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All You Need To Know About The Natural Resource Charter Framework

The Natural Resource Charter (NRC) is a set of principles intended for use by governments, societies, and the international community to determine how best to manage natural resource wealth for the benefit of current and future generations of citizens. The NRC framework covers 12 focal areas known as Precepts.

The 12 precepts cover the different kinds of decisions and policies that are required to successfully govern a countries petroleum sector in a way that benefits present and furture citizens.

The charter does not prescribe specific approaches but instead identifies 12 broad ‘precepts’, which cover the main decisions required to transform assets under the ground into development above ground. The Precepts are:

Precept 1: Strategy, legal framework, and institutions: Resource management should secure the greatest benefit for citizens through an inclusive and comprehensive national strategy, clear legal framework, and competent institutions.

Precept 2: Transparency and accountability: Resource governance requires decision makers to be accountable to an informed public.

Precept 3: Exploration, licensing, and monitoring operations: The government should encourage efficient exploration and production operations, and allocate rights transparently.

Precept 4: Taxation and other company payments: Tax regimes and contractual terms should enable the government realise the full value of its resources consistent with attracting necessary investment, and should be robust to changing circumstances.

Gas flaring

Precept 5: Local impacts: The government should pursue opportunities for local benefits and account for, mitigate, and offset the environmental and social costs of resource extraction projects.

Precept 6: State-owned enterprises (SOEs): Nationally-owned companies should be accountable, with well-defined mandates and an objective of commercial efficiency.

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Precept 7: Investing for growth: The government should invest revenues to achieve optimal and equitable outcomes, for current and future generations.

Precept 8: Stabilising expenditure: The government should smooth domestic spending of revenues to account for revenue volatility.

Precept 9: Public spending: The government should use revenues as an opportunity to increase the efficiency of public spending at the national and sub-national levels.

Precept 10: Private sector development: The government should facilitate private sector investments to diversify the economy and to engage in the extractive sector.

Stream polluted by oil spill

Precept 11: Role of extractive companies: Companies should commit to the highest environmental, social, and human rights standards, and to sustainable development.

Precept 12: Role of international community: Governments and international organisations should promote an upward harmonisation of standards to support sustainable development.

About the NNRC

The Nigeria Natural Resource Charter (NNRC) implements the NRC in Nigeria. It is a non-profit policy institute that promotes the effective management of natural resources for the public good.

Tengi George-Ikoli

Tengi George-Ikoli, NNRC program coordinator

It is led by an esteemed panel of experts on natural resource governance that convenes on a biannual basis to analyse the governance issues relating to the petroleum sector in the country.

The NNRC conducts a study known as the Benchmarking Exercise Report (BER). The BERs are carried out to assess the governance of Nigeria’s petroleum wealth. The reports uses the NRC framework, developed by a diverse set of internationally renowned experts on natural resource management to conduct the assessments. The 2017 BER is the latest in the series, with the first two produced in 2012 and 2014 respectively.

In 2016, the framework was revised to aid a more contextual and detailed approach in obtaining results to ensure accurate analysis of the resource sector. This revised framework is the basis for the 2017 edition of the exercise. It analyses the governance of petroleum wealth in Nigeria and identifies crucial changes that have taken place in the sector since the last benchmarking exercise was conducted.

For the 2017 edition, the NNRC entered into a partnership with a consortium of civil society organisations (CSOs) comprised of the Centre for Public Policy Alternatives (CPPA), Civil Society Legislative and Advocacy Centre (CISLAC), the Centre for the Study of the Economies of Africa (CSEA), the Centre for Social Justice (CSJ), and Social Action (SA).

The assessment of Nigeria’s performance against these principles was led by a panel of independent Nigerian experts on natural resource governance. The panel is composed of former government officials, private sector and civil society representatives, and leading academics.

This multi-stakeholder composition has been essential to ensure the integrity, balance, and scope of the panel’s work. Oversight and coordination was provided by the local secretariat of the NNRC under the supervision of the Programme Coordinator, Tengi Goerge-Ikoli.

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