Carnegie Moscow Centre Conference: Carnegie Moscow Centre Conference 'International Financial Transparency Regimes' 20 February 2007 Henry Parham International Coordinator Publish What You Pay


A global concern…: A global concern… Around 60 countries around the world receive a significant proportion of annual income and export earnings from oil, gas and mining industries Many of which are characterized by higher levels of corruption, conflict and poverty ('paradox of plenty') Payments by companies and earnings by governments remain hidden Without transparency, no accountability


…requiring global (and local) solutions: …requiring global (and local) solutions Extractive Industries Transparency Initiative Disclosure rules for companies listed on financial markets International Accounting Standards International Financial Institutions


Shared global objectives: Shared global objectives Revenues from natural resources should serve as a source of economic growth and development All stakeholder groups should benefit and have an important role to play in promoting transparency Initiatives such as EITI – at both the international and national level – build trust between parties who would perhaps not normally collaborate


Shared global benefits: Shared global benefits Essential to provide basis for citizens to hold government accountable Curb corruption Improves company reputation Benefits long-term commercial prospects Enhance investment climate for host-countries Global energy security – more stable trading partners Millennium Development Goals


Global civil society’s perspective: Global civil society’s perspective Access to information Improved understanding of benefits accruing to the state from important economic sector Enhance accountability of companies and governments to citizens Monitoring of expenditures and budgets Promote open debate about effective use of resources and public finances to promote development and economic growth


Civil society coalition: Civil society coalition 'Publish What You Pay' international coalition founded in 2002 by Global Witness, Transparency International, Oxfam, Open Society Institute among others 300 civil society members from over 50 countries Promotes formation of national civil society coalitions to work towards greater resource revenue transparency National coalitions are autonomous and independent but have a shared global agenda and objectives


Civil society coalition: Civil society coalition Angola Chad Cameroon Congo Brazzaville DR Congo Gabon Ghana Liberia Mauritania Nigeria Sierra Leone Niger Guinea


PWYP as a global partnership: PWYP as a global partnership International information exchange Capacity building and training programmes Joint research/advocacy projects amongst member agencies: monitoring of EITI monitoring of IFI policies Regional exchanges between civil society platforms Central Asia and the Caucuses South-East Asia Latin America Sub-Saharan Africa


Civil society objectives: Civil society objectives PWYP promotes global mechanisms to ensure that oil, gas and mining companies publish what they pay for every country of operation, and that governments adhere to best international practice PWYP promotes local mechanisms (national legislation, EITI implementation) in resource-rich countries so that Local citizens are involved in reforms Changes are made within the local context Information disclosure promotes national debate on revenue and public finance management


Civil society objectives: Civil society objectives 1. Publish What You Pay 2. Publish What You Receive 3. Publish How You Spend It


Publish What You Pay: Publish What You Pay Country-by-country disclosure of oil, gas and mining company payments to governments International Accounting Standards Listing requirements Export Credit Agency and private sector bank requirements EITI: individual company payments disclosure (Nigeria) Some companies have already begun to disclose in every country (Statoil, Newmont)


Publish What You Earn: Publish What You Earn Disclosure and independent auditing of government receipts from natural resources Engagement by IFIs and Regional Development Bank (EBRD, AfDB, ADB etc.) with resource-rich country governments to apply best practice and provide technical/financial assistance to raise standards Implementation of the Extractive Industries Transparency Initiative


Publish How You Spend It: Publish How You Spend It Prudent management and equitable allocation of resource wealth Transparent and participatory budget processes Effective revenue management frameworks at national and sub-national levels Adherence to IMF Guide on Resource Revenue Transparency and Codes on Fiscal Transparency Donor support for capacity building of civil society groups, media and parliamentarians to allow proper tracking of revenues and expenditures


EITI criteria: EITI criteria 1. Regular publication of all material oil, gas and mining payments by companies to governments ('payments') and all material revenues received by governments from oil, gas and mining companies ('revenues') to a wide audience in a publicly accessible, comprehensive and comprehensible manner. 2. Where such audits do not already exist, payments and revenues are the subject of a credible, independent audit, applying international auditing standards. 3. Payments and revenues are reconciled by a credible, independent administrator, applying international auditing standards and with publication of the administrator’s opinion regarding that reconciliation including discrepancies, should any be identified. 4. This approach is extended to all companies including state-owned enterprises. 5. Civil society is actively engaged as a participant in the design, monitoring and evaluation of this process and contributes towards public debate. 6. A public, financially sustainable work plan for all the above is developed by the host government, with assistance from the international financial institutions where required, including measurable targets, a timetable for implementation, and an assessment of potential capacity constraints.


Resources on EITI: Resources on EITI EITI Source Book Illustrative guide to implementation for governments and companies Examples of steps taken by governments and companies IMF Guide on Resource Revenue Transparency Summarizes best practice by governments Offers technical advice and suggestions


EITI: EITI Government leadership and business will key to its success But it’s not just a technical or administrative project – it’s also a consultative process requiring active and open civil society participation from the outset Multi-stakeholder at all levels: International: governed by an Board National: implementation overseen by national EITI committees EITI Trust Fund for technical and financial assistance International Secretariat will be formally established in Oslo


EITI: EITI Does: Depend on political will of country to sign up (voluntary at international level) Provide a useful framework to bring all parties to the table Have criteria that must be adhered to during implementation by all countries Require all companies operating in the country to comply Require full and active participation by civil society Require an independent audit of figures Now (or soon will) require validation of implementation by all countries signed up


EITI: EITI Does not: Guarantee disclosure company-by-company or by payment type (but Nigeria did!) Deal with transparency over revenue expenditures Address transparency of contracts and licensing procedures Cover other natural resource sectors (forestry, fishing etc) in its current format Have an international legal status Require anything of 'supporter' countries (G8)


Funding EITI: Funding EITI Implementing countries Costs involved: Operational costs of national secretariat (and its staff) and committee(s) Hiring of auditor Capacity building programmes Communications and media Sources of funding: EITI Trust Fund Direct support from donor governments and development agencies Some costs are taken on board by governments themselves


Funding EITI: Funding EITI Civil society Costs involved: Research, monitoring and advocacy projects Setting up and running civil society coalitions Outreach and communications to public/media Capacity building programmes and training events Regional and international exchanges Funding sources: Foundations and international NGOs Direct support from donor governments / development agencies Some grants available from IFIs and other international institutions


EITI for companies: EITI for companies Costs are minimal at country and international level No competitive risks at country level – EITI ensures level playing field Required to provide audited data to administrator/auditor in each country where EITI is being implemented Allocate staff contact person at country level and international level to liaise with relevant stakeholders


Beyond EITI: Beyond EITI Consistent standards at a global level: Resource-rich countries that are currently classified as 'supporters' or 'donors' of EITI should also implement EITI (Norway, Canada) EITI should become a more truly global process (engagement by Brazil, China, India and Russia) But on its own it is not sufficient… Revenue transparency should be incorporated into international norms and standards Global transparency regimes (accounting standards, listing requirements) are complementary and will re-enforce reforms


Russia: Russia Promote debate and civil society engagement Russian companies abroad Access to information at home


Slide25: Thank you E-mail: coordinator@publishwhatyoupay.org Web: www.publishwhatyoupay.org