Best of both worldsPolicy characteristics to attract oil and gas investment and drive domestic prosperityNovember 2019

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Best of both worlds | Policy characteristics to attract O&G investment and drive domestic prosperity | November 2019

Contents

Introduction 1

The sub-Saharan African context 2

Case studies from around the globe 5

Australia 5

Botswana 6

Chile 7

Indonesia 8

Kazakhstan 9

Nigeria 10

Key policy lessons 11

Conclusion 14

Endnotes 15

Contacts 16

Best of both worlds | Contents

1

Best of both worlds | Introduction

Introduction

Sub-Saharan Africa’s (SSA) gas resources are vast.1 The latest discoveries (such as South Africa’s Brulpadda)2 and investments (such as Mozambique’s US$20bn gas terminal)3 have highlighted the magnitude of the industry and its potential to transform the region.

Gas tends to be more financially, socially and environmentally positive than many other energy sources.4 It also has the potential to create employment opportunities, increase government revenue, broaden and deepen local value chains and cultivate local skills. This makes it a compelling opportunity for SSA, one that the region cannot afford to waste.

However, reshaping and converting the energy sector into a source of domestic prosperity requires a balance between private sector investment and local economic participation. Oil and gas (O&G) investments tend to be long-term and need a level of continuous certainty from the ecosystem in which they exist.

However, multinational companies often function in silos, merely extracting and exporting, with limited domestic downstream beneficiation occurring. A challenge therefore arises for these economies when little of the natural resource value is absorbed domestically.

More harmful and more difficult to repair is the uncertainty which often accompanies mineral policies (i.e. the plans/targets/guidelines for the industry) and regulations (i.e. the set laws to obtain these objectives). Continuously changing and ambiguous policies and regulations increase administration costs and create uncertainty. The more companies are burdened by policy and regulations, the less likely they are to invest.

A balance is required, which necessitates policies and regulations that attract investment and create investor confidence, while ensuring inclusive growth by promoting wide-ranging employment and utilising synergies between sectors.

This report focuses on key policy (and the relevant regulatory) characteristics to attract investment and drive local prosperity, starting with the current SSA policy and regulatory landscape. It then briefly unpacks the experiences of six global resource producers and concludes by summarising and drawing on key lessons for emerging gas producers in the SSA region.

Reshaping and converting the energy sector into a source of domestic prosperity requires a balance between private sector investment and local economic participation.

2

Best of both worlds | The sub-Saharan African context

“Africa is the last energy frontier, a vast continent of opportunities and potential pitfalls.”5 SSA (i.e. combined East, Southern and West Africa) held over 5% of global O&G resources and produced nearly 4% of global O&G production in 2018. The region’s O&G production has been decreasing slightly and is expected to continue. Yet, its gas production is projected to grow by 22% from 2018 to 2025 to around 1 500 kbbl/d. Positive signs are also anticipated from exploration: although exploration expenditure decreased significantly after 2014, it is projected to grow by 78% from 2018 to 2025. For 2019, SSA O&G exploration capital expenditure is estimated at US$3.7bn, while capital and operational expenditures are estimated at US$23.3bn and US$28.7bn, respectively.6

The sub-Saharan African context

Figure 1. SSA O&G snapshot

Sources: Rystad, 2019; and Deloitte Africa analysis

Note: East Africa includes Djibouti, Ethiopia, Kenya, Madagascar, Malawi, Mozambique, Rwanda, Somalia, South Sudan, Tanzania, Uganda, Zambia and Zimbabwe. Southern Africa includes Botswana, Namibia and South Africa. West Africa includes Angola, Benin, Cameroon, Central African Republic, Chad, Congo-Brazzaville, Côte d’Ivoire, the Democratic Republic of the Congo, Equatorial Guinea, Gabon, the Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Nigeria/São Tomé JDZ, São Tomé and Príncipe, Senegal, Sierra Leone and Togo.

