The roots of local content issues – government
- 6 January 2025
- Posted by: Trudi Stevens
- Category: energy excellence
Without understanding the roots of local content issues we cannot find a path that leads us to nation building. Local content is one of the builders of that path.
The perceptions and expectations of local content are overlaid with deeper needs for reparation, hope and ambition. This leads to local content based on transaction – ‘we will allow you to extract our finite resource and in exchange we demand that you put right 100 years of exploitation and harm’. That may not be the perception of those designing the policy but it is how it is often sold to the electorate.
Unfortunately, that equation doesn’t work either mathematically or socially. Political figures will tell their audience that it will work as they offer to make another bargain – ‘believe I will give you this in exchange for putting me into power’, the cry of autocrats around the world.
In the last blog I gave 3 examples of where issues lie with local content – Government, local skills and local industry and multinational corporations. There are more but they tend to be satellites of these three. These three deserve deeper analysis and I will focus on Government first. I will then look at the next two issues and at how we can use this deeper understanding to build towards nation building.
Policy design and lack of institutional capacity
I described issues with poor policy design and a lack of government resources (people, knowledge, experience) in the face of those with a hundred times more resources (quite literally – some international companies have turnover hundreds of times bigger than the national GDP of the government they are engaging with).
Another issue is the common complaint that each Government and their Ministers are looking towards the next election. Local Content, by its nature, is a generation long process taking that long to clearly demonstrate its maximum impact. It is tempting to take short cuts and demand unrealistic targets from International Companies (ICs) to promise the electorate in exchange for votes. I recently read a politician up for re-election saying, “this 10% (return to the government as part of the extractive licence) doesn’t work for me – I demand 30%”. If she had done her research, she would have known that 30% return would have meant the operation would never have even started.
Why so few government resources? It was not due to lack of effort or opportunity. Millions of dollars have been spent over decades trying to increase the capacity of government functions but did not bring about ‘good change’. Why?
Lack of institutional capacity
The nature of institutions
Institutions are not mechanical machines to be fixed, they are groups of people working towards a common purpose. Those people behave according to agreed norms and rules. They understand the meaning of their work and the value of their institutions. They are impacted by the actions of powerful ‘players’ and by internal and external forces. Getting those people to work towards a common purpose means understanding their norms and rules, their values and giving them the ability to cope with the actions of the ‘players’.
I taught occupational health and safety (OHS) to young Saudi women. In the UK, OHS is justified for three reasons:
- Legal – compliance;
- Financial – breaches are expensive;
- Moral – we should protect people.
In the UK, I found it was easy to explain the Legal and Financial reasons but the Moral reason was harder to justify. In Saudi, the students were fairly indifferent to the first two – “Miss, we have no health and safety law”; “Miss, we are rich, we can afford the cost”. I fell back on my knowledge of their values and their norms and reminded them that they had a duty, under their great and noble religion, to protect all life. This they agreed with. I then described how their duty to protect life extended to people at work – and watched as the light came on in their eyes. That programme became the elite programme of the college and many of those young women are now employed in the health and safety sector.
Local content must make sense to everyone who benefits from it, who indirectly benefits from it and even those who simply observe it. It needs to be based on their values, their norms, their understanding of what work means to them. The fact that this is different for every individual demonstrates the importance of local consultation and local communication.
Economic necessity
The civil servants and students who benefited from programmes funded by external donors received excellent and relevant training and education. They were willing and diligent students and graduated from these programmes with internationally recognised skills sets and sometimes qualifications. They were then frequently offered jobs by the international companies, on international salaries, or they emigrated with their new economic value, lost to the nation that they were trained to build.
Coping with the ‘players’
Who are ‘players’? They are individuals with power who act in their own capacity and those who act on behalf of powerful interests. To negotiate with a player who is perceived to be more powerful than you requires strong self belief, belief in the rules and value of your institution.
This happy state is achieved through clear and enforceable policies and procedures, protection by senior colleagues and transparency – bad behaviour is sanitised by exposure to the light created by shared values. It is achieved by the courageous actions of people, not the computer the policies are written on.
Corruption
Which leads onto the sickness that is corruption. Corruption exists in most countries but takes different forms based on perception. the UK, Canada and Norway have forms of corruption some of which is tolerated or even encouraged.
Government, institutional and international company corruption is one of those human activities that occupies the same space as cruelty and family abuse. It invokes the same response when challenged – ‘it’s my right’, ‘it’s my culture’, it’s my business’.
No, it is none of those things. The truth is that corruption is as seedy, as foul and as destructive as the rest of the dishonourable and nasty bedfellows it shares space with. It does not have one single redeeming feature and it contaminates every human who comes into contact with it.
The impulse for corruption is found in every country and in every institution. So are other unacceptable and vile impulses but they are not tolerated. Corruption grows, like an infection, from culture. It is eliminated in the same way – by changing the culture, by enforcing values and by exposure to the light. It is universal – corruption has the same stink whether it is conducted in your own country or in someone else’s.
Fortunately, it is a disease that has a remedy and local content can be part of that medicine, instead of being part of the disease.
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