 Good. The conversation we're going to have is best practices in the extractive industry. I'm very happy that Minister Parity is with us to make some introductory remarks. I was very enthusiastic about having this conversation about the extractive industry and we've got really an excellent panel to talk about. We have Anita George, who's a Senior Director for Global Practice on Energy and Extractives for the World Bank Group. We have Daniel Dumas, who's the Executive Director of Canadian Institute for Extractive Industries and Development. Perfect for this. Marty Flaks, who's the Deputy Director of the Office of Energy Programs at the Department of State. And then Joanna Nesseth-Tuttle, who's the Manager for Development and Public Policy, Government and Public Affairs at Chevron Corporation and is a CSIS alum. So thank you for being here. So I think we've got the right panel for this, but the reason I thought this was important is that when I said earlier as a 51 of 54 Sub-Saharan African countries are either developing oil and gas resources or they're going to be and when 60% of oil and gas comes from the developing world that is managing these resources and attracting investment are these going to be more or less salient over the next 5 to 10 years? They're going to be more salient over the next 5 to 10 years. So my view is that Canada has a lot to teach us about how to attract investment, how to respect property rights, how to respect contracts and then how to manage those resources in a responsible way. And so people come to Canada, they come to Australia, they come to Nordic countries to learn how to do that in an effective way. So really appreciate having Minister Parity who comes from a mining background so knows something about this conversation is also the former Commerce Minister. So I think it's, again, it's another one of these nexus issues between the private sector and development and there's a governance overlay to all this. So Minister, please come on up and just share a few thoughts with us. Thanks very much for being here again. Please welcome the Minister. Thank you very much, Dan. This is a great honor to be here today for the second time. As you alluded to, I think it's important. Yes, I am coming from a mining town and I could appreciate firsthand how it makes a big and positive difference for a development community. I think I should start this way. Let's put it simply as it is. I'll just say Canada works to advance international standards and guidelines to improve performance by all actors involved in the extractive sector. This is what we want to do. As you just alluded, Dan, we can agree that No Country is a better example of harnessing resource wealth for development than Canada, especially in mining sector. We're very proud that our natural resource endowments have helped us build sustainable, diversified, and growing national economy. And our resource sector experience and expertise have long sustained on economic growth, and it has to be done correctly with basic principles as good governance, rule of law, transparency, predictability. So this is why we're proud to say today that Canada is well-known as a world leader in responsible resource development. And further, the Canadian approach to the sector strengthens community engagement so all stakeholders can benefit from natural resource development. I think this is a key fundamental principle here. So this is why also so many partners in the developing world turn to us for advice on how best to manage their natural resources. And there is no doubt that a responsibility-managed resource sector can deliver economic opportunities, jobs, and trainings, as well as indirect benefits such as better healthcare, education, and public services for the most vulnerable. Women and children, which is also a priority for Canada. In fact, increasing transparency and accountability in natural resource development is the only way to know for sure that the long-term benefits are being enjoyed by all citizens. I should just go a little bit over the programming that we have to demonstrate, concretely speaking, that we want to be a leader in this kind of responsible natural resources development. So of course we are committed to working with developing country to build resource governance capacity, promote local economic development, and enable communities to get the maximum benefit from the extractive sectors. And this is why I was very proud to announce the launch of the Canadian International Institute for Extractive Industries and Development. I see Daniel Zuma here, very happy. I think this is a tremendous way that we can, and therefore, to share best practices more widely. Also, we support the implementation of the Extractive Industries Transparency Initiative in many countries. I think it's very fruitful. We saw a lot of progress so far, and I think this is something to watch and follow. We also invested $1.1 million to the International Institute for Sustainable Development, so that helps developing countries to strengthen their mineral development regimes and promotes an integrated approach that increases water, energy, and food security. In Ethiopia, for example, we are contributing $15 million towards strengthening education for mining, and this will ensure that both men and women benefit from employment opportunities and the extractives sector in fields such as geology and mining and generating. I have to mention also that we are the largest donor to the African Minerals Development Centre. We expect the Centre to be the source of technical expertise to help African countries manage their mining sectors and harmonize policies across member states. We're also working with the Association of Canadian Community Colleges on a six-year project in Mozambique that will help Mozambicans develop the skills required to meet the demands of an extractive sector in full growth. Two-year project that has helped the Government of Mozambique create a policy on corporate social responsibility, and we have also created the Extractives Cooperation for Henance Economic Development, which is called ECCID, and individual projects to be funded on their ECCID will leverage Canadian expertise in strategic partnerships, and we'll use these partnerships to help build the capacity of African countries to maximize the benefits of their own resources' wealth. The Energy Sector Capacity Building Project that will help the Government of Tanzania also is a good project. This will develop its growing natural gas sector and inform public-private partnership for power generation. This project includes support to the Tanzanian Vocational Education Training Authority to support the training of petroleum professionals. So that gives you a little bit of a snapshot about what we are doing here. We are very, very keen to continue to go down this way. I've been loud and clear. There is a strong political will to explore all of the opportunities that we have, seize the opportunities, and make sure that also we do support adequately the initiatives, but the organizations that just talked about the Canadian International Institute and ECCID and other projects like that. I must mention also on this point that we have started new development programs in Burma and Mongolia, both countries with considerable potential in extractive industries. For example, Canada aims to