Petroleum Governance Initiative (PGI) Pillar 3: CommDev Dafna Tapiero NTF-PSI Consultations Washington, DC November 11, 2008

Pillar 3: Community Development Objectives  Oil, Gas and Mining Sustainable Community Development Fund (CommDev) established to “raise the bar” on how investors embark on community development around oil, gas, and mining projects.  CommDev aims to bring funding and expertise to support innovative projects designed to ensure that communities surrounding oil, gas and mining operations derive sustainable benefits from them.  Particular focus on the demand and supply side of local revenue management, helping to ensure a community’s capacity to participate and benefit from developments; focus on local government capacity building and increasing local content in supply chains.  Disseminate good practices in community development Modus operandi  Build on CommDev delivery mechanism and IFC/World Bank task management and investments/loans  Build on Norwegian experience  Seek out innovative, replicable programs, create public goods Accomplishments

CommDev in General Accomplishments  As of November 2008, CommDev has funded 15 technical assistance projects  14 projects are in the pipeline.  For every $1 of CommDev funds, leveraging $2.5 from others  CommDev is aiming to change the way community development projects are implemented using leverage to require increased participation of stakeholders greater definition of monitoring and evaluation frameworks more practical tool development increased use of local counterparts  Information Clearinghouse – CommDev.org - launched exactly one year ago

Information Clearinghouse:

CommDev.org A repository of over 2,000 resources available of CommDev’s knowledge, case studies, tools, and research collected from its network of internal and external community development practitioners. CommDev.org has established itself as a “go to” resource for information and knowledge - through its partners and own experience - on grappling with community development issues in extractive industries. 600 users visit the site every day, with an average duration of 11 minutes per visitor. The hits on this site show a steady increase over the last year, tripling in number over the 9 months. The countries registering the greatest number of users are the United States, United Arab Emirates, Great Britain, Argentina, Germany, Canada, South Africa, China, India, Australia, Saudi Arabia and Nigeria. Norway??

CommDev Projects in Colombia: Oil Royalty Management 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.  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. Progress  Delays in the project schedule due to new municipal administrations.  The assessment methodology for municipal investment applied in the five selected municipalities – measures and compares municipal performance.  Investment assessments and technical assistance plans were completed in these five municipalities.  ECOPETROL committed financial contribution, beyond scoping phase, to include the implementation phase  Consulting firm hired to assist in implementation of the technical assistance plans.  IFC and the Colombian Association of Petroleum (ACP) have formed an alliance to disseminate royalty management best practices. Partners: Ecopetrol, ACP, IFC Latin America Facility Start of Project Implementation: January/February 2007

CommDev Project in Colombia: Social Accountability “sub-national EITI” Objective  To improve accountability of 4 municipal governments to communities related to the use of oil royalties in Colombia - community-led tracking of municipal oil royalties investment (demand side of governance), based on experience from Comm-Dev funded project in Peru Deliverables  Technical assistance and training to Regional Royalty Committees Delivering a standard methodology to monitor municipal investments Monitoring Royalty Committees’ progress and fine tuning their operations.  Networking and communication strategy Supporting a national network of Royalty Committees Communication and disseminating Partners: Ecopetrol, Oil companies Start of Project Implementation: June 2008

CommDev Project in Bolivia: Building Capacity of Indigenous Businesses Objective  Enhance the commercial viability of 4 community-based businesses to serve as models for other recipients of funding from Transierra S.A.’s Indigenous Development Plan's Support Program  Promote community development through long-term business planning.  Increase in the gross sales and net income of the community based SME's and indirectly the net income of other communities acting as suppliers of raw products. Progress  The productivity and commercial (market analysis) diagnostic of the four projects has been completed on which bases the demand for each project's product(s) has been tested.  The business plans for the four projects have been completed, formally approved via assembly decision and officially handed-out to each Guaraní Great Captain on public event held on July 24,  The business plans identify potential sources of finance that have already been approached by the Great Captains or their representatives. The Captaincy of Takovo Mora has already secured non-reimbursable funding (Ministry for Production and Micro-Enterprise). Partners: NIPP, IFC Latin America Facility, IFC Oil, Gas and Mining Dept Start of Project Implementation: November 2007

Pipeline: Peru - Expansion of Peru Revenue Management and Social Accountability projects Objective  To build and expand on the success of the revenue management and social accountability projects in the mining sector for municipalities impacted by oil and gas.  Support an effort to bring the revenue management and MIM experience to a global level. Partners: PeruPetro, PeruLNG, and more Start of Project Implementation: December 2008

Pipeline: Peru – Multistakeholder Participatory Planning & Monitoring Objective  Replicating workshop delivered in Ghana  Bring leading extractive industries companies, community leaders and local government officials together to share experiences and new methods for maximizing the benefits that extractive industry projects can bring to local people. Partners: PeruPetro, PeruLNG, and 5 other EI companies Start of Project Implementation: February 2009

Pipeline: Financial Valuation of the Return on Sustainability Investments: Objective  To quantify the dollar value of investment in community-assistance projects.  To refine the Sustainability Business Case developed for Rio Tinto Alcan (RTA), in order to develop a generic tool for the IFC that could be used for extractive industry projects globally. Deliverable/Outcomes  Captures the incremental benefit and cost of the social investment  Help extractive companies assess the bottom-line return of sustainable investments  Strengthen claims that sustainability interventions impact both the community and the company in potentially significant inter-related ways  Provide a public knowledge good for new capacity building programs for IFC staff, companies and civil society Partners: Rio Tinto Alcan, PAE Start of Project Implementation: November 2008

Pipeline: India – Cairn Community Development Strategy Objective  To improve strategic approach to community development along pipeline that is being expanded Deliverables  Strengthen the business case for community development.  Build capacity within Cairn to develop a multi-stakeholder “owned” strategy over the life of the pipeline.  Build local capacity in NGOs and districts to deliver programs to benefit communities  Develop a public good to help other companies go through this process Partners: Cairn Start of Project Implementation: December 2008

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