O&G resources

0

50

100

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2009 2018 2025f

Bn b

bl

East Africa Southern Africa West Africa

0

1000

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5000

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2009 2018 2025f

kbbl

/d

O&G production

East Africa Southern Africa West Africa

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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019f 2020f 2021f 2022f 2023f 2024f 2025f

US$

bn

O&G exploration expenditure

East Africa Southern Africa West Africa

78% increase expected from 2018 to 2025

23.3 (5%)

464.1 (95%)

O&G capex (US$bn, 2019f)

3.7 (6%)

56.6 (94%)

O&G exploration capex (US$bn, 2019f)

O&G opex (US$bn, 2019f)

28.7 (5%)

515.7 (95%)

SSA

Rest of the World

5.4% of global

resources in 2018

3.9% of global

production in 2018

3

Best of both worlds | The sub-Saharan African context

There remain various obstacles to O&G in Africa. Policy and the relevant regulation, and often the lack thereof, have been a systemic challenge for the African O&G industry.7 Although O&G policy is being developed and investor-friendly improvements have materialised, policy developments have typically been slow-moving. This is seen in the Fraser Institute’s Global Petroleum Policy Perception Index (PPI), in which Africa still lags behind most regions (see Figure 2).

Figure 2. Global Petroleum Policy Perception Index (by region), 2017 vs 2018

Source: Fraser Institute, 20188

This low rating is due to a range of policy and regulatory misgivings. For example, Mozambique struggles with regulatory certainty regarding administration, interpretation and enforcement.9 This often leads to interpretation challenges for foreign companies, deterring investment. In Nigeria, taxation and the cost of regulatory compliance are discouraging investment, while labour regulation and employment agreements affect investment in Angola.10

7.0

35.1

44.0

50.7

58.0

68.7 67.8

83.7 82.5

7.1

53.1 56.1

59.6

67.6 69.8

81.4

87.3

0

10

20

30

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60

70

80

90

100

Latin America and

Caribbean

Middle East and North

Africa

Oceania Africa Asia Canada Australia Europe United States

2017 2018

42.8

4

Best of both worlds | The sub-Saharan African context

Uncertainty is often also prolonged by the amount of consultation required and the weak institutional capacity to administrate it. For example, the Nigerian Petroleum Industry Governance Bill (PIGB), the first of four hydrocarbon bills, was passed practically two decades after it was initially proposed.11

In addition, the old paradigm of doing the bare minimum is no longer enough. Companies’ social licences to operate, i.e. the ability to operate due to approval from communities and other stakeholders, have become a business imperative. This means ensuring that developmental initiatives achieve their intended developmental objectives. Attaining a social licence to operate thus requires a shift away from a tick-box approach and towards attaining value beyond compliance,12 i.e. aligning economic and social progress.

In many countries, including South Africa, the recent O&G discoveries have led to governments acknowledging both the opportunity these resource endowments present to stimulate economic growth across sectors, as well as the gaps in policy and regulation.13 Balancing foreign investment and local value addition is a difficult task. While each country faces its own set of opportunities and challenges, it is important to take stock of successful cases and frequent pitfalls when developing sustainable O&G policies and regulation.

5

Best of both worlds | Case studies from around the globe

Case studies from around the globeCase studies of policy and regulatory practices across the world can provide valuable lessons for prospective SSA O&G players, both for attracting investment and creating local prosperity. Although many of the case studies focus on the O&G sector, they also include experiences of countries with other mineral endowments.

Sources: Deloitte Africa analysis based on World Bank, 2013;14 and The Australian Petroleum Production and Exploration Association, 201915

Australia

Local content programme (LCP)

Australia’s O&G policy and the relevant regulatory environment is broadly supportive: it has a stable taxation regime, transparent access to resources for exploration and development, and a supportive small and medium-sized enterprises (SMEs) environment.

Notably, its LCP helps develop sectors connected to the O&G industry by using incentives rather than obligations. One of the most effective incentives used by the Australian government is tariff cutbacks in exchange for supplier development, especially of SMEs. The Australian government offers import tariff waivers on locally unavailable petroleum equipment in exchange for developing and implementing an Australian Industry Participation (AIP) plan.

The AIP aims to drive local supplier development by considering the impact of investment, including local employment, while advancing the domestic industry in various ways, such as: • cultivating local skills • developing strategic partnerships with local suppliers • encouraging regional development • promoting local research and development (R&D) • supporting innovative products and/or processes • integrating Australian supply chains into global ones.

The LCP thus promotes the development of a sustainable domestic industry by providing a unified approach to advancing local capabilities. This also assists in identifying existing qualified suppliers without infringing on the country’s international trade obligations.

