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1 Setting the Legal and Policy Framework

Stage 1:
Setting the Legal & Policy Framework

Setting the Legal and Policy Framework refers to the need for a country to formulate clear policies and strategies that both attract FDI and benefit the country.

Government Policies and Strategies Legislative and Regulatory Frameworks Sector-Wide Analyses
2 Pre-Negotiation

Stage 2:
Pre-Negotiation Stage

The Pre-Negotiation Stage refers to the period during which a government identifies a particular project or investment and conducts feasibility studies and impact assessments.

Feasibility Studies Impact Assessments Tender Process and Financial Structure
3 Contract Negotiation

Stage 3:
Contract Negotiation Stage

The Contract Negotiation Stage refers to the actual negotiation of investment contracts between a government and an investor.

Prepare for the Negotiation Assemble a Negotiation Team Develop a Negotiation Position Contract Negotiation
4 Contract Implementation and Monitoring

Stage 4:
Implementation & Monitoring Stage

The Implementation and Monitoring of the Investment Stage refers to the period during which an investment project is developed and operated pursuant to the terms of the investment contract.

Monitoring Implementation Grievance Mechanisms

Roadmap

Sector-Wide Analyses

Content of this page:

A host government also needs to ensure that it has sufficient information on the sector and resources in respect of which it is seeking to attract investment. The availability of reliable and up-to-date information will improve the prospects of a successful and equitable outcome of a tender process or a contract negotiation.

Depending on the type of the investment, such information could include:

  • Geological information regarding the location, estimated quantity and quality of mineral resources;
  • Hydrological information regarding water sources and availability, seasonal fluctuations, and current users of water; or
  • Information regarding the suitability and availability of land for a particular use.

​In relation to extractive industry investments, for example, governments require geological information about the location and estimated quality and quantity of reserves as well as the technical expertise to understand and interpret such information.

An understanding of the infrastructure needs of the investor is also important so that the scope for shared use or third party access to such infrastructure can be assessed. Importantly, the status of land that will be made available for the investment project needs to be ascertained.

Where land rights have not been formalized, informal land uses need to be assessed and taken into account so that adequate in-kind and financial compensation can be made available to land users so as to minimize the prospects of social and community conflict. See the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security for guidance on how to improve the governance of tenure.

At this time, the government should also assess whether it has the requisite skills and in-house expertise and experience in relation to the type of sector investment. If not, it should seek to acquire such expertise in-house or request assistance from support providers or donors to ensure it has access to the requisite skills or expertise in such areas. This will ensure that, when investment opportunities arise, the government is well placed to negotiate, monitor and implement the investment.

Key Tools At This Stage

Useful Resources

Standards

FAO: Responsible Governance of Tenure and the Law– A Guide for Lawyers and Other Legal Service Providers Go to resource

The FAO Governance of Tenure Technical Guides are part of FAO’s initiative to help develop capacities to improve tenure governance and thereby assist countries in applying the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security. The FAO Governance of Tenure Technical Guides are prepared by technical specialists and can be used by a range of actors. They:

-Translate principles of the Guidelines into practical mechanisms, processes and actions;

-Give examples of good practice – what has worked, where, why and how;

-Provide useful tools for activities such as the design of policy and reform processes, for the design of investment projects and for guiding interventions. 

The Extractive Industries Sector : Essentials for Economists, Public Finance Professionals, and Policy Makers Go to resource

The extractive industries (EI) sector occupies an outsize space in the economies of many developing countries. Economists, public finance professionals, and policy makers working in such countries are frequently confronted with issues that require an in-depth understanding of the sector. The objective of this volume is to provide a concise overview of EI-related topics these professionals are likely to encounter. The volume provides an overview of issues central to EI economics; discusses key components of the sector’s governance, policy, and institutional frameworks; and identifies the public sector’s EI-related financing obligations. Its discussion of EI economics covers the valuation of subsoil assets, the economic interpretation of ore, and the structure of energy and mineral markets. The volume maps the responsibilities of relevant government entities and outlines the characteristics of the EI sector’s legal and regulatory frameworks. Specific key functions of the sector are briefly discussed, as are the financial structures that underpin environmental and social safeguards; investment of public revenues generated from oil, gas, or minerals; as well as extractive-based economic diversification. The authors hope that decision makers in ministries of finance, international organizations, and other relevant entities will find the study useful to their understanding and analysis of the EI sector.

Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security Go to resource

A reference and guide to improve the governance of tenure of land, fisheries and forests with the overarching goal of achieving food security for all and to support the progressive realization of the right to adequate food in the context of national food security.

National Development Strategies

NRGI Reader | Granting Rights to Natural Resources: Determining Who Takes Natural Resources Out of the Ground Go to resource

This reader comes from a series of 20 short, illustrated overviews of key topics in the extractives sector. Together they serve as a robust introduction for the lay reader to fundamental issues and concepts in oil, gas and mining sector governance. They contain helpful figures and infographics, and each reader has a standard format: key messages, concepts, case examples, and a final set of practitioner-orientated questions to ask.

The Extractive Industries Sector : Essentials for Economists, Public Finance Professionals, and Policy Makers Go to resource

The extractive industries (EI) sector occupies an outsize space in the economies of many developing countries. Economists, public finance professionals, and policy makers working in such countries are frequently confronted with issues that require an in-depth understanding of the sector. The objective of this volume is to provide a concise overview of EI-related topics these professionals are likely to encounter. The volume provides an overview of issues central to EI economics; discusses key components of the sector’s governance, policy, and institutional frameworks; and identifies the public sector’s EI-related financing obligations. Its discussion of EI economics covers the valuation of subsoil assets, the economic interpretation of ore, and the structure of energy and mineral markets. The volume maps the responsibilities of relevant government entities and outlines the characteristics of the EI sector’s legal and regulatory frameworks. Specific key functions of the sector are briefly discussed, as are the financial structures that underpin environmental and social safeguards; investment of public revenues generated from oil, gas, or minerals; as well as extractive-based economic diversification. The authors hope that decision makers in ministries of finance, international organizations, and other relevant entities will find the study useful to their understanding and analysis of the EI sector.

Governance Frameworks

FAO: Responsible Governance of Tenure and the Law– A Guide for Lawyers and Other Legal Service Providers Go to resource

The FAO Governance of Tenure Technical Guides are part of FAO’s initiative to help develop capacities to improve tenure governance and thereby assist countries in applying the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security. The FAO Governance of Tenure Technical Guides are prepared by technical specialists and can be used by a range of actors. They:

-Translate principles of the Guidelines into practical mechanisms, processes and actions;

-Give examples of good practice – what has worked, where, why and how;

-Provide useful tools for activities such as the design of policy and reform processes, for the design of investment projects and for guiding interventions. 

IGF Mining Policy Framework Go to resource

The Mining Policy Framework (MPF) is a compendium of best practices in mining law and governance. It was developed by governments to provide a framework to guide governments to come up with a mineral regime for sustainable development. It is available in English, French, Portuguese, Russian, and Spanish.

Natural Resource Charter Go to resource

The Natural Resource Charter is a set of principles to guide governments and societies’ use of natural resources so these economic opportunities result in maximum and sustained returns for a country’s citizens. The Charter outlines tools and policy options designed to avoid the mismanagement of these natural diminishing riches and work towards ensuring their ongoing benefits.

Available in Arabic, Bahasa, English, French, and Spanish.

NRGI Reader | Granting Rights to Natural Resources: Determining Who Takes Natural Resources Out of the Ground Go to resource

This reader comes from a series of 20 short, illustrated overviews of key topics in the extractives sector. Together they serve as a robust introduction for the lay reader to fundamental issues and concepts in oil, gas and mining sector governance. They contain helpful figures and infographics, and each reader has a standard format: key messages, concepts, case examples, and a final set of practitioner-orientated questions to ask.