strengthen Mongolia's management of its extractive sector by improving the quality and transparency of Mongolia's policies and laws as they relate to the mining sector as well as the professionalism of their civil service. So we know that a vibrant civil society enables people to hold their governments to account, lead the life of dignity and participate in decision-making that affects them. And there is no doubt in my mind that this contributes toward reducing poverty and ensuring sustainable development. And this is why Canada is using its development dollars to invest in people so that communities can gain the maximum benefit from emerging economic opportunities. So there are projects like that. We have a good list of projects like that in which we support civil society. It's good to work on strengthening state capacity governance, to involve the people. This is a people matter here. So this is on that note that I will leave you just to tell you that our government, my department is focusing on growing economies more sustainably, managing resources more responsibly and working to reduce poverty with the means I just alluded to. So Dan, thank you again for having this opportunity. It's an honor for me to share these comments on this tribute. Thanks very much, Minister. Thank you. Thanks a lot. I really appreciate it. Thanks for doing this. Okay. Great. We really have a great panel. I want to especially thank Anita George who has a very busy week. I suspect it's the World Bank annual meeting. So thanks for making time in your schedule to be with us. And also Daniel Dumas who gets the award for flying in the farthest. I suspect to be with us along with Ian Brody who also came from far away to be with us. So we have a really great panel. You have their bios in the folders so I won't get into too much detail about them but this is a very qualified panel to discuss this important challenge at the nexus of development and extractive resource management as well as attracting investment. How do you manage these issues? It's a question of governance, a question of civil society, it's a question of private investment and it's a critical development question. So I'm going to start first with Anita. You're currently at the World Bank. You're running a functional program where you focus on a variety of extractive policy issues. In many ways you're at the center of developing country policy and private sector activities and you're often part of the conversation with developing country governments around the promise of extractive. So how is the World Bank thinking about this issue and how, talk a little bit about how your work impacts on this conversation of managing extractive wealth. Thank you very much, Daniel and thank you all for having me here for inviting me. I have to say I have a huge soft spot for Canada and Canadians because I did my formative schooling years at the Leicester Pearson College and Vancouver Island. So something that has shaped me so it's really an honor for me to be here. In response to your question, for the World Bank Group, we have really several corporate goals but I would stress on three. One being eradicating extreme poverty. The second is creating shared prosperity and the overlay on both these is really sustainability. And we see that the World Bank Group can play a big role in terms of promoting all these three. So why is it that we think that the extractive portfolio is important for the World Bank Group as a development institution? Around 3.5 billion people live in oil and resource rich countries. 70% of these are really living in extreme poverty and while the resources account for more than 10 trillion a year and that's a big part of the global GDP. However, we find that in many of the countries which are resource rich, the benefits of those resources haven't really reached the community and haven't really had an impact in terms of taking the entire development of those countries to another level. Just to give you an example, Africa's oil and mineral exports are worth 305 billion dollars, which is almost seven times the development assistance that goes to Africa. So it is really telling for us that if we can develop the extractive industries sustainably, it can really be the factor that changes more than World Bank assistance or any of this aid flows. This is really the industry that can make a difference to the African continent. But we know the stark reality on the ground is that a lot of the countries that are resource rich the Honourable Minister referred to it suffer from poverty, from corruption in many cases, conflict, violence and a lot of this is stemming from weak governance. So one of the big areas that we as the World Bank look to is really having an impact on strengthening institutions, governance and this cannot be done in isolation from the private sector and we see the private sector playing a big role. The EITI initiative, which all of you are very familiar with is one that where the World Bank group has spent a lot of effort and energy to make sure that it's not just that you have countries signing up but that we work side by side with the countries to develop their capabilities and capacities and the new, or rather I should say the improved EITI also looks into the institutional aspects of countries that have signed up. So creating national councils for example that have the way with all and have the right people who can actually make sure that what countries commit to an EITI actually gets implemented on the ground. A second area where to translate this resource wealth to development and I'm very happy to see two of my colleagues from before, Peter Wojke who used to head IFC and Harold Rosen who was the guru of small and medium enterprise development in the IFC and one of the things that we as the World Bank group try to do is really to focus on developing an ecosystem around the large mining operations and oil and gas so also giving importance to creating small enterprises around the large enterprise creating shared infrastructure. This is a new initiative. We have a very interesting initiative that has been done which superimposes spatially the mines in Africa with the power grids in Africa and it's very interesting to see that actually most of the mines are operating with captive power because they are in remote areas and they are using diesel or heavy fuel oil and the initiative that we are trying to propose is to get mining companies to substitute these polluting fuels with cleaner sources of energy and in doing so also to connect the communities that surround these mines and this would be a win-win for them because in our analysis these sources of power are cheaper, cleaner and it can also service the community. Of course again I give a lot of credit to Peter Wojci, because he was one of the people who made sure that we mainstreamed the concept and the concern on sustainability into every single transaction that we do as the World Bank Group and we have our safeguards or environmental and social standards which is something which when we started off several years ago it was seen as an important burden by a lot of the private sector companies but I'm proud to say that today a lot of companies reach out to us to provide support, advice and hand-holding if I may say even very large sophisticated companies who would like to make sure that they follow the