Summary • Stable regimes

• Incentive-driven

• Support for SMEs

• Transparent

Outcomes

Outcomes key

Positive impact

Mixed impact

Adverse impact

Positive impact

6

Best of both worlds | Case studies from around the globe

Botswana

Mines and Minerals Act and downstream policies

Legislation has played a significant role in attracting foreign direct investment (FDI) to Botswana. The country reformed its mining legislation, through the Mines and Minerals Act of 1999, to drive greater policy certainty and transparency. Since then, Botswana has been seen by many mining investors as one of Africa’s most desirable destinations.

This is largely due to the country’s mining legislation recognising the substantial and long-term investment required to develop and operate a mine. Mining legislation is underpinned by comprehensive and transparent criteria, along with efficient and stable licensing procedures. Moreover, the Botswana government utilises the economic opportunities that the investments bring: employment preference is given to local residents, appropriate training is provided to cultivate local skills, and revenue is collected from the mining industry, which is used to support society overall through effective public spending.

Botswana has also increased mining linkages downstream. The Botswana government developed a clear vision as well as an implementation strategy for its downstream aspirations. This included creating dedicated institutions and public-private partnerships (PPPs). For example, the government is promoting diamond cutting, polishing and marketing facilities to expand value-added activities and diversify its economy.

Nevertheless, more can be done for wealth to filter through to locals (and other sectors) while continuing to attract FDI. It has been suggested that Botswana focusses on local suppliers through government support and encouraging mining companies to procure locally.

Sources: Deloitte Africa analysis based on World Bank, 2013;16 Jeffery, 2016;17 Intergovernmental Forum, 2018a;18 and Ministry of Minerals, Energy and Water Resource, 200819

Summary • Predictable

• Transparent criteria

• Clear vision

• Public-private partnerships

Outcomes

Positive impact

7

Best of both worlds | Case studies from around the globe

Chile

Multiple policies and regulation

Chile is seen as an attractive investment destination: mining policy and regulation are favourable, the economic environment is stable, institutions are strong (and have been able to capture more economic benefits) and free trade agreements have been formed with strategic partners.

Chile has demonstrated the importance of balancing foreign investor and local trade-offs. Although Chile has altered its regulation (including the tax regime), the policy environment is still perceived as stable. This is largely due to clear and transparent incremental changes, which have been made in collaboration with key stakeholders. Moreover, Chile has used stability levers (such as stability agreements which are fixed contracts over fixed time periods in exchange for a higher fixed corporate tax rate) to enhance certainty for many multinationals.

In addition, government policies and PPPs have been used to drive targeted supplier development. Local content is not defined by law, with government focussing on empowering SMEs through training and exposure to solve complex challenges, as well as creating niche mining solutions.

Mining firms have also set their own supplier development criteria for quality improvements. For example, one multinational mining firm created what they called the World-Class Suppliers Programme. The programme calls for niche solutions, which act as a catalyst for improved alignment with the industry’s needs and better use of resources, creating a tailor-made market for local suppliers. The Programme now forms part of the national mining strategy, its success underpinned by collaborative efforts between the multinational, national industries and research institutions.

Chile understands the balancing act between investment and local value addition. This is supported by having a clear vision for its SME development, i.e. niche mining solutions. This distinct vision, alongside targeted incentives, support mechanisms and coordinated collaboration across stakeholders, is assisting local SMEs to compete in global supply chains.

Sources: Deloitte Africa analysis based on Intergovernmental Forum, 2018b;20 United Nations Conference on Trade and Development, 2011;21 and the Chilean Mining Association, 201422

Summary • Incremental changes

• Targeted solutions

• Clear vision

• Public-private partnerships

Outcomes

Positive impact

8

Best of both worlds | Case studies from around the globe

Indonesia

2014 export ban

Although Indonesia boasts abundant reserves of nickel and copper, the country has struggled to attract sustainable FDI into the mining sector. This is largely due to bureaucratic regulatory regimes, unclear downstream strategies and inconsistent policies.

For example, a presidential decree based on the 2009 Mineral and Coal Mining Law was passed to ban exports of unprocessed minerals in 2014. The ban was implemented to protect local businesses and create jobs in mineral processing. However, the blanket-style ban failed, resulting in redundancies (several mining companies had to lay off workers), economic downturns for regions heavily reliant on mineral extraction, and the closure of mines (more than 100 mining companies either reduced or closed their operations in 2014).

