To maximise the benefits of mineral resource exploitation, most resource rich countries have local content legislation in place. Benefits can come in a variety of ways from increasing employment levels, creating a more inclusive economy or increasing government revenues from taxation. Levers to achieve these can include: local procurement and employment practices; community investment; local processing; and capacity building. How these are used varies by location and is inherently linked with other national policies such as education, innovation, infrastructure and finance. These complexities can impair the effectiveness of local content legislation. International organisations such as the Inter-Governmental Forum for Mining and Sustainable Development and the OECD are developing guidance on this. SRK UK has produced a top ten do’s and don’ts for local content management that draws on current thinking and good practice. These points are aimed at both industry and governments hosting projects, and demonstrate the collaborative effort essential for achieving positive change.
Ten do’s and don’ts for local content management:
- Do define ‘local’ based on area of impact and regional characteristics as well as government and regulatory body requirements.
- Don’t regard local content solely as a purchasing or contracting issue, include procurement human resources and community relations teams in preparing a local procurement implementation and monitoring plan.
- Don’t assume that local people are only capable of basic or unskilled work. Determine what skills are available locally that can be used and or developed to support manpower and supply requirements of the project.
- Do map the supply chain to identify opportunities for different suppliers based on size, capacity and location.
- Do explore how to maximise your local economic impact through the supply chain and look at how local companies can fulfil contracts.
- Don’t assume that a local branch of a national or international supplier or contractor is the same as a local supplier.
- Do include a requirement for all contractors to provide work and training opportunities.
- Do liaise with local businesses and government to develop a set of transparent procurement and employment criteria that includes a weighting for sourcing manpower and supplies within the defined local area.
- Don’t wait until the project has started to identify local employment and supplier opportunities across the project’s life, prioritise this as soon as possible.
- Do work with local government and training providers to maximise skills development and training opportunities required to work on the project and elsewhere post closure.
