Defining the “Local” in Local Content Requirements in the Oil and Gas and Mining Sectors in Developing Countries

Nwapi Chilenye ()
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Nwapi Chilenye: Canadian Institute of Resources Law – Law, MFH 3344, 2500 University Drive NW, Calgary, Alberta, Canada T2N 1N4 University of Calgary – Law, Faculty of Law MFH 3344, 2500 University Drive NW, Calgary, Alberta, Canada T2N 1N4

The Law and Development Review, 2015, vol. 8, issue 1, 187-216

Abstract: This paper examines how the term “local” has been understood in the definitions of “local content” in selected jurisdictions in developing countries. The paper critiques the centralist approach adopted by these countries that defines local content in terms of first consideration being given to their “nationals.” Little or no thought is given to the local populations who live in the area where the resource extraction takes place. The paper argues that if policymakers do not pay close attention to how “local” is defined, the benefits of local content requirements (LCRs) may be captured by “outsiders.” A bottom-up approach that recognizes the local populations where the extractive activities take place can help developing countries to prevent or douse resource conflicts. Community frustration resulting from seeing lucrative jobs given to “outsiders” can stir up conflicts. Given that revenues from extractive resources are managed by national governments in most jurisdictions, LCRs can provide a mechanism to meet the demands of subnational stakeholders, such as local governments and communities. This will in turn enable companies to obtain the social license to operate.

Keywords: local; local content; subnational; competitiveness (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1515/ldr-2015-0008

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