The short-term impact of the export ban has been evident. Indonesia’s unclear and inconsistent policies and relevant regulations have had a negative effect on the country’s reputation, thus discouraging international and local investment. This led to Indonesia relaxing its export ban in 2017: companies currently building smelters may export unprocessed minerals until January 2022, and recently issued export permits are dependent on investments in smelting facilities.

The sudden and blanket-style regulation inadvertently hindered downstream beneficiation and discouraged mining investment. The regulation also failed to take into consideration the cyclical nature and external environment of commodity prices, which exacerbated the negative impact of the ban. Clear and consistent regulation is critical, and the lack thereof has led to a call for new mining regulations in Indonesia.

Sources: Deloitte Africa analysis based on Intergovernmental Forum, 2018c;23 Asmarini, W. and Munthe, B.C., 2017;24 and Global Legal Monitor, 201425

Summary • Inconsistent and unclear policies and regulations

• Lack of consideration for external factors

• Blanket-approach ban

Outcomes

Adverse impact

9

Best of both worlds | Case studies from around the globe

Kazakhstan

Local content certification and work permits

Positive legislative changes in the 1990s, such as international integration, attracted much needed foreign investment in the oil sector. In the 2000s, the Kazak government focused on building local capacity and thus increasing local value add. This included supply and demand side policies, and relevant regulations, such as local content requirement, annual procurement planning and training initiatives.

Although aspects of these, such as increased enforcement and monitoring, have been viewed as successful, several practical challenges have emerged. For example, the local content requirement necessitates companies to certify the origin of goods. This, however, became a practical challenge: the local content calculation was viewed as vague and information sharing across various supply chains became a challenge leading to increased administrative burdens. The local content certification also lacked clear definitions and guidelines, with the opaque process leading to confusion and exposing room for corruption. This was exacerbated by challenges in hiring foreign labour. Although 2017’s new legislation has led to some improvements (e.g. a simplified process), the visa policy remains a challenge for foreign investors. The new legislation introduced state fees and annual quotas, with work permits given per region only. This has resulted in bottlenecks and created an unnecessary obstacle to investing.

Sources: Deloitte Africa analysis based on Organisation of Economic Co-operation and Development, 2018;26 and Intergovernmental Forum, 2018d27

Summary • Enforcement and monitoring

• Lack of clear definitions

• Lack of consideration across value chains

Outcomes

Mixed impact

10

Best of both worlds | Case studies from around the globe

Nigeria

Multiple policies

Nigeria, a country with vast O&G resources, continues to confront challenges in its O&G industry. Many of these challenges stem from the poor policy and regulatory environment, ranging from an incomprehensive regulatory landscape, to poor and slow implementation of petroleum legislation. Although new policies have been introduced, their advancement has been sluggish.

Nigeria also struggles with weak institutional capacity. The Nigerian National Petroleum Corporation (NNPC) has struggled with its own independence, adversely affecting the Nigerian O&G industry. This is exacerbated by the NNPC’s lack of focus and clear strategy. Moreover, the NNPC’s lack of transparency has damaged its reputation among investors.

This is also witnessed in other parts of the supply chain. Localisation has showed slow progress, leading to the introduction of the Nigerian Oil and Gas Industry Content Development Act of 2010. Although the Act aims to promote value addition by Nigerian firms, and has shown some success, the NNPC’s opaque nature has affected downstream counterparts. This is worsened by skills shortages in Nigeria, something which is not fully accounted for in the general policy landscape. In addition, the programme risks being expensive as government-led investment in downstream programmes can be costly if mismanaged – a risk due to weak institutions.

Existing shortages (of skills, suppliers and institutions) need to be addressed, which is challenging in a low-capacity environment. This highlights the importance of considering the host country’s current state as well as the industry’s existing capacity needs when designing the relevant O&G policies and regulations.

Sources: Deloitte Africa analysis based on Intergovernmental Forum, 2018e;28 and Intergovernmental Forum, 2018f29

Summary • Lack of long-term strategy

• Opaque processes

• Lack of independence

• Lack of current context

Outcomes

Adverse impact

11

Best of both worlds | Key policy lessons

Key policy lessons

The balancing act between attracting foreign investment and local value addition is difficult. Each country is different and individual opportunities and shortcomings should be taken into consideration. Nevertheless, the case studies have highlighted various important characteristics needed to attract FDI while ensuring local value for the host country. Five general policy (and relevant regulatory) characteristics have emerged.

