http://resourcegovernanceindex.org/
2017 Resource Governance Index
Measuring the quality of governance
in the oil, gas and mining sectors of 81 countries.
http://resourcegovernanceindex.org/country-profiles/MMR/mining
http://resourcegovernanceindex.org/country-profiles/MMR/oil-gas
http://resourcegovernanceindex.org/about/global-report
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MYANMAR RESOURCE GOVERNANCE INDEX 2017
1. 7/30/2017 Resource Governance Index
http://resourcegovernanceindex.org/country-profiles/MMR/mining 1/6
2017 RESOURCE GOVERNANCE INDEX
Myanmar
MINING
Myanmar’s gemstone sector scores 27 of 100 points and
ranks 83rd among 89 assessments in the 2017 Resource
Governance Index (RGI). This assessment focuses solely on
Myanmar’s gemstone sector, which is governed by a
separate legal framework from other minerals. The
gemstone sector remains opaque, with a lack of public
access to rules on licensing or the scal regime. Myanmar
is one of the poorest countries in the world when
measured by gross domestic product per capita. The
country has su ered decades of internal con ict, partly
nanced by jade mining. Although signi cant variation
exists between valuations, Myanmar’s annual rough jade
production is generally estimated to be worth billions of
dollars. Improved transparency around the entire sector,
particularly in licensing, ownership, production and
revenue data, would be a step towards better governance.
MYANMAR (MINING): RGI
SCORE AND RANK
1st
89th
1
83rd
2. 7/30/2017 Resource Governance Index
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MYANMAR (MINING): RGI AND COMPONENT SCORES
VALUE REALIZATION 33 /100
REVENUE
MANAGEMENT
30
/100
ENABLING
ENVIRONMENT
19
/100
COMPOSITE
27 /100
Average
Index results summary
MYANMAR’S GEMSTONE LICENSING SYSTEM IS AMONG THE MOST POORLY GOVERNED IN THE WORLD
Myanmar’s gemstone sector governance is poor in both value realization and revenue
management, and the country’s index performance is worsened by a failing enabling
environment. Licensing is the weakest element within value realization, with a score of four
of 100, placing Myanmar’s gemstone mining sector second-to-last, above Turkmenistan, in
the ranking. The government has virtually no transparency requirements and discloses
almost no information related to the licensing process, contracts or the identities of those
with ultimate nancial interests in the gemstone sector and trading companies. The latest
Extractive Industries Transparency Initiative (EITI) country report contains an incomplete
list of gem and jade licenses, including some details on blocks and license holders. Most of
these permits have since expired and the identities of companies that won rights more
recently have not been disclosed. The government has committed to requiring disclosure
of bene cial owners of gemstone mining permit holders through its EITI bene cial
ownership disclosure roadmap.
3. 7/30/2017 Resource Governance Index
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MYANMAR (MINING): SUBCOMPONENT SCORES
Best index score
Value
realization
Value
realization
LicensingTaxation
Localim
pact
State-ow
ned
enterprises
0
20
40
60
80
100
Revenue
m
anagem
ent
Revenue
m
anagem
ent
N
ationalbudgeting
Subnationalresource
revenue
s...
Sovereign
w
ealth
funds
0
20
40
60
80
100
Enabling
environm
ent
Enabling
environm
ent
Voice
and
accountability
G
overnm
ente
ectiveness
Regulatory
qualityRule
oflaw
Controlofcorruption
Politicalstability
and
absenc...
O
pen
data
0
20
40
60
80
100
Myanmar’s governance is poor in revenue management. The government only discloses
the total annual budget, while revenues from natural resources and projections for
gemstones are not available, despite the fact that gemstones are the largest mining sector
contributor to government revenue. In the context of Myanmar’s peace process, resource-
rich, con ict-a ected regions of the country have called for greater sharing of natural
resource revenues and management responsibilities. Governance challenges evidenced by
4. 7/30/2017 Resource Governance Index
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the index results point to a need to improve transparency on actual and estimated
revenues as the rst step toward designing a revenue sharing system that distributes
bene ts equitably and allows oversight of compliance with these rules.
MYANMAR (MINING): LAW AND PRACTICE SCORES
Gap
Myanmar performs satisfactorily in governance of local impacts as a result of provisions
included in the general environmental law for disclosure of environmental and social
impact assessments and procedures for rehabilitation of closed mining projects. These
requirements are vague, however, and do not provide clear guidance for the gemstone
sector; as a result, indicators measuring practices in this area all achieve failing scores.