Safeguarding land tenure rights in the context of agricultural investment Go to resource

Ce guide a été développé en réponse aux préoccupations face aux acquisitions des terres à grande échelle et à la nécessité d’augmenter les investissements agricoles. Le guide soutient l’application des Directives volontaires en fournissant des recommandations techniques permettant de protéger les droits fonciers dans le contexte des investissements agricoles, y inclus ceux à emprise foncière. Il vise notamment à fournir des recommandations supplémentaires aux autorités gouvernementales engagées dans la promotion, l’approbation et le suivi des investissements dans toutes les phases du cycle d’investissement. Ce guide peut également servir comme outil de référence pour la mise en œuvre des Principes pour un investissement responsable dans l’agriculture et les systèmes alimentaires, approuvés par le Comité de la sécurité alimentaire mondiale en 2014.

Safeguarding land tenure rights in the context of agricultural investment Go to resource

This guide has been developed in response to concerns regarding large-scale land acquisitions and the need to increase investment in agriculture. The guide supports application of the Voluntary Guidelines on the Responsible Governance of Tenure for Land, Fisheries and Forests in the Context of National Food Security at the national level by providing technical guidance on how to safeguard tenure rights in the context of agricultural investments, including in land. It aims to provide additional guidance to government authorities engaged in the promotion, approval and monitoring of investments at all stages of the investment cycle. The guide also serves as a reference for implementation of the Principles for Responsible Investment in Agriculture and Food Systems endorsed by the Committee on World Food Security (CFS) in October 2014 (CFS, 2014).

The Extractive Industries Sector : Essentials for Economists, Public Finance Professionals, and Policy Makers Go to resource

The extractive industries (EI) sector occupies an outsize space in the economies of many developing countries. Economists, public finance professionals, and policy makers working in such countries are frequently confronted with issues that require an in-depth understanding of the sector. The objective of this volume is to provide a concise overview of EI-related topics these professionals are likely to encounter. The volume provides an overview of issues central to EI economics; discusses key components of the sector’s governance, policy, and institutional frameworks; and identifies the public sector’s EI-related financing obligations. Its discussion of EI economics covers the valuation of subsoil assets, the economic interpretation of ore, and the structure of energy and mineral markets. The volume maps the responsibilities of relevant government entities and outlines the characteristics of the EI sector’s legal and regulatory frameworks. Specific key functions of the sector are briefly discussed, as are the financial structures that underpin environmental and social safeguards; investment of public revenues generated from oil, gas, or minerals; as well as extractive-based economic diversification. The authors hope that decision makers in ministries of finance, international organizations, and other relevant entities will find the study useful to their understanding and analysis of the EI sector.

Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security Go to resource

A reference and guide to improve the governance of tenure of land, fisheries and forests with the overarching goal of achieving food security for all and to support the progressive realization of the right to adequate food in the context of national food security.

Fiscal Regime

The Extractive Industries Sector : Essentials for Economists, Public Finance Professionals, and Policy Makers Go to resource

The extractive industries (EI) sector occupies an outsize space in the economies of many developing countries. Economists, public finance professionals, and policy makers working in such countries are frequently confronted with issues that require an in-depth understanding of the sector. The objective of this volume is to provide a concise overview of EI-related topics these professionals are likely to encounter. The volume provides an overview of issues central to EI economics; discusses key components of the sector’s governance, policy, and institutional frameworks; and identifies the public sector’s EI-related financing obligations. Its discussion of EI economics covers the valuation of subsoil assets, the economic interpretation of ore, and the structure of energy and mineral markets. The volume maps the responsibilities of relevant government entities and outlines the characteristics of the EI sector’s legal and regulatory frameworks. Specific key functions of the sector are briefly discussed, as are the financial structures that underpin environmental and social safeguards; investment of public revenues generated from oil, gas, or minerals; as well as extractive-based economic diversification. The authors hope that decision makers in ministries of finance, international organizations, and other relevant entities will find the study useful to their understanding and analysis of the EI sector.