Figure 3. Important policy characteristics

Source: Deloitte Africa research, 2019

Clear vision

Pragmatic objectives

Cross sector linkages and collaboration

Monitoring and evaluation

Stable policy environment

12

Best of both worlds | Key policy lessons

Clear vision

Having a clear vision for the sustainable development of the O&G sector is a critical step in policy enablement. This requires understanding the potential of the O&G sector, the strategic opportunities it creates across value chains and its role within the country’s broader economic strategy. Likewise, it is important to analyse the investment impact against the desired level of localisation.30

The importance of a clear vision is seen in the Botswana and Chile case studies: the clear visions for localisation, as well as understanding the role of the sector in the economy and global value chains, contributed to both countries’ success.

Pragmatic objectives

After understanding the vision for the industry and its connection to the broader economy, it is important to define pragmatic objectives based on the host country’s opportunities and shortcomings.31 This means carefully analysing the linkages within and between supply chains (e.g. processing), the challenges in deepening and broadening them (e.g. skills), as well as the public and private sector capacity to overcome them (e.g. multinational companies’ experts).32

It is thus critical for SSA countries to understand their individual gaps, opportunities and unique leverage in order to prioritise value chains and develop pragmatic targets. For example, the skills gap in Nigeria – a challenge many SSA countries face – was not fully taken into consideration, leading to impractical policies and regulation. Likewise, external factors should also be considered, as was the case in Indonesia where the cyclical downturn of mineral prices exacerbated the negative impact of the export ban.

These factors are also critical when analysing the type of localisation desired. For example, Australia took stock of its current context, utilising its lack of local petroleum equipment and import tariffs to incentivise multinationals to support and develop local SMEs.

This demonstrates the importance of introducing practical and applicable goals to ensure that root challenges, such as education or enterprise development, are addressed. Moreover, targets and goals should be measurable to ensure that progress can be well-monitored.

Cross sector linkages and collaboration

All of these decisions require collaboration. This means understanding the various stakeholders, their needs and influence: policy solutions will have

varying consequences depending on the stakeholders involved. This was seen in Australia, where government utilised multinationals’ expertise to develop local SMEs; in Botswana, where PPPs support downstream activities; and in Indonesia, where the lack of coordination and consultation led to disinvestment, business closures, job cuts and revenue losses. Indonesia’s foreign investments only improved following public consultations and subsequent amendments to the regulations.

Importantly, these solutions (especially for value chain development) require collaboration across government departments and sectors. This is crucial to avoid conflicting regulations, additional administrative burdens, implementation delays and opaque processes.33 For example, Kazakhstan’s local content certification disregarded the difficulty in coordinating information across value chains, leading to additional administrative burdens. Furthermore, its visa policy did not meet the O&G sector’s needs, preventing the required expertise and thus investment.

It is important to analyse the trade-offs of various policies and regulations comprehensibly, and to continuously assess their performance to ensure appropriate and sensible regulations are in place.34

13

Best of both worlds | Key policy lessons

Monitoring and evaluation

Stakeholder accountability (see the Kazakhstan case study) and regulatory improvements (see the Chile case study) are important levers to enhance policy success. This requires the continuous monitoring of solutions against the set objectives and/or targets.

Monitoring is more effective when the design of the policy and/or regulation includes a built-in independent monitoring and implementation mechanism. The mechanism should include pragmatic reporting requirements, disciplined data collection and a comprehensive review function that can capture the causes of and appropriate response to success or failure.35

Importantly, the design of the monitoring mechanism should also consider the strength of local institutions, which varies across SSA.

Stable policy environment

Policy stability is crucial to attracting investment. This does not mean that policy

and/or regulation should be fixed in stone: these should be flexible and have different iterations to enhance efficiency. Rather, the policy environment should be predictable and transparent, while being flexible enough to allow for improvements.