environmental and social standards and safeguards. One other initiative that I would like to mention which is bringing resources and development together is our focus on community development so we have also taken a lot of pains to create a group that can work with large mining companies and our own investment officers and I think if I'm not mistaken Daniel you may have been part of, yes where we developed industries and benefits for the community around the mines. The last point I'd like to make is something where I'm really hoping that Canada would step up and be a leader and this is the Global Gas Flaring Reduction Initiative so we as the World Bank Group have said that we would like to have countries and companies sign up to zero routine gas flaring by 2013 and I'm very happy to say that through the activities of the Global Gas Flaring Reduction Team there is a lot of momentum to sign up to this initiative and Canada is one of the countries and Canadian private sector who we are hoping will join this initiative and really give the momentum as the Honourable Minister mentioned as an example of a country that has done things right in the resources sector and we hope that you would do this in a very I would say visible way for many of our other countries to learn from and signing up for the zero routine flaring initiative would be one way to do that. Thank you. Thank you very much. Daniel, thank you for being here. You had a past life at the IMF and working on issues related to petroleum and mining policy and governance and you're now at the Canadian Institute for Extractive Industries and Development where you study this issue from a Canadian perspective or you share this Canadian perspective with others. Canada is seen as a role model in this absolutely along with Norway so what are the challenges and opportunities for developing country partners in the extractive industries and how the Minister talked a little bit about this but talk a little bit more about how Canada engages with companies, provincial governments and others including the Extractive Industries Transparency Initiative. Thank you Daniel and thank you to CSIS for the invitation this morning. I would also like to thank DFADD, especially Minister Paradis and Deputy Minister Brown for their financial support to the institute and their moral support to the institute. It's a bit of a challenge to discuss best practices in like seven minutes or something so I'll give you eight. Give me eight, thank you. You know we start from the belief that there's one sector that can live a country out of poverty. It's really the extractive sector and so that's I guess the starting point where we've been developing a work program and this work program has mainly like three pillars and one is to make sure that countries have adequate frameworks strong institution and good governance principles and these three pillars are really like a tripod so if one of the legs is missing the whole thing is unstable equilibrium so for us it's important to work on the three levels. In the past 10, 15, 20 years like organization like the World Bank I've done quite a bit of work in terms of improving frameworks and you know if you look at countries they are very often let's take Africa, quite modern mining policy or mining regulation, mining law fiscal regime but there's sometime a problem for countries to administer and enforce these frameworks and if there's a gap there's some countries the gap is still at the framework level but in some other cases it's really in the implementation and how countries can administer these frameworks one of the issue for instance in terms of the administration is that if you go to many countries for a given countries for a 20 mining contracts or mining agreement there will probably be more differences among all these contracts than from country to country so it makes it quite difficult for any developing countries to manage their expected sector and it's kind of a fact that is sometimes overlooked that if you look at developed countries most of their terms, whether royalties income tax or regulations when you go to developing countries there's a tendency to negotiate about everything which makes it very very difficult for institution, for government to actually manage the sector because of the complexity arising from these variations so framework what's important to have is a set from mining policy mining regulation fiscal regime licensing system and these needs to be clear transparent fair and predictable and I think the worst element that prevent investment is really the lack of predictability so in our capacity building efforts with developing countries is really to make sure that it's really and at the end of the day and I think minister parody raises the issue it's really a fine balance between making sure to optimize benefits for countries but at the same time keep a system that is attractive for investment and you know I've seen countries that they had very very good mining or oil and gas regime there's really little investment so you really to a certain extent it's almost more than an art than a science to reach that fine balance obviously governance, good governance principle is really the cornerstone of the whole system of the three pillars at the end of the day if you have you know a proper frameworks good institution, strong institution but for instance mining licenses are issued by the president's office without taking into account these frameworks and the institution the whole system collapse so really governance is the framework of the whole system and we believe that at the end of the day I mean work is really to assist government but from a Canadian perspective I think Canadian companies if we succeed to raise the level playing field and Canadian companies will actually do very well because they're used to work in heavily regulated environment with probably one of the most environmental regulation system most stringent regulation laws they're used to deal with communities engagement to so we believe that Canadian companies whether mining all in gas industry if the level playing field is raised for everyone they will actually do very well I don't want to take too much time to leave time for question but I think one of the challenges in trying to introduce these best practices is the fact that and it's the same issue everywhere is country needs to kind of balance their long term vision with the short term benefits and it's already difficult for developed countries to do that so for developing countries with huge needs and health indication and all the other sector there's very often the short term benefits tend to prevail over the long term vision so that's a trend that we need to address very often I would say the second point is that one and I think minister parody mentioned it one size doesn't fit all I mean people discuss for instance Norway as an example for petroleum wealth management but Norway has probably the best governance on the planet and their system is very I would say relaxed in terms of what you should do to try to impose or implement this the same system the same framework in the developing countries in many developing great wouldn't work just because of the governance structure and the last point I think that that it's a mistake that many organizations have made throughout the years is to to come in