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Turning extractive resource revenues into services and infrastructure

Kicking off our mid-term BHP Foundation project evaluation

Extractive resources can be an important source of revenue to fund effective services and infrastructure – with a huge potential to transform lives through the delivery of public goods and services, and supporting business growth and job creation. But the benefits of natural resource wealth are often hindered by vulnerabilities at the point at which revenues and taxes from natural resources are spent on contracts with private companies to procure goods and services. Inefficiencies, poor management and corruption risks make this stage one of the weakest links in the natural resource value chain

The OCP’s five-year project, funded by the BHP Foundation’s Global Signature Program on Natural Resource Governance, is designed to transform the public contracting process in resource-rich countries, strengthen good governance in the natural resource value chain, and convert the income into goods, services, and infrastructure for citizens.

Mid-way through this project, we want to know how we are doing and apply those lessons in the next phase. That’s why we’re working with Oxford Insights (OI) as an independent voice to assess our progress and impact against our internal performance indicators, and identify key factors in successful — or less successful — implementation in our project countries. 

OI’s findings will help ensure project design is tailored to the context of our focus countries, deepen knowledge of which country stakeholders to engage, and indicate how we can better collaborate with our partners. Read more about OI’s methodology below as we share some of the project’s directions of use, progress and impact.

OI are at the beginning of their evaluation. In early conversations with the OCP’s country managers, they identified three major themes that will be explored further with in-country partners during the mid-term evaluation. 

Theme 1: Shift from disclosure to disclosure and use

OCP’s 2019-2023 strategy shifted from encouraging governments to disclose contracting data to emphasizing how and who uses it. Data must contribute to ‘transformational change’ within government and support improved procurement and public services, increased competition, and more efficient spending. The media and civil society should be encouraged to use data to help keep the government accountable. 

This strategy has had a real impact. It has driven a focus on the use of data; not just its publication. Partner organizations indicate they support this shift in focus.

The challenge has been to develop a nuanced understanding of how best to pursue arguments for open contracting, what pain points users are feeling and what the OCP’s role is in solving these issues. This raises a key question of OI’s evaluation: Working with and through partners, how can the OCP embed the regular and sustained use of open contracting data in, for example, journalists’ investigations, civil society campaigns, procurement agencies, and even line ministries?

Theme 2: Working with media to use open contracting data 

Journalists are using open contracting data, whether structured in the Open Contracting Data Standard (OCDS) or as open data, to raise public awareness and hold governments to account. The OCP collaborates with journalists to help them understand how this data can be used and demonstrates its efficacy in tracking government programs and spending. In the UK, the OCP taught journalists to examine public contracts by employing data analysis. In Afghanistan, they learnt media relations activities should frame open contracting as an issue relating to democracy, corruption, and transparency, rather than as a problem of data collection and procurement processes. Understanding the most fruitful approach may lead the way for other organizations pressuring governments to change their behaviors. 

While investigative journalists may have the time to perform time-intensive data analysis, a reporter under pressure from an editor to turn around a story in seven hours does not. We need to explore what role OCP and partner organizations might play to bridge this gap. 

Theme 3: Political changes creating pain points for reform 

Like elections, political changes have had a huge impact on the momentum and ultimate success of the OCP’s work. A perennial problem for open organizations and reformers, this project will be an opportunity for fresh reflections on how to make reforms irreversible

Cultivating champions of reform is important in the work with government. Without these, change can ‘hit a wall’ and champions within the civil service and political sphere leave government. Open contracting policies may then be viewed with suspicion by incoming authorities, especially in polarized political environments. 

While these issues are out of the OCP’s control, as well as that of country partners, there are opportunities to mitigate the disruption. They include developing networks of champions across government rather than focusing on single powerful reformers; ensuring good relationships with local CSOs, so the OCP can quickly switch roles from trusted government advisors to effective activists; and identifying a play-by-play approach to engaging with and educating incoming officials about the benefits of open contracting. For the latter, having a bank of persuasive use cases will be crucial.   

This issue needs further exploration and specific recommendations, which OI will develop throughout this evaluation. 

Next steps and methodology

For the evaluation of the BHP Foundation project, OI prioritized qualitative methods for two reasons. 

Firstly, at the project’s midpoint we do not yet expect to see fully matured quantifiable impacts across the range of project countries including Afghanistan, Argentina, Australia, Chile, Colombia, Honduras, Mexico, Nigeria, and the United Kingdom, like increased businesses bidding per tender, or fewer discrepancies between estimated contract price and the final costs. Although we do believe we will start to see some evidence as we continue our interviews, we don’t expect these to be fully formed and traceable until the end of the project. 

Secondly, we intend to go beyond seeking to validate the OCP’s own internal key performance indicators for activities, like the number of government agencies publishing contracting data that accords to OCDS. Qualitative research gives room to be surprised by findings – to identify unexpected themes and directions; to develop and test emerging ideas with participants; to draw out the richness that comes from reflections shaped by individuals with different experiences. Qualitative findings reveal how the OCP can address future pain points. Understanding what changes are occurring where open contracting practices operate helps develop a structure for the future of the project that leads to tangible, productive results. 

COVID-19 has of course had an impact on the evaluation itself, as well as country-level programming. Importantly, rather than in-person interview and focus groups the situation now forces us to conduct predominantly online interviews.

OI will survey key stakeholders to explore how OCP’s interventions are working and what may be done to foster a sustainable open contracting ecosystem. Anonymous surveys also enable participants to discuss sensitive topics and provide valuable insights openly.  

From the long list of countries under this project, we identified those at different stages of development in open contracting. These included countries starting out on open contracting with strong political support where we asked: what can we learn from the experience? In other cases, we chose nations that had introduced open contracting but where political obstacles had arisen. Here we asked how the challenge arose and how the OCP might work to overcome such obstacles. 

We also are examining different levels of development in the four components of open contracting: set reform goals and secure buy-in; publish, use, improve open contracting data; improve stakeholder engagement and oversight to achieve goals; measure, adapt, and institutionalize reforms. 

Finally, OI will look at where the OCP has invested most time and therefore may be most likely to see results.  

OI’s interviews with OCP staff and in-country partners are providing essential intelligence about each nation, throwing critical light on initial hypotheses and themes. As a result, we are also developing ecosystem maps as a guide to how government, journalists, CSOs, and citizens impact the open contracting ecosystem. 

We’ll be sharing more about the findings and recurring themes throughout this process. Stay tuned and get in touch if you’d like to share your thoughts as well.