Various levers can be used to ensure stability, for example:

• Policy should be clear and transparent, and policy instruments can be used to foster stability (such as constitutional guarantees of property rights and stability agreements) while ensuring local benefit. For example, Chile allowed investors to enter into a stability agreement which ensures the stability of the tax and regulatory regime in exchange for a higher fixed rate.36

• Consultation with key stakeholders to gain buy-in and increase predictability and consensus is essential.37 Botswana engaged with multinationals to collectively advance local content programmes, whereas the impact of a lack of consultation was witnessed in Indonesia with the unexpected export ban.

• Gradual and transparent regulatory change must occur when needed. Policymakers should also take into consideration both previous regimes and the current environment, including existing long-term planning. This was seen in the Chile case study, where different regime iterations have occurred over the years. These were, however, gradual and involved public consultation, which led to policy predictability.38

It is critical for SSA countries to understand their individual gaps, opportunities and unique leverage in order to prioritise value chains and develop pragmatic targets.

14

Best of both worlds | Conclusion

Balancing foreign investment and domestic prosperity is no easy feat. Policymakers need to use the tools available at their disposal to navigate difficult trade-offs. Technology advancements have increased the ability to make intelligent decisions, allowing for better decision-making. Data-driven and evidence-based analysis provides the opportunity to understand the actual needs and capacity of stakeholders, whether local communities or multinationals. This, ultimately, leads to improved cost-benefit analyses of policies and regulations across industries and so too the continuous assessment thereof.

Data can thus assist in creating a clear industry strategy, one which is embedded in the national plan and takes stock of the current external and internal environments, with clear and pragmatic objectives. This means developing policy and the relevant regulations in consultation with key stakeholders, and in a way that is transparent, aligned, and can be monitored to track progress as well as make the needed improvements to enhance efficiency for both the sector and the broader local economy.

Nevertheless, the right policy and related regulatory characteristics alone are not enough to ensure a sustainable O&G sector. Proper infrastructure, legal frameworks and economic diversity39 are additional factors required to unlock the full potential of the vast gas resources and drive the much needed living standard improvements in the region.

Conclusion

15

Best of both worlds | Endnotes

Endnotes

1 SSA’s proven natural gas reserves are estimated at around 3.3% of global reserves. SSA is calculated as Africa excluding Algeria, Egypt and Libya for natural gas. See British Petroleum, (2019). BP Statistical Review of World Energy. BP. Available at: http://www.bp.com/statisticalreview

2 Brulpadda is a large gas field that was found in South Africa. It has the potential of one billion barrels of wet gas. See Wasserman, H., (2019). Everything you need to know about South Africa’s massive gas find. Business Insider. Available at: https://www.businessinsider.co.za/impact-of-brulpadda-2019-2

3 Oil Review Africa, (2019). Investment in Africa’s LNG sector gains momentum. Oil Review Africa. Available at: http://www.oilreviewafrica.com/gas/gas/investment-in-africa-s-lng-sector-gains-momentum; and see also Stoddard, E., (2019). Mozambique’s $20bn gas project: A boom that heralds a resource curse bust? Daily Maverick. Available at: https://www.dailymaverick.co.za/article/2019-06-24-mozambiques-20bn-gas-project-a-boom-that-heralds-a-resource-curse-bust/

4 International Gas Union, (accessed 2019). Natural Gas is Efficient. International Gas Union. Available at: https://www.igu.org/natural-gas efficient

5 Deloitte Insights, (2019). The new frontier: Winning in the African oil and gas industry. Deloitte Insights. Available at: https://www2.deloitte.com/us/en/insights/industry/oil-and-gas/africa-oil-gas-industry-energy-reserves.html

6 Deloitte Africa analysis based on data obtained from Rystad Energy, (2019).

7 Deloitte Africa, (2018). Africa Oil & Gas State of Play. Deloitte. Available at: https://www2.deloitte.com/za/en/pages/energy-and-resources/articles/africa-oil-gas-state-of-play.html

8 The Fraser Institute, (2018). Global Petroleum Survey 2018. The Fraser Institute.

9 Ibid.10 Ibid.11 Deloitte Africa, 2018.12 Value beyond compliance is about the

fundamental synergy between business performance and social progress in creating shared value. See Deloitte Africa, (2019). Value Beyond Compliance: A new

paradigm to create shared value for mines, communities and government, Deloitte Africa. Available at: https://www2.deloitte.com/za/en/pages/energy-and-resources/articles/value-beyond-compliance-mining.html

