Ryerson CSR Institute Session: Transparency in Extractive Industry Procurement - High Stakes & New Initiatives to Improve Governance -- in conversation with Two NGO Innovators

Transparency concerning expenditures allows for more attention to be directed to the question of who gets what, for what purpose, and the accountability for same. As a result, transparency can play a significant role in good governance, for the benefit of communities, society as a whole, and the environment. While the transparency in payments and prudent use of taxes/royalties paid by extractives recently has attracted considerable attention, a less visible but also significant set of expenditures in host countries goes to goods and services, estimated to be close to trillion dollars a year on suppliers, according to Natural Resource Governance Institute (NRGI) research. A typical large-scale mine site for example will spend hundreds of millions of dollars each year on procurement - usually more than in-country payments of taxes, royalties, wages and salaries combined. This spending is a huge potential lever for economic and social development in host countries, but also a risk for corruption and other problematic practices.

The NRGI's Robert Pitman will discuss how impactful this spending is, and why there should be more transparency and oversight of the procurement process and its constituent parts. In response to this need for increased transparency and better oversight of procurement and suppliers, several initiatives have been developed. One of them is the Mining Local Procurement Reporting Mechanism (LPRM). In addition, multiple countries in the Extractive Industries Transparency Initiative (EITI) are now collecting information on procurement spending, with Senegal providing an exciting example in particular. Jeff Geipel from the Mining Shared Value initiative of Engineers Without Borders - that created the LPRM with the German development agency GIZ - will talk about increasing company use of the LPRM, as well as how a large number of actors are starting to ask extractive industry companies about their procurement practices and results, including ESG ratings agencies. Moderating the session will be Dr. Kernaghan Webb, Director of the Ryerson CSR Institute. The talk is co-sponsored by the Ryerson Corporate Social Responsibility Student Association, the Ryerson Commerce and Government Association, and the Ryerson Law and Business Student Association. Support for the "In conversation" sessions from the Trade Commissioner Service of Global Affairs Canada is also gratefully acknowledged.