with like a pre and post structure or plan of assistance and I think you really have to start where the country is some countries are already quite advanced so you have to start where they are some countries are further back or further away so you need to really start from where they are and then develop with them the proper as I said framework institution and governance system I want to just put on notice I'm going to put Michael Leavitt and Peter Royka notice I'm going to call on you at the end of this so just you can thank me for that later but Marty you're at the State Department you're the Deputy Director of Office of Energy Programs and the Bureau of Energy and resources at the State Department obviously the State Department thinks a lot about energy issues so you might share your perspective with us Thanks Dan I'm familiar with the State Department and the Energy Resources Bureau we were formed three years ago this month in an effort to consolidate and elevate the department's engagement on energy issues and to make sure that we were approaching energy holistically through all the different lenses of our foreign policy interests and those include the entire range of our foreign policy interests from national security interests to our economic trade interests development objectives and our human rights and anti-corruption agenda and the Bureau really seeks to look at every angle of of energy through those lenses and what we do but very early on we realized that how other countries manage their natural resources impacts our foreign policy interests in addition to their own development agendas you heard statistics already from Dan and from Anita about the percentage of oil and gas coming out of the developing world and the reliance in the developing world on natural resources for their revenues and for their government budgets the scale of the extractive industries in the developing world dwarfs many many times over the scale of assistance that's going to those regions and the expectation about new investment in the energy and extractive sector over the next 15 years is such that if you want to have as others have said an impact in countries you have to impact how they manage their extractive sector at the same time we know that at least in Africa for example there's some who estimate that they're still losing more through mismanagement of the sector and corruption in that sector than they're receiving in investment and in foreign assistance combined so there is still a need for engagement to make sure that are very practically speaking our aid dollars in our trade and investment dollars are having the impact we want them to have and so we see both the philosophical and the practical reasons to engage in and focus on good governance and transparency and accountability in the extractive industries in terms of how we do that we look at it in three ways really one is as you might expect bilaterally so working in our diplomatic engagement and our diplomatic engagement with countries as they develop their resources to encourage them to do so responsibly and transparently we have foreign assistance programs that work with both governments as well as civil society groups to build capacity in the sector we feel strongly that governments can't effectively develop their natural resources if they don't have a fundamental understanding of the resource of how it's developed, how it's financed and marketed and at least enough knowledge to be able to regulate the companies that are operating there and to take advantage of the revenues that they generate and that it's equally important to empower civil society to serve as the check on government and hold the government accountable in this very complex and complicated sector it's very difficult to hold government accountable if you don't have a very well informed civil society to play that that role so we work in addition to working bilaterally though with individual countries and we can talk about some examples of that it's equally important for us and we prioritize working multilaterally and looking at how we can raise global standards for expectations of transparency and good governance and we do that through institutions like the G7 and the G20 which have been very active space in the last few years and through initiatives like the EITI which others have mentioned and has now really emerged as a global standard for extractive industries transparency with now 46 member countries and perhaps a few more coming soon I think the other thing that we do though that is important to us is thinking about what we do here at home in the United States and how that impacts global energy governance and transparency both because we are an example to others and that's one reason why one of the important reasons why we are implementing the extractive industries transparency initiative here in the United States but also because we recognize that we are the home government of multinational corporations and we play a critical role in global financial economy and so that's the reason why the United States has taken steps like putting in place many years ago very strong foreign corrupt practices act in enforcing the FCPA and really expecting compliance with that and why we were the first to put in place mandatory reporting requirements under Dodd-Frank 1504 and we think it's important to model the kind of good behavior that we want to see in other countries here at home and I can go into greater detail in the Q&A about any of those topics I just wanted to maybe give one example of a country that we've been doing a lot of work in that I think represents kind of all of those action streams next week the government of Burma will host the EITI board in Napida for their quarterly meeting this is a country that has as you all know a very troubled history of extractive industries management but one where the government has made commitments at the highest levels to really reform how they manage the sector and we have been working with them over the last couple of years both bilaterally and multilaterally in that effort we launched last year a country partnership under the auspices of the G8 to focus on extractive transparency and we have a foreign assistance program that targets their ministry of energy and national oil and gas company to really professionalize and modernize how they manage the sector so that they can meet their own reform goals in the country we also have worked with our companies here in the U.S. to make sure that they are modeling when they invest in Burma modeling the kind of good behavior and transparency that we want the government to adopt in that country and so we've adopted in the U.S. a fairly novel set of reporting requirements for our companies when they invest in Burma across all sectors that they have to report on their practices and some of the areas that we're most concerned about whether that's labor practices or grievances or land acquisition or community engagement and I think that's been really helpful in demonstrating the kind of behavior and practices that we want the Burmese to adopt themselves and we want other countries and companies to adopt as well and I think that those efforts it's early yet of course in Burma but I think those efforts have started to pay off we saw them conclude a licensing round in April for offshore oil and gas that was