13 Creamer Media, (2019). South Africa plans to #MakeEnergyWork with new oil and gas policy. Creamer Media’s Engineering News. Available at: http://m.engineeringnews.co.za/article/south-africa-plans-to-makeenergywork-with-new-oil-and-gas-policy-2019-07-09/rep_id:4433

14 World Bank, (2013). A World Bank Study: Local content policies in the oil and gas sector. The World Bank Group.

15 The Australian Petroleum Production and Exploration Association, (2019). 2019-20 Federal Pre-budget Submission – The Australian Petroleum Production and Exploration Association. Letter to Department of Treasury. The Australian Petroleum Production and Exploration Association.

16 World Bank, 2013.17 Jeffery, A., (2016). Botswana has the

mining law that South Africa should copy. Daily Maverick.

18 Intergovernmental Forum, (2018a). Botswana: Downstream Linkages. Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development.

19 Ministry of Minerals, Energy and Water Resource, (2008). Botswana Mineral Investment Promotion – 2008. Republic of Botswana.

20 Intergovernmental Forum, (2018b). Designing local content policies in mineral-rich countries. Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development.

21 United Nations Conference on Trade and Development, (2011). Best Practices in Investment for Development, How to attract and benefit from FDI in Mining: Lessons from Canada and Chile. Investment Advisory Series, Series B, Number 7. United Nations.

22 Chilean Mining Association, (2014). Copper Mining Investment and Challenges in Chile. 10th Asia Copper Conference. Chilean Mining Association.

23 Intergovernmental Forum, (2018c). Indonesia: Downstream Linkages. Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development.

24 Asmarini, W. and Munthe, B.C., (2017). Indonesia eases export ban on nickel ore, bauxite. Reuters. Available at: https://www.reuters.com/article/us-indonesia-mining-exports/indonesia-eases-export-ban-on-nickel-ore-bauxite-idUSKBN14W1TZ

25 Global Legal Monitor, (2014). Indonesia: Export Ban on Unprocessed Minerals Comes into Effect. Global Legal Monitor. Available at: https://www.loc.gov/law/foreign-news/article/indonesia-export-ban-on-unprocessed-minerals-comes-into-effect/

26 Organisation of Economic Co-operation and Development, (2018). Reforming Kazakhstan: Progress, Challenges and Opportunities. Organisation of Economic Co-operation and Development.

27 Intergovernmental Forum, (2018d). Kazakhstan: Upstream Linkages. Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development.

28 Intergovernmental Forum, (2018e). Nigeria: National Capacity. Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development.

29 Intergovernmental Forum, (2018f). Nigeria: Downstream Linkages. Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development.

30 Intergovernmental Forum, (2018g). Guidance for governments: local content policies. Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development.

31 Ibid. and World Bank, 2013.32 World Bank, 2013.33 Ibid.34 Ibid.35 Intergovernmental Forum, 2018g.36 United Nations Conference on Trade and

Development, 2011.37 Ibid.38 Ibid.39 For example, economically diverse, mature

and wealthy countries are less likely to fall victim of the resource curse. See Stoddard, 2019.

16

Best of both worlds | Contacts

Contacts

Andrew Lane

Leader Energy, Resources and Industrials

Deloitte Africa

Tel: +27 (0)11 517 4221

Email: alane@deloitte.co.za

Jenny Erskine

Leader Oil & Gas

Deloitte Africa

Tel: +27 (0)21 427 5737

Email: jerskine@deloitte.com

Authors

Hannah Edinger

Associate Director Africa Insights

Deloitte Africa

Tel: +27 (0)11 304 5463

Email: hedinger@deloitte.co.za

Elmarie Nel

Senior Consultant Africa Insights

Deloitte Africa

Tel: +27 (0)11 209 8496

Email: elnel@deloitte.co.za

Acknowledgments

We would like to thank all the research assistants and subject matter experts who assisted, including Masego Ntsoane, Reneiloe Phoi, Amu Ngobeni, Bridgette Nthambeleni and Natalie Hodgson.

Suneé Pretorius

Senior Manager, Industry Strategist Energy, Resources and Industrials

Deloitte Africa

Tel: +27 (0)11 304 5118

Email: supretorius@deloitte.co.za

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