Myanmar demonstrates the widest gap between legal framework and implementation in
local impact among all assessments in the index. Lack of adequate oversight of gemstone
operations has reportedly led to human rights violations and environmental disasters.
Law
Practice
0 20 40 60 80 100
State-owned enterprise governance
MYANMAR GEMS ENTERPRISE REMAINS OPAQUE, RANKING GLOBALLY 21ST AMONG 22 STATE-OWNED
MINING ENTERPRISES GLOBALLY
With a failing score of 16 of 100, the Myanmar Gems Enterprise (MGE) ranks in the bottom
ten of all state-owned enterprises (SOE) assessed in the index, and lowest of those in the
Asia-Paci c region. In addition to MGE, military-controlled companies hold interests in
gemstone mining, which has kept the sector in the hands of the country’s former ruling
elite. Gemstones can be sold through “the Emporium,” a semi-annual trade event
organized by the MGE and the Myanmar Gems and Jewellery Entrepreneurs Association
(MGJEA), the country’s primary industry group, or through private transactions. Myanmar’s
SOE law and gemstone law do not contain rules on how the MGE joint ventures or private
operators should sell gemstones, which are mostly exported to China or Thailand.
Name of state-owned
enterprise
State
ownership
level
Revenue
(USD)
Score
(/100)
Rank
(/74 SOEs)
Rank
(/22 mining
SOEs)
Myanmar Gems
Enterprise
100% N/A 16 68 21
5. 7/30/2017 Resource Governance Index
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Governance performance across oil, gas and
mining sectors
THE OIL AND GAS SECTOR OUTPERFORMS THE GEMSTONE SECTOR IN LICENSING AND SOE
GOVERNANCE
The licensing process for gemstone mining in Myanmar is the least transparent of all
countries in the index with a score of four of 100, whereas the oil and gas sector’s license
awards are somewhat more transparent, scoring 24 of 100 and ranking 67th among 89
assessments. The competitive bidding rounds organized by Myanmar Oil and Gas
Enterprise (MOGE) in 2013 and 2014 were signi cantly more transparent than previous
rounds. SOEs play a central role in the licensing process in both sectors but details on the
process, other than nal results, are rarely published.
Transparency around how much the government collects from both sectors and how these
revenues ow to the national budget is poor. Aggregate information on revenues collected
from extractive companies is disclosed through EITI, but only a fraction of gemstone
companies and their payments were included in the EITI country report. In both sectors,
taxes and payments are collected by several agencies; MOGE and MGE collect most
revenues, though the Internal Revenue Department of the Ministry of Planning and
Finance, the Ministry of Natural Resources and Environmental Conservation and the
Ministry of Energy and Electrical Power, and (for gemstones), the General Administration
Department, also collect forms of tax. There are de cits between audit requirements and
practices; for example, extractive companies are not audited by the national tax agency.
Results of audits conducted by the O ce of the Auditor General (OAG) on the di erent tax-
collecting agencies, including the SOEs MOGE and MGE, are not disclosed to the public.
Furthermore, military-controlled holding companies MEC and UMEHL, which also work in
the gemstone sector, have historically been exempt from the OAG audit.
Di erences between the two sectors emerge in the governance of SOEs. The EITI country
report discloses the cost of non-operational activities, revenues transferred to the
government, and the cost of non-operational activities and production volume and value
for MOGE. However, it includes only an aggregate gure on MGE’s payments to
government.
MYANMAR: OIL & GAS VS. MINING SCORES
6. 7/30/2017 Resource Governance Index
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MYANMAR: OIL & GAS VS. MINING SCORES
100 80 60 40 20 0 20 40 60 80 100
CompositeComposite
MMIINNIINNGGOOIILL && GGAASS
100 80 60 40 20 0 20 40 60 80 100
Value realizationValue realization
Licensing
Taxation
Local impact
State-owned enterprises
100 80 60 40 20 0 20 40 60 80 100
Revenue managementRevenue management
National budgeting
Subnational resource reve...
Sovereign wealth funds
What is the Resource Governance Index?
The 2017 RGI assesses how 81 resource-rich countries govern their oil, gas and mineral
wealth. The index composite score is made up of three components. Two measure key
characteristics of the extractives sector – value realization and revenue management – and
a third captures the broader context of governance — the enabling environment. These
three overarching dimensions of governance consist of 14 subcomponents, which
comprise 54 indicators calculated by aggregating 133 questions and external data.
