Examining Stakeholders' Participation in the Implementation of Local Content in the Context of the East African Crude Oil Pipeline (EACOP) Project in Tanzania

Abstract

In recent years, Tanzania has seen a wave of investment in its extractive sector since the country discovered important reserves of natural gas. Simultaneously, domestic stakeholders raised their concerns regarding the distribution of benefits from the mining sector in the national economy, which fuelled debates over a possible local content policy (LCP) for the hydrocarbon sector. As such, most of the national policies on natural resources that have been adopted within the last decade incorporate features of the global political trend of resource nationalism discourse. Following the discovery of offshore natural gas resources, the Tanzanian government undertook the process of drafting a LCP that would secure jobs for national citizens in the hydrocarbon. This process led to the adoption of the LCP as a background document of the most recent Petroleum Act adopted in 2015.

This research project focuses on one central question: how do stakeholders of the East African Crude Oil Pipeline project understand their position and shape the implementation of the local content policy? Through a thorough power analysis of each stakeholder's position, this study found that institutional challenges hinder the implementation of the local content policy, which is in part due to a lack of proper consultation with all stakeholders of the sector, the competing interests of the main actors, and the ambiguous ownership of the policy itself. Moreover, this research found that the current design of the local content policy will benefit political, business and local elites rather than local communities and Tanzanian citizens. Lastly, this research shed light on the emerging relationship between IOCs and CSOs in the context of EACOP, which suggests that both sets of actors are developing strategies to compensate for the deficiencies of the Tanzanian government in administering the local content policy.