Local Content

A Practical Guide to Increasing Mining Local Procurement in West Africa Go to resource

  • Date:  2015
  • Sector:  Extractive Industries, Mining
  • Source:  World Bank

This guide provides information, guidance and tools to support decision-making, planning and implementation of mining local procurement in West Africa, in particular at a country level. It can be used by individual role players as well as form the basis of consultative processes. The guide can also support regional harmonization relating to mining local procurement.

The guide addresses questions that are commonly asked by governments, companies, and citizens in the region. How do we define and measure local procurement? Do we create a specific policy or legislation to encourage mining companies to buy more locally? If so, what do these look like, and what has led to successful outcomes in other countries? Do we pick winner productive sectors? How do we best support suppliers to develop the right capacities and standards to meet mine requirements? What institutional framework and which actors need to be involved to deliver? Rather than laying the main responsibility for increasing domestic sourcing on the mining sector, the guide aims at promoting a multi-stakeholder approach, in which all actors have clear roles and responsibilities. This guide has been organised into eight modules that each address a set of related questions that have been consistently raised by role players.

CCSI Mining a mirage: Reassessing the shared-value paradigm in light of the technological advances in the mining sector Go to resource

While there has been a strong tendency in resource-rich countries to push for more stringent local content regulations, the mining sector is looking to move towards increased automation. Such technological advances have the potential to increase health and safety standards as well as productivity of mine sites. However, this disruptive innovation is also likely to reduce in-pit mining workforce, employ a workforce with different skill sets, and require more advanced procurement standards. In this study, CCSI, IISD and Engineers Without Borders researched the technological innovations that are being developed, assessing when these technologies could be rolled out, and quantifying the potential impacts automation may have on local employment and procurement. The objective was to better understand how governments can adapt local content, industrial policies and their vision of the shared value paradigm in order to prepare for and embrace technological advances in the mining sector.

Laws & Regulations

IGF Mining Policy Framework Go to resource

The Mining Policy Framework (MPF) is a compendium of best practices in mining law and governance. It was developed by governments to provide a framework to guide governments to come up with a mineral regime for sustainable development. It is available in English, French, Portuguese, Russian, and Spanish.

IISD Guide to Negotiating Investment Contracts for Farmland and Water Go to resource

  • Date:  2014
  • Sector:  Land & Agriculture
  • Source:  IISD

The IISD Guide to Negotiating Investment Contracts for Farmland and Water is a legal and policy tool for governments and communities that are involved in negotiating investment contracts with foreign investors. The guide focuses on a particular type of contract involving long-term leases of farmland. Part I, Preparing for Negotiations, is designed to assist in the preparatory phase. Part 2, Model Contract, is structured like an investment contract for the lease of farmland and proposes model provisions.

NRGI Reader | Granting Rights to Natural Resources: Determining Who Takes Natural Resources Out of the Ground Go to resource

This reader comes from a series of 20 short, illustrated overviews of key topics in the extractives sector. Together they serve as a robust introduction for the lay reader to fundamental issues and concepts in oil, gas and mining sector governance. They contain helpful figures and infographics, and each reader has a standard format: key messages, concepts, case examples, and a final set of practitioner-orientated questions to ask.

PPP in Infrastructure Resource Center for Contracts, Laws, and Regulation (PPPIRC) Go to resource

A website that provides practical guidance and best practice in the planning, development and legal structuring of infrastructure projects, especially those involving the private sector.

The website includes sample documents, clauses and legislation from the power, water and sanitation, telecom, and transport sectors. It also includes standard procurement and bidding documents. Materials are available in English, French and Spanish.