Independent researchers, overseen by NRGI, in each of the 81 countries completed a
questionnaire to gather primary data on value realization and revenue management. For
the third component, the RGI draws on external data from over 20 international
organizations. The assessment covers the period 2015-2016. For more information on the
index, how it was constructed, and references to external data, review the RGI
Methodology.
10. 2017 Resource Governance Index2017 Índice de la Gobernanza de Recursos Naturales: Colombia (minería)
The Natural Resource Governance Institute, an independent, non-profit organization, helps people
to realize the benefits of their countries’ oil, gas and mineral wealth through applied research, and
innovative approaches to capacity development, technical advice and advocacy.
Learn more at www.resourcegovernance.org
၂၀၁၇ခု သယံဇာတ စီမံခန္႔ခြဲမႈ အၫႊန္းကိန္း - ျမန္မာ (သတၱဳတူးေဖာ္ေရး)
ျမန္မာ - ေရနံႏွင့္ သဘာဝဓာတ္ေငြ႕ ႏွင့္ ေက်ာက္မ်က္တူးေဖာ္မႈ ရမွတ္မ်ား
RGI ဆိုသည္မွာအဘယ္နည္း။
၂၀၁၇ RGI သည္ ၈၁ ႏိုင္ငံေသာ သဘာ၀သယံဇာတ ၾကြယ္၀ေသာႏိုင္ငံမ်ားက ယင္းတို႔၏ ေရနံ၊ သဘာ၀ဓာတ္ေငြ႕ႏွင့္ ဓာတ္သတၳဳမ်ားကို မည္ကဲ့သို႔
ကိုင္တြယ္စီမံသည္ကို အကဲျဖတ္သည္။ အၫႊန္းကိန္းစုစုေပါင္း ရမွတ္တြင္ ၃မ်ိဳးပါဝင္သည္။ထုတ္လုပ္မႈက႑၏ တိုင္းတာမႈဆိုင္ရာ အဓိက လကၡဏာႏွစ္မ်ိဳးမွာ
တန္ဖိုးသတ္မွတ္ျခင္းႏွင့္ အခြန္စီမံခန္႔ခြဲမႈတို႔ျဖစ္သည္။ တတိယလကၡဏာျဖစ္သည့္ သဘာဝပတ္ဝန္းက်င္ ထိန္းသိမ္းမႈတြင္ ပိုမိုက်ယ္ျပန္႔ေသာ
ကိုင္တြယ္စီမံမႈပါဝင္သည္။ ယင္းကိုင္တြယ္စီမံမႈဆိုင္ရာ ေပါင္းကူးဖြဲ႕ယွက္ေနေသာ ပမာဏသံုးခုတြင္ အစိတ္အပိုင္း ၁၄ခုျဖင့္ ဖြဲ႕စည္းထားၿပီး ယင္းတို႔တြင္
အၫႊန္းျပကိန္း ၅၁ ခုပါဝင္သည္။ ယင္းတို႔ကို ေမးခြန္းစုစုေပါင္း ၁၃၃ ခုျဖင့္ တြက္ခ်က္သည္။
တန္ဖိုးသတ္မွတ္ျခင္းႏွင့္ အခြန္စီမံခန္႔ခြဲမႈတို႔ႏွင့္ပတ္သက္၍ အဓိကက်ေသာ အခ်က္အလက္မ်ားကို ေကာက္ယူရန္ အတြက္ ၈၁ ႏိုင္ငံအနက္
တစ္ႏိုင္ငံခ်င္းစီမွ NRGI က ႀကီးၾကပ္ေသာ သီးျခားလြတ္လပ္သည့္ သုေတသီမ်ားက ေမးခြန္းတစ္စံု ျပဳစုခဲ့သည္။ တတိယ လကၡဏာအတြက္ RGI သည္
ႏိုင္ငံတကာအဖြဲ႕အစည္း ၂၀ေက်ာ္မွ ျပင္ပအခ်က္အလက္မ်ားကို ေရးဆြဲသည္။ ယင္းအကဲျဖတ္ခ်က္ကို ၂၀၁၅-၂၀၁၆ခုႏွစ္ကာလပါဝင္သည္။ အၫႊန္းကိန္းႏွင့္
ယင္းကိုမည္သို႔ တည္ေဆာက္ခဲ့သည္ဆိုသည္ႏွင့္ပတ္သက္သည့္ အခ်က္အလက္မ်ားအတြက္ RGI နည္းကိုၾကည့္ပါ။
■ Mining ■ Oil and gas
-100 -50 0 50 100
Resource Governance Index
Value realization
Licensing
Taxation
Local Impact
State-owned enterprises
Revenue management
National budgeting
Subnational resource revenue sharing
Sovereign wealth funds
Enabling environment
Voice and accountability
Government effectiveness
Regulatory quality
Rule of law
Control of corruption
Political stability and absence of violence
Open data
သယံဇာတ စီမံခန္႔ခြဲမႈ အၫႊန္းကိန္း
တန္ဖိုးသတ္မွတ္မႈ
လိုင္စင္ခ်ထားေပးမႈ
အခြန္ေကာက္ခံျခင္း
ေဒသတြင္း ထိခိုက္မႈ
ႏိုင္ငံပိုင္ လုပ္ငန္းမ်ား
အခြန္ေငြ စီမံခန္႔ခြဲမွု
ႏိုင္ငံေတာ္ဘတ္ဂ်က္ခ်ထားေပးမႈ
ႏိုင္ငံေတာ္က တစ္စိတ္တစ္ေဒသ ပိုင္ေသာ အရင္းအျမစ္အခြန္ခြဲေဝျခင္း
အခ်ဳပ္အျခာအာဏာပိုင္ ဓနဥစၥာ ရန္ပုံေငြ
သဘာဝပတ္ဝန္းက်င္ ထိန္းသိမ္းျခင္း
