Local Content Policies Design and Implementation

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Local Content Policies Design and
Implementation Issues
Conference on Local Content Policies
in the Oil, Gas and Mining Sectors
Vienna, October 1, 2013
Local Content Mechanisms
Definition
 What does local content
include?
 Legal loopholes – what
is a “local company”?
 Local vs. National
Content
Framework
 Voluntary scheme –




Company dependent
Non-binding framework
– Chile
Legislation – TimorLeste
Contracts – Worldwide
Bids – Brazil
Trade and Investment Treaties
 WTO: Aim to lower tariffs and non-tariff barriers
 Limiting performance requirements related to trade in goods
(TRIMs Agreement in 1995)
 Limiting performance requirements related to trade in services
(GATS Agreement in 1995)
 Limiting performance requirement related to government
procurement (GPA Agreement in 1996)
 Bilateral and Multilateral Trade and Investment Treaties
 International investment agreements with Japan, USA, Canada
and others forbid performance requirements beyond TRIMs
 NAFTA: Example of Mobil vs. Canada case
Implementation
• Demand from
Investment
• Identifying
gaps
• Identifying
potential
• Quantifying
impact
• Setting the
right targets
• Developing
indicators
• Updating
targets
• Tender process
• Audit capacity
• Reporting
requirements
•Transparency
Holistic Approach
Cooperation
• Implementation
Committees
• Procurement
Communication Plan
• Information Sharing
Platform
• Financing
• Capacity Building
• Facilitating Joint
Ventures
• Cluster Development
• Industrial
Policy
• SME Policy
• Education
Strategy
• PPP Potential
• Best practices
• One stop shop
• Capacity
Building
• Project
alignment
• Monitoring
• Dissemination
Questions
 Are market forces sufficient to increase local content?
 Should future trade and investment treaties further restrict
domestic local content policy discretion?
 What is the principle stumbling block in practice for the
successful implementation of a binding local content policy?
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