Public-Private Partnerships Reference Guide: Version 2.0 Go to resource

The PPP Reference Guide is a comprehensive resource for PPP practitioners worldwide, drawing from global approaches and experiences.

The PPP Reference Guide seeks to provide advice on what PPP practitioners should know, rather than provide advice on what to do. The Guide sets out the main topics, looks at the key issues that must be addressed, and provides some of the most important references that PPP practitioners can turn to for answers and to enhance their own knowledge and understanding.

The website is also available in French and Spanish, but the document is only available in english.

It is structured into separate sections that focus on three main areas:

  1. What are PPPs, when might they be used and what are the advantages and disadvantages relative to public provision;
  2. What kind of policy, legal and institutional frameworks should be put into place to help improve their effectiveness; and
  3. What are the ways in which PPP projects can be developed and implemented.

A diverse range of case studies and institutional solutions, from all parts of the world, are presented in the PPP Reference Guide.

Railway Reform: Toolkit for Improving Rail Sector Performance (2011) Go to resource

  • Date:  2011
  • Sector:  Infrastructure
  • Source:  PPIAF

Provides an easy-to-use resource on the rail industry—what it is and what it does best—and provides an experience-based set of best practices to aid in the planning and execution of railway reforms. Professionals and practitioners who could benefit from this toolkit include government policy makers, legislators, regulators, railway management personnel, international financial institutions, and other stakeholders-including railway customers and employees—who seek improvements in railway financial and operational performance.

The toolkit is now available in English and Russian.

Safeguarding land tenure rights in the context of agricultural investment Go to resource

Ce guide a été développé en réponse aux préoccupations face aux acquisitions des terres à grande échelle et à la nécessité d’augmenter les investissements agricoles. Le guide soutient l’application des Directives volontaires en fournissant des recommandations techniques permettant de protéger les droits fonciers dans le contexte des investissements agricoles, y inclus ceux à emprise foncière. Il vise notamment à fournir des recommandations supplémentaires aux autorités gouvernementales engagées dans la promotion, l’approbation et le suivi des investissements dans toutes les phases du cycle d’investissement. Ce guide peut également servir comme outil de référence pour la mise en œuvre des Principes pour un investissement responsable dans l’agriculture et les systèmes alimentaires, approuvés par le Comité de la sécurité alimentaire mondiale en 2014.

Safeguarding land tenure rights in the context of agricultural investment Go to resource

This guide has been developed in response to concerns regarding large-scale land acquisitions and the need to increase investment in agriculture. The guide supports application of the Voluntary Guidelines on the Responsible Governance of Tenure for Land, Fisheries and Forests in the Context of National Food Security at the national level by providing technical guidance on how to safeguard tenure rights in the context of agricultural investments, including in land. It aims to provide additional guidance to government authorities engaged in the promotion, approval and monitoring of investments at all stages of the investment cycle. The guide also serves as a reference for implementation of the Principles for Responsible Investment in Agriculture and Food Systems endorsed by the Committee on World Food Security (CFS) in October 2014 (CFS, 2014).

The Extractive Industries Sector : Essentials for Economists, Public Finance Professionals, and Policy Makers Go to resource

The extractive industries (EI) sector occupies an outsize space in the economies of many developing countries. Economists, public finance professionals, and policy makers working in such countries are frequently confronted with issues that require an in-depth understanding of the sector. The objective of this volume is to provide a concise overview of EI-related topics these professionals are likely to encounter. The volume provides an overview of issues central to EI economics; discusses key components of the sector’s governance, policy, and institutional frameworks; and identifies the public sector’s EI-related financing obligations. Its discussion of EI economics covers the valuation of subsoil assets, the economic interpretation of ore, and the structure of energy and mineral markets. The volume maps the responsibilities of relevant government entities and outlines the characteristics of the EI sector’s legal and regulatory frameworks. Specific key functions of the sector are briefly discussed, as are the financial structures that underpin environmental and social safeguards; investment of public revenues generated from oil, gas, or minerals; as well as extractive-based economic diversification. The authors hope that decision makers in ministries of finance, international organizations, and other relevant entities will find the study useful to their understanding and analysis of the EI sector.