ျပည္သူ႔သေဘာထားႏွင့္ တာဝန္ခံမႈ
အစိုးရ၏ ၾသဇာသက္ေရာက္မႈ
ထိန္းညႇိမႈ အရည္အေသြး
တရားဥပေဒ စိုးမိုးမႈ
အက်င့္ပ်က္ျခစားမႈ ထိန္းခ်ဳပ္ျခင္း
ႏိုင္ငံေရးတည္ၿငိမ္မႈႏွင့္ အၾကမ္းဖက္မႈမရွိျခင္း
ျမင္သာေသာ အခ်က္အလက္မ်ား
သတၱဳတူးေဖာ္ေရး ေရနံနွင့္သဘာဝဓါတ္ေငြ႔
11. 7/30/2017 Resource Governance Index
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2017 RESOURCE GOVERNANCE INDEX
Myanmar
OIL & GAS
Myanmar’s oil and gas sector scores 31 of 100 points and
ranks 77th among 89 assessments in the 2017 Resource
Governance Index (RGI). Compared to the country’s
gemstones sector, progress in transparency is more visible
in the oil and gas sector, which is emerging as a signi cant
contributor of revenue to the state’s co ers. According to
the rst Myanmar Extractive Industries Transparency
Initiative (EITI) report, the oil and gas sector contributed 85
percent of reported revenues from the extractive sector,
generating nearly a quarter of the government’s revenues.
Some reforms to the role of state-owned enterprises
(SOEs) are underway. A failing enabling environment
re ects the persistent challenges faced by a country that
has su ered decades of internal con ict. Myanmar’s
enabling environment is assessed as failing.
MYANMAR (OIL & GAS): RGI
SCORE AND RANK
1st
89th
77th
12. 7/30/2017 Resource Governance Index
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MYANMAR (OIL & GAS): RGI AND COMPONENT SCORES
VALUE REALIZATION 44 /100
REVENUE
MANAGEMENT
30
/100
ENABLING
ENVIRONMENT
19
/100
COMPOSITE
31 /100
Average
Index results summary
SMALL STEPS TOWARDS BETTER ENVIRONMENTAL CONTROLS AND LICENSING TRANSPARENCY
Myanmar’s oil and gas sector achieves its best component score, 44 of 100 points, in value
realization, the component that measures a country’s ability to extract value from its
natural resource endowment. Myanmar performs satisfactorily in taxation, although in the
absence of up-to-date sector legislation, the terms of hydrocarbon extraction lack the force
of law and are determined by the National Energy Policy and a model production sharing
contract. Reform of the legal framework, including the scal regime, has stalled, and the
public cannot hold the government accountable for compliance with contracts because oil
and gas contracts are not disclosed.
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MYANMAR (OIL & GAS): SUBCOMPONENT SCORES
Best index score
Value
realization
Value
realization
LicensingTaxation
Localim
pact
State-ow
ned
enterprises
0
20
40
60
80
100
Revenue
m
anagem
ent
Revenue
m
anagem
ent
N
ationalbudgeting
Subnationalresource
revenue
s...
Sovereign
w
ealth
funds
0
20
40
60
80
100
Enabling
environm
ent
Enabling
environm
ent
Voice
and
accountability
G
overnm
ente
ectiveness
Regulatory
qualityRule
oflaw
Controlofcorruption
Politicalstability
and
absenc...
