GUIDANCE FOR GOVERNMENTS: LOCAL CONTENT POLICIES

The guidance outlines a four-step process for creating local content policies: aligning with national objectives, taking stock of domestic capabilities, crafting specific policy instruments, and establishing monitoring and enforcement mechanisms. It details five types of local content objectives: local procurement, direct employment, horizontal linkages for diversification, downstream beneficiation, and the fostering of national mining firms. The document warns that policies must be context-specific and cautions against 'one-size-fits-all' solutions, noting that automation and international trade laws (such as WTO rules) present significant challenges to traditional local content strategies.

• Local content policies are highly context-specific, and the history of their application contains more cautionary tales than best practices, meaning governments must invest heavily in tailored designs rather than using templates.
• The guidance proposes a four-step implementation process: first, ensuring fit with national development objectives; second, taking stock of political, socioeconomic, and geological contexts; third, crafting the policies; and fourth, establishing monitoring, review, and enforcement.
• Local procurement policies can increase national GDP more than taxes and royalties, but their success depends on how 'local' is defined—whether by geography, value addition, or ownership.
• Local employment policies are divided into regulatory 'stick'-based approaches (such as mandated percentages and visa restrictions) and facilitative 'carrot'-based approaches (such as fiscal incentives and contract preferences).
• Downstream linkages, or beneficiation, aim for diversification within the mining sector but are difficult to achieve; success depends on competitive advantages, infrastructure, and inexpensive energy, with only a few successful state-led examples.
• Technological evolution, specifically automation, threatens the effectiveness of local content policies by reducing employment per unit of value and decreasing spending on domestic procurement for employee-linked services like housing and food.
• Local content policies may conflict with international trade and investment law, particularly WTO rules that prohibit performance requirements or advantages conditioned on the use of local content.

APA

International Institute for Sustainable Development (2018). GUIDANCE FOR GOVERNMENTS: LOCAL CONTENT POLICIES. https://www.iisd.org/system/files/publications/igf-local-content-executive-summary-en.pdf

Chicago

International Institute for Sustainable Development. GUIDANCE FOR GOVERNMENTS: LOCAL CONTENT POLICIES. 2018. https://www.iisd.org/system/files/publications/igf-local-content-executive-summary-en.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=GUIDANCE FOR GOVERNMENTS: LOCAL CONTENT POLICIES |date=2018 |url=https://www.iisd.org/system/files/publications/igf-local-content-executive-summary-en.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopment2018guidance, author = {{International Institute for Sustainable Development}}, title = {{GUIDANCE FOR GOVERNMENTS: LOCAL CONTENT POLICIES}}, institution = {International Institute for Sustainable Development}, year = {2018}, url = {https://www.iisd.org/system/files/publications/igf-local-content-executive-summary-en.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }