Oil, Gas and Mining Sustainable Community Development Fund CommDev

1. Oil, Gas and Mining Sustainable Community Development Fund CommDev Extractive Industries: Legal and Fiscal Regimes, Revenue Management, and Good Governance May 17, 2007

2. What is CommDev? • A $12 million fund focused on helping communities receive sustainable benefits from extractive industry (EI) projects. • Provide funding and knowledge • Initial geographical focus: Africa (60 – 70%) • Tri-partite approach with key stakeholders – community, EI investors and local/regional governments – in order to ensure sustainability. • Support capacity building, training, technical assistance, tool development and information clearinghouse • Draws on breadth and depth of expertise in the World Bank Group.

3. What is Community Development? • The process of increasing the strength and effectiveness of communities, improving peoples’ quality of life, and enabling people to participate in decision making and to achieve greater long-term control over their lives. Community development empowers and helps communities to • improve their social and physical environments • increase equity and social justice • overcome social exclusion • build social capital and capacities • involve communities in the strategic, assessment, and decision-making processes that influence their local conditions Source: ICMM Community Development Toolkit

4. Evolution of Approaches to Community Development

5. Importance of Local Revenue Management • Key factors for the sustainability of EI: • the local management of royalties • the populations’ perception of the benefits generated by EI for their communities • Lessons learned from Latin America: • Insufficient absorptive capacity • Unresponsive allocation pattern • Poor fiscal reporting • Role of local civil society – the demand-side of good governance • Bottlenecks need to be addressed at micro and macro level

6. CommDev Revenue ManagementProject in Colombia • Objective: • To improve municipal performance of the use of oil royalties in Colombia by helping selected local governments incorporate management tools and improve their internal organization. • Intention is to contribute to a more efficient allocation and leverage of oil royalties in those areas where oil companies operate, which should translate into benefits for local communities • Deliverable: • Replicable module of training for municipal royalty management.

7. Tools for tracking inputs and outputs: Citizens Report Card Community Scorecard Participatory Budgeting Tool Companies publish what they are paying authorities Community Development Strategies M&E Approach EI Companies Civil Society Communities Local/Regional Government Create Multidirectional Accountability

8. Monitoring & Evaluation If you don’t know where you’re going, you’ll probably end up somewhere else – Yogi Berra • M&E as much about building relationships, trust and mutual learning as it is about collecting and reporting data. • Participatory forms of M&E include viewpoints of all stakeholders - integrate diverse priorities and concerns • M&E offers the opportunity to demonstrate a company's value in the community • Participation and engagement of communities are key to designing and measuring projects adequately • Good M&E Upfront = Good Project Design

9. Participatory Environmental Monitoring in Guatemala • CommDev is funding a community-based monitoring committee to conduct water testing. • Brings together a broad array of stakeholders • Build capacity within community • Serves as a model for constructive dialogue between local communities and the extractive industries throughout Guatemala • Program was awarded a prize by the Latin American Mining Organization as the region’s most innovative effort to integrate a mining operation with its local communities.

10. Features of EffectiveCommunity Development • Community consultation • Clear understanding of the local context and the impact of EI on the community (early baseline data) • Trust, shared ownership – processes are key • Expectations contained by clearly defined roles and responsibilities of all stakeholders • Capacity building – build social capital • Participatory Community Development Strategies • Resources (companies, govt,…etc.) allocated to deliver outputs • M&E integral part of programs (measurable goals; monitor and report on progress) • Strategic partnerships • Sustainability

11. Most Important Question… WHO BENEFITS???

12. CommDev THANK YOU!!