O
pen
data
0
20
40
60
80
100
MYANMAR (OIL & GAS): RESOURCE GOVERNANCE TRENDS
14. 7/30/2017 Resource Governance Index
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MYANMAR (OIL & GAS): RESOURCE GOVERNANCE TRENDS
Myanmar has made progress in transparency, particularly by joining the EITI, which has
facilitated disclosure of basic data on reserves, production, and exports of oil, gas and jade.
According to the country’s EITI report, the government collected nearly USD 2.7 billion in oil
and gas tax and non-tax revenues and another USD 460 million in mining revenues in scal
year 2013–2014. In addition, EITI has been a forum for progress in civil society participation
in a mostly closed and centrally controlled country. (Myanmar’s enabling environment
scores just 19 of 100 points in the index.) Myanmar passed a new environmental law in
2012 with some environmental controls, but further reform of the environmental legal
framework is required. Indicators measuring enforcement of laws and actual disclosure
achieve failing scores.
There are no speci c subnational revenue sharing mechanisms for oil and gas sector
revenues. Companies can voluntarily contribute to social development funds, but because
local governments’ revenue generation abilities are limited and scal transfers take place
on an ad hoc basis, there is demand for a system for sharing resource revenues,
particularly in oil-and-gas-rich but poverty-stricken states.
Issue Score 2017 RGI Direction
Company payment disclosure 77/100
EIA / SIA rule 100/100
State-owned enterprise governance
MYANMAR OIL AND GAS ENTERPRISE’S LACK OF TRANSPARENCY HINDERS ACCOUNTABILITY ON PUBLIC
REVENUES
The Myanmar Oil and Gas Enterprise (MOGE) is the most important extractive industry
revenue generator in Myanmar. The government has announced a policy to reform SOEs,
granting them greater autonomy, including a right to keep a portion of revenues. MOGE
does not disclose information on how it sells the production share it collects from its
partnerships. Its reporting and corporate governance practices are failing, as it does not
report annually on its nances or operations. The 2016 Myanmar EITI report provides
some information on MOGE, including the share of revenues it retains, and that it provides
fuel subsidies on behalf of the government.
15. 7/30/2017 Resource Governance Index
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Name of state-owned
enterprise
State
ownership
level
Revenue
(USD)
Score
(/100)
Rank
(/74 SOEs)
Rank
(/52 oil & gas
SOEs)
Myanmar Oil and Gas
Enterprise
100% N/A 35 56 39
Governance performance across oil, gas and
mining sectors
THE OIL AND GAS SECTOR OUTPERFORMS THE GEMSTONE SECTOR IN LICENSING AND SOE
GOVERNANCE
The licensing process for gemstone mining in Myanmar is the least transparent of all
countries in the index with a score of four of 100, whereas the oil and gas sector’s license
awards are somewhat more transparent, scoring 24 of 100 and ranking 67 among 89
assessments. The competitive bidding rounds organized by Myanmar Oil and Gas
Enterprise (MOGE) in 2013 and 2014 were signi cantly more transparent than previous
rounds. SOEs play a central role in the licensing process in both sectors but details on the
process, other than nal results, are rarely published.
Transparency around how much the government collects from both sectors and how these
revenues ow to the national budget is poor. Aggregate information on revenues collected
from extractive companies is disclosed through EITI, but only a fraction of gemstone
companies and their payments were included in the EITI country report. In both sectors,
taxes and payments are collected by several agencies; MOGE and MGE collect most
revenues, though the Internal Revenue Department of the Ministry of Planning and
Finance, the Ministry of Natural Resources and Environmental Conservation and the
Ministry of Energy and Electrical Power, and (for gemstones), the General Administration
Department, also collect forms of tax. There are de cits between audit requirements and
practices; for example, extractive companies are not audited by the national tax agency.
Results of audits conducted by the O ce of the Auditor General (OAG) on the di erent tax-
collecting agencies, including the SOEs MOGE and MGE, are not disclosed to the public.
Furthermore, military-controlled holding companies MEC and UMEHL, which also work in
the gemstone sector, have historically been exempt from the OAG audit.
Di erences between the two sectors emerge in the governance of SOEs. The EITI country
report discloses the cost of non-operational activities, revenues transferred to the
government, and the cost of non-operational activities and production volume and value
for MOGE. However, it includes only an aggregate gure on MGE’s payments to
government.
