Natural resource governance: Norway and India among top 10

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Heidrun oil platform. Photo: Øyvind Hagen/Statoil.

Four-fifths of the world’s major mining, oil and gas-producing nations fail to productively manage their natural resources due to inadequate corruption and transparency standards. This have negative impacts on the environment and the prosperity of the citizens. A new report brings focus to the role of resource governance, and how to utilize the potential found in natural resources.

The 2017 Resource Governance Index (RGI) is conducted by Natural Resource Governance Institute (NRGI) and is the only international index dedicated to resource governance. The index measures the quality of countries’ management of natural resource extraction and wealth in 81 countries. Launched in 2013, the index aims to help commodity-rich nations avoid the pitfalls of the "resource curse", in which their economies grow slowly due to poor institutional management and oversight of their natural resources.

"Good governance of extractive industries is a fundamental step out of poverty for the 1.8 billion poor citizens living in the 81 countries we assessed," NRGI chief Daniel Kaufmann said.

The report also emphasize that problems with natural resource management and regulation touch both poor and wealthy nations.

According to the Resource Governance Index, Norway place first with Chile, Britain, Canada and the United States ranked just behind. Norway’s oil and gas sector scores 86 of 100 points due to exceptionally strong legal requirements to manage environmental impacts and effectively enforcing them. This is combined with Norway’s $960 billion sovereign wealth fund, which uses oil and gas profits to fund green energy ventures and social services for its citizens. Some suggest that Norway has avoided the resource curse because, unlike other petroleum-rich states, it benefited from not having discovered petroleum until much after it had already built a stable, wealthy and equitable economy with strong institutions and high standards of living.

The same index show that India’s oil and gas sector ranks 9th, with the score 70 of 100 points. This makes India the second-best performer in resource governance in the Asia-Pacific region, trailing only Australia.

Click here to read more about the findings on Norway and India's resource governance.