significantly more transparent than we've seen previously and you can see the success of that through the caliber of the companies that bid on the blocks and the received blocks and of course this past July they were admitted to the EITI as a candidate country and have made steady progress since then in implementing and I think we'll get to showcase that so I think it's a good example of the United States as well as other donors and multilateral organizations working together focusing on a particular country and a particular set of issues with a government that's interested in getting that help and with the support of companies and the support of civil society groups on the ground to really start to make a difference so let me stop there Thank you Marty, I was in Oslo the United States had become a signatory of the EITI standards had opened the door to a number of developing countries wanting to join EITI because the United States had taken the plunge if you will so I think that's particularly interesting Joanna, thanks for being here Thanks for having me, hello everybody it's really good to be here today and to have a chance to talk with you all I think I would like to compliment the Canadian government because we have such a deep partnership between the US and Canada on so many levels and it almost never gets recognized you know your commitments dear to my heart on food security and other things have just been wonderful and so I'm glad we have a chance today it's been fascinating to have this conversation because I feel like there's a lot of joint learning going on Chevron actually operates in Canada and has for almost 80 years one of our senior women leaders is Canadian so we also have a close connection to the country I think this is a really fascinating time in global development because there is enormous innovation underway there's a lot of innovation in the US and how we're thinking about things I think the Canadian and Australian governments are taking on some really new approaches that are especially interesting to me because I think that while there's money attached, there's funding attached what's really innovative is that everyone's collectively saying how do we actually really promote development, how do we promote investment how do we promote jobs and how do we use our skills, our knowledge, our technology our know-how how do we use that to promote development and I think the conversation today has reflected a lot of really good ideas and I think in the next 3, 4, 5 years we'll be able to look back at this as a really revolutionary time so I'm here, I'm the only private sector person on this panel so I'm not going to talk really broadly to some of the things that have been mentioned but I just want to talk a little bit about some of the best practices in the extractive sector and I will say this is a massive, vast area of study and learning you could spend your entire professional life just focusing on best practices about one particular piece so I'm going to do a very high level overview of what Chevron does in terms of best practices in the US and internationally and these are generally industry standards we spend a lot of time in industry working groups sort of trying to develop best practices and figure out what's going to work the best and how do we want to adhere to these processes so for Chevron about 25% of our activities in the US the rest is international Australia is a big footprint but so is Bangladesh and Myanmar so we have a lot of activities in a lot of different places and I think one of the most important starting points is just to say that everybody's treated the same follow the same practices, the same standards and that's I think the initial starting point around best practices that I think you think of some sectors and that they may go off shore for cheap jobs, maybe they don't use the same labor standards, we have to be across the board safe and healthy and I think that that is a very important starting point so I'm going to talk a little bit about CSR and revenue transparency because you all want to know about that but I want to highlight two other best practices that I think are actually even more important so the first set of best practices I think is around just basic business operational principles. So one is workforce development Chevron has worked very hard to localize our workforces wherever we operate in Angola, in Kazakhstan we've got 85% local workforce. That is a serious commitment to growing people teaching, training and promoting people in the places where we operate and I think those jobs and the impacts that we have in the broader community are very important. A second area that no one really talks about because it's kind of boring but I always like to mention is just basic business practices, management practices, operational practices your finance and accounting and auditing processes all those really boring technical business processes I think have a really strong impact because the way American companies do business is very strong and I think it is important in terms of global best practice. And then supply chain development is another part of our business and operations that can have a great impact just to give you some numbers we talk a lot about CSR spending of course but in Angola as one example, Chevron will spend about $19 million a year on sort of social responsibility and social investment but our supply chain spend is over $2 billion in local goods and services and Michael can talk about this when he makes a comment but the efforts to train Angolan businesses to qualify and compete to a global standard to win business from Chevron and Exxon and other companies in the country that has qualified companies in a really serious way to be competitive and grow their businesses and that has really economic impact. A second area that I can't overstate is best practices around health environment and safety these are just extremely important in the industry we just cannot afford to have environmental challenges to have safety problems so everybody is trained on ways to operate, trained on safety we focus a lot on safety and safety for every single person and every single operation is treated as a major principle in how we do business it takes a lot of time to implement a safety culture it's expensive. I sit in the Washington office where I don't feel any great danger but I still have to follow the same safety principles as everybody else so it means that there's a commitment that every single person has to follow it one of the interesting examples of how this sort of fits in a development scheme is that in Bangladesh when Chevron started operating a lot of the local employees or a lot of the local folks who were employed they're smallholder farmers and we spend a lot of time in a smallholder culture you can imagine protective clothing for smallholder farmers is maybe a pair of flip-flops and a hat to keep the sun off your head so there's a bit of shock to the system when the safety folks from Chevron showed up and said here are your safety goggles here are your hard hats here are your protective steel-toed shoes and you have to wear them at all times it took a big shift it was a cultural shift but eventually everyone was very committed and I think the number that you can watch is very closely how many hours or how many days have you gone without a