MYANMAR: OIL & GAS VS. MINING SCORES
th
16. 7/30/2017 Resource Governance Index
http://resourcegovernanceindex.org/country-profiles/MMR/oil-gas 6/6
MYANMAR: OIL & GAS VS. MINING SCORES
100 80 60 40 20 0 20 40 60 80 100
CompositeComposite
OOIILL && GGAASSMMIINNIINNGG
100 80 60 40 20 0 20 40 60 80 100
Value realizationValue realization
Licensing
Taxation
Local impact
State-owned enterprises
100 80 60 40 20 0 20 40 60 80 100
Revenue managementRevenue management
National budgeting
Subnational resource reve...
Sovereign wealth funds
What is the Resource Governance Index?
The 2017 RGI assesses how 81 resource-rich countries govern their oil, gas and mineral
wealth. The index composite score is made up of three components. Two measure key
characteristics of the extractives sector – value realization and revenue management – and
a third captures the broader context of governance — the enabling environment. These
three overarching dimensions of governance consist of 14 subcomponents, which
comprise 54 indicators calculated by aggregating 133 questions and external data.
Independent researchers, overseen by NRGI, in each of the 81 countries completed a
questionnaire to gather primary data on value realization and revenue management. For
the third component, the RGI draws on external data from over 20 international
organizations. The assessment covers the period 2015-2016. For more information on the
index, how it was constructed, and references to external data, review the RGI
Methodology.
17. 2017
Resource
Governance
Index
Myanmar (oil and gas) 77th
MYANMAR OIL AND GAS:
RGI SCORE AND RANK
Good
(>75)
Satisfactory
(60-74)
Weak
(45-59)
Poor
(30-44)
Failing
(<30)
Myanmar’s oil and gas sector scores 31 of 100 points and ranks 77th
among 89 assessments in the
2017 Resource Governance Index (RGI). Compared to the country’s gemstones sector, progress in
transparency is more visible in the oil and gas sector, which is emerging as a significant contributor
of revenue to the state’s coffers. According to the first Myanmar Extractive Industries Transparency
Initiative (EITI) report, the oil and gas sector contributed 85 percent of reported revenues from the
extractive sector, generating nearly a quarter of the government’s revenues. Some reforms to the role of
state-owned enterprises (SOEs) are underway. Myanmar’s enabling environment is assessed as failing.
Myanmar oil and gas: RGI and component scores.
VALUE REALIZATION 44/100
REVENUE MANAGEMENT 30/100
ENABLING ENVIRONMENT 19/100
COMPOSITE
31/100
18. 2017 Resource Governance Index
2
2017 Resource Governance Index: Myanmar (oil and gas)
INDEX RESULTS SUMMARY
Myanmar has taken small steps toward better environmental controls and licensing transparency
Myanmar oil and gas: subcomponent scores
Myanmar’s oil and gas sector achieves its best component score, 44 of 100 points, in value realization, the component
that measures a country’s ability to extract value from its natural resource endowment. Myanmar performs
satisfactorily in taxation, although in the absence of up-to-date sector legislation, the terms of hydrocarbon extraction
lack the force of law and are determined by the National Energy Policy and a model production sharing contract.
Reform of the legal framework, including the fiscal regime, has stalled, and the public cannot hold the government
accountable for compliance with contracts because oil and gas contracts are not disclosed.
Myanmar oil and gas: resource governance trends
Issue 2017 RGI Score Direction
Company payment disclosure 77 s
Environmental impact assessment/
social impact assessment rule
100 s
Myanmar has made progress in transparency, particularly by joining the EITI, which has facilitated disclosure of
basic data on reserves, production, and exports of oil, gas and jade. According to the country’s EITI report, the
government collected nearly USD 2.7 billion in oil and gas tax and non-tax revenues and another USD 460 million
in mining revenues in fiscal year 2013–2014. In addition, EITI has been a forum for progress in civil society
participation in a mostly closed and centrally controlled country. (Myanmar’s enabling environment scores just 19
of 100 points in the index.) Myanmar passed a new environmental law in 2012 with some environmental controls,
but further reform of the environmental legal framework is required. Indicators measuring enforcement of laws and
actual disclosure achieve failing scores.
0
20
40
60
80
100
Policy area performance across
the extractive's value chainValuerealization
ResourceGovernanceIndex
Licensing
LocalImpact
Taxation
State-ownedenterprises
Revenuemanagement
Subnationalresourcerevenuesharing
Nationalbudgeting
Sovereignwealthfunds
Enablingenvironment
Voiceandaccountability
Governmenteffectiveness
Regulatoryquality
Ruleoflaw
Politicalstabilityandabsenceofviolence
Controlofcorruption
Opendata
19. 2017 Resource Governance Index
3
2017 Resource Governance Index: Myanmar (oil and gas)
There are no specific subnational revenue sharing mechanisms for oil and gas sector revenues. Companies can
voluntarily contribute to social development funds, but because local governments’ revenue generation abilities are
limited and fiscal transfers take place on an ad hoc basis, there is demand for a system for sharing resource revenues,
particularly in oil-and-gas-rich but poverty-stricken states.
