4.5.4.2 Equity and shared responsibility

Economies with a high dependence on oil exports tend to have a poorer economic performance (Leite and Weidmann, 1999). The local energy needs of the host countries may be overlooked by their governments in the quest for foreign earnings from energy exports. Inadequate returns to the energy resource-rich communities have resulted in organized resistance against oil-extraction companies. Insecurities associated with oil supplies also result in high military expenditure as shown by OPEC countries (Karl and Gary, 2004).

The advent of reform in the energy sector increases inequalities. Notably electricity tariffs have generally shifted upwards after commencement of reforms (Wamukonya, 2003; Dubash, 2003) making electricity even more inaccessible to the lower-income earners. There are many genuine efforts to address such issues (World Bank, 2005), although much still needs to be done (Lort-Phillips and Herringshaw, 2006). Companies whose origin countries have stringent mandatory disclosure requirements are reported to perform best on transparency. Public private partnerships in developing countries are starting to make inroads into the issue of inequity and to harmonize practices between the developed and developing world. One such example is the Global Gas Flaring Reduction Partnership (World Bank, 2004a) aimed at reducing wasteful flaring and conserving the hydrocarbon resources for utilization by the host country.