Extractives sector development assistance

How we are helping

2016-17 Budget Estimate:
$17.7 million

Why we give aid

Population growth, rapid urbanisation and industrialisation have fuelled global demand for metals, minerals, oil and gas, creating rapid growth in investment. The extractives and energy sectors drive trade, economic growth and development in the Indo-Pacific region by creating jobs and boosting government revenues. Yet investment in developing countries’ extractives sectors comes with many challenges. Many resource-rich developing countries perform worse than less-endowed countries on human development indicators.

Australia aims to support developing countries to maximize sustainable benefits from their natural resources, while helping them overcome the challenges. Through engagement in the extractives sector we can assist resource-rich developing countries to strengthen relationships with the private sector, improve governance and revenue management and build technical skills. Continued support in this area is also important for businesses wanting to trade with, and invest in, stable and predictable overseas environments.

How we give aid

We work with multilateral organisations, other government agencies, non-government organisations, universities and the private sector to assist partner governments to maximise the development potential of their extractives sectors. Our activities focus on strengthening the capacity of governments in the Indo-Pacific region.

Multilateral approaches have proven effective to reduce corruption and improve the transparency, accountability and management of extractives related payments, benefitting both host countries and investors:

  • Australia provides funding to the Extractive Industries Transparency Initiative (EITI), the Extractive Industries Technical Advisory Facility, and the International Monetary Fund’s work on managing natural resource wealth.
  • Australia is a government member of the Voluntary Principles on Security and Human Rights Initiative, which provides practical human rights guidelines to support extractives sector operations.
  • As a major diamond producer, Australia is also active in the Kimberley Process Certification Scheme, a joint government, industry and civil society initiative to stem the flow of conflict diamonds.

Important examples of Australia’s results to date through global extractives sector initiatives include:

  • The establishment of the International Mining for Development Centre (IM4DC), in partnership with the University of Western Australia and the University of Queensland. By end June 2015 the IM4DC will have trained more than 2000 people from over 50 developing countries through 90 short courses, workshops and study tours.
  • Australian mining awards, which build an engaged and influential network of leaders, advocates and change-makers. Since FY 2011/12 more than 200 mining related scholarships and fellowships have been provided for study at 32 Australian institutions.
  • The Leading Practice Sustainable Development Program for the Mining Industry which has developed fifteen handbooks to address key issues related to sustainable development of the extractives sector. These handbooks have been translated into six languages.

Australia is engaged in extractives sector activities in several countries in the Asia-Pacific region and in Africa. These activities form a critical part of the economic development portfolio of each country or region:

  • In Burma, Australia and the UK are co-funding the Natural Resource Governance Institute to support local civil society organisations to improve extractives governance and engage in Burma’s EITI process.
  • In Indonesia we are supporting an Indonesian think tank to address extractives sector transparency; supporting Indonesian EITI implementation through the World Bank; and promoting linkages between Australian universities (ANU and Charles Darwin) and local Indonesian Governments to monitor environmental and social risks of artisanal and small-scale mining in SE Sulawesi and NTT provinces.
  • In Mongolia we have commenced the delivery of the Australia-Mongolia Extractives Program to increase the benefits for the Mongolian people of the development of the resources sector in Mongolia.
  • In Papua New Guinea (PNG) we are assisting to progress PNG’s EITI candidacy and have supported Autonomous Bougainville Government efforts to ensure inclusive consultations on mining policies and negotiations.
  • In Africa we have supported African led initiatives such as the African Minerals Development Centre, as well as skills development, community partnerships and governance reform in a number of countries including Mozambique, Zambia and Tanzania.

DFAT’s future extractives support in the region will build on work undertaken to date, and will explore new directions in the energy sector. There will be a continued emphasis on improving extractives governance, revenue management and benefit sharing. An APEC Mining Sub Fund inaugurated by DFAT will enable countries in the region to build cooperation between governments and the private sector. DFAT seeks to collaborate more closely with the private sector, including through sharing infrastructure and services. We will also work with other bilateral donors to ensure our support helps developing countries maximise returns from their largest economic assets to drive their own economic growth and development.

 




A group of people standing in front of a large yellow truck
Australia is engaged in extractives sector activities in several countries in the Asia-Pacific region and in Africa.