STATE-OWNED ENTERPRISE GOVERNANCE
Myanmar Oil and Gas Enterprise’s lack of transparency hinders accountability on public revenues
Name
State ownership
level Revenue [USD] Score/100 Rank/74 SOEs
Rank/52 oil and
gas SOEs
Oil and gas:
Myanmar Oil and Gas
Enterprise (MOGE)
100% N/A 35 56 39
The Myanmar Oil and Gas Enterprise (MOGE) is the most important extractive industry revenue generator in
Myanmar. The government has announced a policy to reform SOEs, granting them greater autonomy, including
a right to keep a portion of revenues. MOGE does not disclose information on how it sells the production share
it collects from its partnerships. Its reporting and corporate governance practices are failing, as it does not report
annually on its finances or operations. The 2016 Myanmar EITI report provides some information on MOGE,
including the share of revenues it retains, and that it provides fuel subsidies on behalf of the government.
GOVERNANCE PERFORMANCE ACROSS OIL, GAS AND MINING SECTORS
The oil and gas sector outperforms the gemstone sector in licensing and SOE governance
The licensing process for gemstone mining in Myanmar is the least transparent of all countries in the index with a score
of four of 100, whereas the oil and gas sector’s license awards are somewhat more transparent, scoring 24 of 100 and
ranking 67th
among 89 assessments. The competitive bidding rounds organized by Myanmar Oil and Gas Enterprise
(MOGE) in 2013 and 2014 were significantly more transparent than previous rounds. SOEs play a central role in the
licensing process in both sectors but details on the process, other than final results, are rarely published.
Transparency around how much the government collects from both sectors and how these revenues flow to the
national budget is poor. Aggregate information on revenues collected from extractive companies is disclosed through
EITI, but only a fraction of gemstone companies and their payments were included in the EITI country report. In
both sectors, taxes and payments are collected by several agencies; MOGE and MGE collect most revenues, though
the Internal Revenue Department of the Ministry of Planning and Finance, the Ministry of Natural Resources and
Environmental Conservation and the Ministry of Energy and Electrical Power, and (for gemstones), the General
Administration Department, also collect forms of tax. There are deficits between audit requirements and practices; for
example, extractive companies are not audited by the national tax agency. Results of audits conducted by the Office
of the Auditor General (OAG) on the different tax-collecting agencies, including the SOEs MOGE and MGE, are not
disclosed to the public. Furthermore, military-controlled holding companies MEC and UMEHL, which also work in
the gemstone sector, have historically been exempt from the OAG audit.
Differences between the two sectors emerge in the governance of SOEs. The EITI country report discloses the cost of
non-operational activities, revenues transferred to the government, and the cost of non-operational activities and pro-
duction volume and value for MOGE. However, it includes only an aggregate figure on MGE’s payments to government.
20. 2017 Resource Governance Index2017 Resource Governance Index: Myanmar (oil and gas)
The Natural Resource Governance Institute, an independent, non-profit organization, helps people
to realize the benefits of their countries’ oil, gas and mineral wealth through applied research, and
innovative approaches to capacity development, technical advice and advocacy.
Learn more at www.resourcegovernance.org
Myanmar oil and gas: oil and gas vs. Mining scores
What is the RGI?
The 2017 RGI assesses how 81 resource-rich countries govern their oil, gas and mineral wealth. The index
composite score is made up of three components. Two measure key characteristics of the extractives sector – value
realization and revenue management – and a third captures the broader context of governance — the enabling
environment. These three overarching dimensions of governance consist of 14 subcomponents, which comprise 51
indicators, which are calculated by aggregating 133 questions.
Independent researchers, overseen by NRGI, in each of the 81 countries completed a questionnaire to gather
primary data on value realization and revenue management. For the third component, the RGI draws on external
data from over 20 international organizations. The assessment covers the period 2015-2016. For more information
on the index and how it was constructed, review the RGI Methodology.
