts.…”