day off due to injury in that in our activities in Bangladesh it's been 60 million work hours since there was a day off due to injury and that is no major incident since February of 2008 we do an environmental impact we do a safety impact we do a social impact assessment for every major capital project we look at all of the potential impacts Australia is not a developing country but in our investments there and our capital projects there major major major investments in terms of environmental mitigation to ensure that we weren't damaging any of the sensitive areas where we operated so it had to make a serious commitment to do this because if we don't it's really a problem if there's an accident you know we just financially it's problematic and just from a social perspective and impact perspective it's so damaging that we have to be very careful social investment which is what we call CSR that is also it's one of the pillars as I said environmental, social and health impact assessments so it is just integrated in every operation in every country where we operate what are the social impacts how do you do social investments that will promote the growth of jobs outside of the industry or in the communities where you operate we do a lot of sort of joint design of programs where Chevron folks and community people will have a multi stakeholder group sit down and say okay what's really needed in this community or in this country is it a vocational training process is it we do actually a lot on agricultural development because a lot of the communities where we operate tend to be populated by smallholder farmers so if we can employ we certainly can employ everyone in the community in our operations but how do we develop opportunities for people in the community to grow and to sort of create some economic development and growth around the operation so agriculture ends up being an area where we actually spend quite a bit of time and I just I'm racing through this all of this is online on our websites you can find what we do in every single country so I'm sorry to give everything such short shrift I want to end talking about EITI because everybody has touched on that did you say we've taken the plunge in the US because I'm all wet from the plunge so EITI the Extractive Industries Transparency Initiative is I mean it is I think the global standard for revenue transparency it's a process that we have committed to very seriously at Chevron we've had a member on the global board since the very beginning we're involved in many of the local country multi stakeholder groups I'm the member of the US board here for Chevron and it is a it's a it there's a deep deep deep set of work and frameworks that have been developed for EITI and I think it's it's important to acknowledge that and to recognize how much work has gone into that because it is no joke it is a very serious process and I think from my perspective there are two there are a number of good things about it but one is that you do get the government you get the companies and you get civil society all together and that you know just that level of engagement is important in terms of what comes out and the data that comes out in the final products which is always a report with data and information but I also think that the process in many places is as important as the product and Burma is a really good example because this is going to be the first time that you're going to have civil society and government leaders and industry of course but especially civil society and government they're going to have to sit down they're going to have to work together to come up with a product in a couple of years and they're going to have to figure out how to make it work and I think that that process of sort of building the muscles of cooperation is one of the things we don't talk about quite as much but it's very very important about EITI so that's a real priority for us and I want to introduce Veronica Kohler is here who's one of the co-chairs of the US EITI process and Dan you may want to put her on notice because she might want to say something as well so she can talk a lot about she's committed thousands of hours to this process one thing I will say just to sort of with my development hat on being a part of the US EITI process has been a little bit I think of a taste of our own medicine because I think about all of the processes that we ask developing countries to go through I think about a country like Tanzania where you've got PEPFAR and MCC and Feed the Future I think Power Africa and we're just pouring processes on countries and as we try to implement EITI in the US it is a very big time commitment it is a very serious effort and you know I look around I think man what if we had all of these other processes that we had to do it would really be a strain so I think it's kind of taught me a lesson about what we expect countries to do and report and how we expect them to operate and just sort of help me to kind of have a little bit more perspective on it that I think is something that I just wanted to raise with all of you in terms of considering your grant and aid packages so in closing I'll just again I raced through all this but I did want to highlight some of the best practices there is an enormous set I'd you know suggest you look at sort of IPICA does a lot of best practices all of the companies and industry associations are looking at this I think everyone's very committed to it and really enjoy the chance to have this conversation and I'm looking forward to learning more about what the Canadian government is doing on this front as well thank you Dan first you missed Alaska which has a regime to recognize that the people of Alaska own the oil they get a check every year it changes the perception nobody views their oil like Alaskans view their oil you may disagree with some of the decisions but it's also an American model that no other state is replicated by the way let me be difficult because everybody was so happy if extraction were so great everyone in the world would be very rich today and they aren't I'm not saying there isn't a lot of change because there is a lot of change but the state of mind of people around the world is that these extraction companies and I've worked for Canadian mining company and American oil companies is they all got along pretty well we complain about lack of transparency and corruption they all stayed none of them left and they all made a lot of money there now everybody's finding God for good reasons and I'm totally supportive and I've made money helping them and hope to continue doing it but it's silly to pretend that the base isn't pretty awful in a lot of places there's another for the stool which is alternative economies one of the big problems in the countries is if the only real income is oil and gas or mining no matter how wonderful the company is that industry is going to have too much power in decision making it's just going to be and then the last point I would make is that particularly with oil and gas the name companies and I've enjoyed working for Chevron the name companies don't do very much they contract for 95% of the work that's done in oil and gas the other companies do it and in many companies those companies are not held to the same standard that the big extraction companies hold themselves to and so I think that's