Community Development Agreements as Tools for Local Participation in Natural Resource Projects in Africa

Abstract

This chapter examines the nature, scope and contents of Community Development Agreements (CDAs) in Africa’s extractive industries. It assesses the degree to which CDAs enable host communities to participate in project implementation and resource revenue-sharing. Although the chapter notes that CDAs are potential instruments for local participation in resource projects, it identifies certain factors inhibiting the utility of CDAs in Africa including the power imbalance between extractive companies and host communities. While extractive companies have enormous financial resources that allow them to retain the services of highly trained experts including lawyers, local communities in Africa are predominantly poor and lacking the requisite capacity and expertise to negotiate and implement CDAs. The financial power of extractive companies allows these companies to exert a considerable degree of leverage over host communities in Africa. The result is that, in some cases, the terms of CDAs in Africa are dictated by extractive companies. Given this reality, the chapter suggests that African countries should enact legislative provisions mandating and dictating the contents of CDAs in the extractive sector. Such legislative provisions could ameliorate the power imbalance and ensure that extractive companies do not take unnecessary advantage of their superior power in the course of negotiating CDAs with host communities in Africa.