Investment Policies

Attracting Investors to African Public-Private Partnerships: A Project Preparation Guide Go to resource

  • Date:  2009
  • Sector:  Infrastructure
  • Source:  PPIAF

This publication is an earlier version of the book above on "How to Engage with the Private Sector in Public-Private Partnerships in Emerging Markets". This book was aimed at African public sector officials while the updated version focuses beyond Africa with a wide range of case studies from several regions and sectors to show a more global perspective and experiences. 

The publication is also available in French.  

NRGI Reader | Granting Rights to Natural Resources: Determining Who Takes Natural Resources Out of the Ground Go to resource

This reader comes from a series of 20 short, illustrated overviews of key topics in the extractives sector. Together they serve as a robust introduction for the lay reader to fundamental issues and concepts in oil, gas and mining sector governance. They contain helpful figures and infographics, and each reader has a standard format: key messages, concepts, case examples, and a final set of practitioner-orientated questions to ask.

Safeguarding land tenure rights in the context of agricultural investment Go to resource

Ce guide a été développé en réponse aux préoccupations face aux acquisitions des terres à grande échelle et à la nécessité d’augmenter les investissements agricoles. Le guide soutient l’application des Directives volontaires en fournissant des recommandations techniques permettant de protéger les droits fonciers dans le contexte des investissements agricoles, y inclus ceux à emprise foncière. Il vise notamment à fournir des recommandations supplémentaires aux autorités gouvernementales engagées dans la promotion, l’approbation et le suivi des investissements dans toutes les phases du cycle d’investissement. Ce guide peut également servir comme outil de référence pour la mise en œuvre des Principes pour un investissement responsable dans l’agriculture et les systèmes alimentaires, approuvés par le Comité de la sécurité alimentaire mondiale en 2014.

Safeguarding land tenure rights in the context of agricultural investment Go to resource

This guide has been developed in response to concerns regarding large-scale land acquisitions and the need to increase investment in agriculture. The guide supports application of the Voluntary Guidelines on the Responsible Governance of Tenure for Land, Fisheries and Forests in the Context of National Food Security at the national level by providing technical guidance on how to safeguard tenure rights in the context of agricultural investments, including in land. It aims to provide additional guidance to government authorities engaged in the promotion, approval and monitoring of investments at all stages of the investment cycle. The guide also serves as a reference for implementation of the Principles for Responsible Investment in Agriculture and Food Systems endorsed by the Committee on World Food Security (CFS) in October 2014 (CFS, 2014).

The Extractive Industries Sector : Essentials for Economists, Public Finance Professionals, and Policy Makers Go to resource

The extractive industries (EI) sector occupies an outsize space in the economies of many developing countries. Economists, public finance professionals, and policy makers working in such countries are frequently confronted with issues that require an in-depth understanding of the sector. The objective of this volume is to provide a concise overview of EI-related topics these professionals are likely to encounter. The volume provides an overview of issues central to EI economics; discusses key components of the sector’s governance, policy, and institutional frameworks; and identifies the public sector’s EI-related financing obligations. Its discussion of EI economics covers the valuation of subsoil assets, the economic interpretation of ore, and the structure of energy and mineral markets. The volume maps the responsibilities of relevant government entities and outlines the characteristics of the EI sector’s legal and regulatory frameworks. Specific key functions of the sector are briefly discussed, as are the financial structures that underpin environmental and social safeguards; investment of public revenues generated from oil, gas, or minerals; as well as extractive-based economic diversification. The authors hope that decision makers in ministries of finance, international organizations, and other relevant entities will find the study useful to their understanding and analysis of the EI sector.