a major thing that has to be recognized in the the last I hope the last point is that it's getting harder and harder because the technology for hiring and training and the work is that it's harder and harder so if it's off off shore oil and gas you aren't going to have any local hiring I mean you got to be a PhD to turn the boat on so these things all make it more complicated more difficult it's all in the right direction but I also think it's important to recognize the difficulties and the starting points in a lot of this and I'm sorry let me just say one more thing this the combination of official development assistance is going way down and foreign direct investment is going way up in the same sentence would imply that foreign direct investment has the same kind of impact on people that ODA has now that may not be the intention but when you link those two thoughts that's what happens and if that were true then we wouldn't have this great disparity in income and obviously you have to totally believe in trickle down economics to think that that would be true tell us where you sit day job hello I'm Veronica Kohler I'm director of international policy for the U.S. national mining association and right now I suppose I'm being called on to talk about U.S. EITI I'm the chair for the industry sector on the multi stakeholder group and as you heard from several of the panel members the United States is trying to be a candidate well we are a candidate country now our candidacy application was approved in December of last year and we are working diligently to get a report out and create something that is meaningful here in the United States I think Daniel is something that you said resonated well with me it's looking at the short term benefits versus the long term goal and in this age that everyone's focusing on transparency it's important for countries to do what is going to be meaningful for that country and for the people in that country before national mining association I worked with the World Bank and so my heart has been in creating or working in extractive industries that have a positive impact on communities and for the country and long term positive benefits for those countries and we can do that in many ways and we're seeing a trend now that countries are signing on to EITI or implementing their own mandatory reporting requirements and I think we always have to think about the actual impact that's going to have on the ground and the realities of that can be sustained both by the business and the information that communities will be receiving to make sure it moves forward in a fashion that actually will allow the communities to reap the benefits of living and working in resource rich countries thank you Peter Voike you've had a couple lives you've been at IFC you used to, you sit on the Saudi Aramco board so you've been involved with sustainability but you've also been involved with the oil sector and gas sector and you've been in the mining sector well first of all I think it's very interesting that the extractive industries is now accepted as an industry which can benefit countries I mean 14 years ago we were on the heavy attack at the IFC that we should not be in the extractive industries at all I think to criticise anybody on the panel I think we have to get away that the private sector are do-gooders private sector is very fast adapting to new risks and I found it fascinating that as soon as companies get away from CSR spending money on local communities, on the environment for social reasons to seeing that as real risks that they did a much better job I think that if companies recognise that social and environmental risks are as big or sometimes bigger than technical risks or financial risks or market risks I think we have something going for the extractive industries now the problem is that these risks are only recognised in those countries where you have a strong civil society I would argue today that the mining companies in Brazil in Peru are taking these risks very seriously before they make an investment they calculate how much money do we have to spend not only to the banks not only for marketing etc etc but how much money do we have to spend that we don't run a social or a community risk the problem is in those countries where civil society isn't strong the companies still don't pay much attention to that and I think the only way to do this for the World Bank and for these institutions increase capacity we constantly talk about capacity capacity increase was very good what I heard from the minister Canada I think in Tanzania and Mozambique today it's great what is being done they have huge gas reserves but if you talk to the government they don't understand what they have and what they're sitting on how they should approach it so where are these institutions to teach these companies these governments to do the right job I think more emphasis has to be done there and finance civil society because they're very beneficial let's just get a reaction to these set of comments and I'll open up for another round of hands why don't I start with you Anita so definitely that for the private sector the bottom line matters however I think Peter the point you just made of businesses starting to realize that this is a real risk for operations has been in some sense the motivating factor and as I mentioned I've seen just in the 10 years that I've been associated with this industry that the attitudes from companies have changed primarily because they know that it can have it's a risk that can have an impact on the bottom line the second point I'd like to make is on governments and capacity and also the point that Michael you made on ODA and the benefit of extractive industries yes the conditions on the ground are terrible but I also have to say in different countries I've just come from a meeting with the government of Mauritania they are very very clear what the natural resources mean for them what they don't have is really the type of sophisticated bureaucrats technocrats who can not just take decisions at the top level but actually filter it down to the implementation level and that's where a group like the World Bank can really play and we have been working on with governments on actually strengthening their ability to negotiate contracts so giving them the kind of support that they need to be an equal partner vis-a-vis the private sector but why I still think that this sector has a lot to offer to the developing countries is because ODA also depends on implementation capacity and the difference here is that this is creating jobs it can create if manage well small enterprises, local entrepreneurs so the promise or the potential that the extractive has in my view can far outweigh even ODA so I would still say if done right this in the long term can be a better solution for countries the third point is in terms of the subcontracting and this is something that we have addressed in our standards where we are pushing back on companies who we are financing to come back to us and say that this is not my problem it's either the government who is responsible for this or that it is subcontractors and we are making sure that we go the entire value chain and make sure that the implementation goes beyond just the large companies that's okay yes a few point I'm happy that someone raised that there is a lot of