June 25, 2014
Summary Report

In 2011, the Devonshire Initiative convened a workshop examining issues around the governance of natural resources, with a focus on multi-stakeholder opportunities for collaboration on national-level capacity building initiatives. While much of the discussion at the 2011 workshop focused on national level processes, it has increasingly become understood that local or subnational considerations deserve equal or greater attention. A number of multi-stakeholder partnerships since 2011 have incorporated elements of local capacity building in an effort to address these challenges. With this in mind, on June 25 2014 the Devonshire Initiative convened a second workshop focused on governance and capacity building, this time taking an explicit focus on local and subnational issues. The “Mining, Development & Local Government Capacity” workshop brought together nearly 40 participants from the DI’s member companies and NGOs, as well as from Government and invited external organizations. The workshop featured a number of formal presentations, short/informal reflections, and a facilitated break-out session case study. The workshop was hosted by CARE Canada in Ottawa.

Decentralization processes underway around the world are transferring greater responsibility for the management of social and economic development to local governments. The municipal government is often (if not always) the first line of governance for communities and citizens, both in urban and rural contexts. Pointing to examples of Ghana, Peru, and Chile, a report by ICMM highlights how relatively little of the revenues generated from mining activity find their way back to the affected communities.1 This has led a number of companies to adopting enhanced social investment and CSR initiatives in order to appease local demands for employment and other benefits. These have at best been stop-gap measures and ‘quick fixes’ that have failed to address the underlying challenge, whereby local governments have not adequately operated as the “trusted mediating authority.”

‘Good’ governance at the local level has important implications for the extractives sector from early on in a project life. Accountable, transparent and capable local public governance structures reduce risk (in various forms, including social, political, and business risk) and have been shown to have a positive effect on increasing returns on investment by companies. Conflict, competition, and a lack of trust and transparency between various levels of government often distract or impede local administrators from forming the appropriate systems to manage the use of these significantly increased funds. Further complicating the governance challenge, local governments continue to struggle with inadequate human resources, unrealistic budgets, and a pernicious seesaw of rampant under- and over-spending.

Participants at the workshop examined a number of responses to the governance challenge; these largely fall within three categories: coalitions, participatory processes, and holistic approaches. As well, presentations showcased some of the more innovative approaches being undertaken to scale up, or make more sustainable, interventions in governance capacity building. These included Photovoice and the ‘small money, BIG CHANGE’ project.

Perhaps one of the most recurring challenges to come up throughout conversations at the workshop is the matter of achieving a common definition of what local governance capacity is, how it is assessed or measured, and how changes over time can be track (and attributed). It was highlighted on a number of occasions that creating or utilizing the ‘right’ metrics for assessing baseline levels of governance capacity and thereafter tracking changes over time has been an area underserved in existing best practice literature.

A second cross-cutting challenge was the sustainability of governance capacity building. Participants noted ways in which gains in governance capacity can erode over time: issues such as a lack of public participation, an inability to build capacity at a pace that keeps up with the growing windfalls of resources becoming available to local governments, persistent inequalities in distribution and wealth, and an absence of structures to support effective inter-governmental dialogue.

Achieving meaningful and lasting gains in the quality of local governance requires long time horizons. It also means finding common ground amongst companies, NGOs, donors and governments (along with a whole host of other stakeholders) on topics that have historically not ‘been on the table’ for such multi-stakeholder engagement. Successful capacity building is an ongoing, perhaps never ending, process, and one that requires the vision and commitment of a multi-stakeholder group from the private and public sectors to realize.

1 See further at International Council on Mining and Metals, http://www.icmm.com