issues also because we would be out of work already there were not a lot of things to sort out I think still today although as I said before there's been a lot of assistance provided to government there's still an asymmetry of expertise and information between the companies and government officials and to go back to the point that was said earlier sometimes in the way Tanzania for instance you realize that the NGOs actually played a very strong role in terms of making sure companies were protecting the environment dealing with local communities and actually pay their royalties and taxes to the government so the role that should have been played by the government in the first place was played by NGOs which led to quite a bit of changes in the way Tanzania was dealing I also agree with the fact that mining companies oil and gas companies realize that part of their due diligence before getting into a project is to make sure they will get a social license to operate and when they go through all their permitting this has become one of the key matter because they realize that without this although they have one of the best project in the world if they don't get the social license they will run out in all sorts of difficulties so I think these are few other points but I think that's it thanks I would agree with what Daniel just said I would say it's absolutely true that it's not a very rosy picture everywhere in the world and I think on the one hand you have a group of countries particularly in Africa sort of the next generation of big extractives producers that have looked around and seen what's happened in other countries and seen it as a cautionary tale and sort of want to avoid some of those mistakes and want to do the right thing and are by and large sort of democratic and accountable governments and there's a particular set of issues that you have to deal with in those countries and a big part of that is capacity building but I think it goes beyond that too from those types of governments no matter how much capacity building you do and how much training for us and knowledge transfer you do at the end of the day we're still sitting down across the table from a very large team of experts from an oil company or a mining company that have been doing this for 30 years and there's 20 of them and there's still 5 of us and there's still the perception of a disparity even with all the technical assistance and capacity building you can do and that's something that in part that particular issue is something actually the G7 agreed to take up this year to think about sort of creatively how we can help level that perception of imbalance even at the early stages of contract negotiation so there's a set of issues for those countries but then of course there are a set of countries where we haven't seen frankly the kind of political will that we need to see to change how they manage their extractive sector and those require different responses and it's more difficult and part of that is what we're able to do as a U.S. government or as a Canadian government ourselves to bring more transparency so things like Dodd-Frank 1504 that we have under our control to impact that sector and part of it is using that kind of information and other tools to empower civil society as Paul said to try and increase the accountability of those governments and those same tools also increase the accountability of the companies but those are certainly the harder cases and we see a lot of those and I don't think there's one approach that you can take to the challenges in all of these developing countries the other thing I'll just say briefly on the subject of U.S. EITI there are folks here that can talk extensively about the domestic benefits of EITI and how fruitful that process has been and both Johanna and Veronica have put in as they said thousands of hours into this process and it's been fascinating to watch and I will just echo Dan's comment earlier the feedback that we've gotten internationally from that not even so much from the developing world which has always sort of seen EITI as always sort of seen them as the target but from the kind of middle income countries that don't look to the developing world and look to the United States or Europe or the OECD as a model and they want to follow that example a developing country in Africa so countries like Colombia or Mexico that are more likely to join an organization or follow a standard that the U.S. or Canada is implementing versus an African standard and that's where we've really started to see the impact on EITIs in those kind of middle income countries and I think for me that's really exciting. Okay Johanna Yeah I was interested in meeting with some folks from an East Asian country who said our leaders will just say we're not corrupt we don't need this but I think with the U.S. and Australia and the U.K. are doing it it makes it sound a lot different. I mean I don't even know where to begin Michael you alone laid about 35 questions on the table. I think I will maybe start with capacity building because it is sort of the holy grail of development I mean in my view all roads lead to capacity building education learning and training but the reality is this takes a really long time especially around really technical fields like learning exchanges that people you know do like TDA missions or things like that to have exposure to different systems I think that is very very important but it really will take a long time this particular sector is very very technical but every sector has a large degree of technicality that just is going to take time I spent time looking at biotechnology regulation in a number of countries and people said yeah capacity building is the answer it takes people in the whole country who are actually working on it people can only learn so fast so I do think it is important but I also think it is going to take time Michael I do want to say one thing about your comment about declining declining ODA I always like to clear this up development assistance has just ramped up dramatically in the past 10 or 15 years there has been a big increase in spending and I know that there is fear that it is going to level off and people are starting to decline but the fact is that financial flows are just increasing overall and so I think it is really important to balance that out in terms of alternative economies that is really at the heart of what Chevron is trying to do in a number of places as I said we can't employ everybody so how do you use your social investment your development spending to try to help communities identify value chains that people can have alternative livelihoods that is a very important part of what we are doing we are still in early stages in some places but I think that that is a real priority and then I had one other comment and I can't remember what it was because there were so many questions on the table but you know it is not a perfect picture there is a long way to go but everything is going to take time and I think the more we stick it out and keep talking about it with doing training and discussions the better I am cognizant of the time we have an event at 3 o'clock I want to thank our panelists for being here and especially Anita George who as I said has a very busy week with the World Bank annual meetings so please join me in thanking the panelists