■ Mining ■ Oil and gas
-100 -50 0 50 100
Resource Governance Index
Value realization
Licensing
Taxation
Local Impact
State-owned enterprises
Revenue management
National budgeting
Subnational resource revenue sharing
Sovereign wealth funds
Enabling environment
Voice and accountability
Government effectiveness
Regulatory quality
Rule of law
Control of corruption
Political stability and absence of violence
Open data
28. Foreword
2017 Resource Governance Index
2 | WWW.RESOURCEGOVERNANCEINDEX.ORG
E
ffective governance of the oil, gas and
mining sectors is a persistent challenge,
especially for low- and middle-income
countries. But as the Resource Governance
Index reveals, it is not an insurmountable one. In
the index we see many examples of developing
countries defying expectations and stereotypes—
sometimes in one policy area, sometimes in
many—making progress toward a more judicious
use of their natural resources for national
development. Unfortunately, this is not true for
all countries, some having experienced in recent
years worrisome setbacks in the proper use of
their natural resources.
Poor management and corruption can take
root anywhere, in countries rich or poor. These
scourges cannot be eliminated everywhere, all
of the time. But citizens, journalists, legislators,
politicians, companies, investors and academics
can work to mitigate them, and expose them early
on—and that is where the data carefully compiled
here by the Natural Resource Governance
Institute become so valuable.
The staff of our institute have worked hard to
provide evidence and documentation to assist
in the critical struggle for better natural resource
governance. Hopefully the insightful data
provided by the index will contribute to the work
of those committed to economic prosperity and
social justice in resource-producing countries.
Ernesto Zedillo Ponce de León
Professor in the Field of International Economics
and Politics, Yale University
Former President of Mexico
Chair, Board of Directors
Natural Resource Governance Institute
29. Introduction
WWW.RESOURCEGOVERNANCEINDEX.ORG | 3
T
he extraction of oil, gas and minerals is
one of the most politically, socially and
economically complex undertakings in
development. It is a business that connects the
world and sates much of our hunger for energy and
raw materials. It produces inputs to almost every
physical product manufactured. It has contributed
to one of the most fundamental challenges in
human history—climate change. It has produced
trillions of dollars in revenues.
These vast sums of money contrast cruelly with
the poverty of many countries where resources
are found—1.8 billion people live in poverty in
the scores of countries assessed in this index.1
The empirical evidence is clear: changing this dire
situation requires improving governance—the
institutions, rules and practices that determine
how company executives and government officials
make decisions and engage and affect citizens,
communities and the environments they inhabit.
To improve governance, one has to diagnose
in detail what works and what does not, and that
requires measurement. The Resource Governance
Index assesses the quality of natural resource
governance in 81 countries that together produce,
among other commodities, 82 percent of the
world’s oil, 78 percent of its gas and 72 percent
of all copper.2
The index has as its intellectual
foundation the Natural Resource Charter; both are
the product of the expertise of NRGI staff and a
network of external scholars and practitioners.
The index is the sum total of 89 country-level
assessments (in eight countries we assess both
oil and gas and mining sectors), formulated using
a framework of 149 critical questions answered
by 150 researchers, drawing upon almost
10,000 supporting documents. Researchers’
careful assessments of extractive sector factors
are combined with pre-existing data, from
other sources, on countries’ broader enabling
environments. The findings presented in this
report reflect highlights from a much larger set
of data and country profiles available online at
www.resourcegovernanceindex.org.
So what does the index tell us? The data show
that despite substantial efforts from governments,
advocates and the international community, in
most countries governing resources remains a
major challenge. Every country could improve in at
least one important area of governance, and most
countries have significant room for progress in
multiple areas.
At the same time, reformers have achieved a
great deal. The index shows that many countries—
even some in very challenging situations—have
taken concrete steps in the form of rules and
procedures. Those promoting change need not
look far to find inspiration on how to better
govern—there are countries pursuing innovative
approaches and progressing in every region. The
evidence shows that more progress is taking
place in the adoption of rules than in their
actual practice; often those who seek improved
governance should in many places focus on
implementing existing legal frameworks. We also
learn that better resource governance emerges in
countries where civic space is safeguarded and
corruption risks are mitigated.
Considering the imperative of inclusive growth
in resource-rich countries, improvements at the
international level are also called for—including
by members of the G7, multinational companies
and international financial institutions. Work
remains for producing countries that seek further
economic transformation and diversification,
better protection of the environment and assurance
that citizens benefit from extraction.
The main priorities and preferred pathways to
action will vary across countries and actors, which
means that informed and inclusive public debate is
essential. These dialogues must incorporate politi-
cal, economic, social and environmental consider-
ations. We trust that the evidence in this index will
inform such debates and the resulting decisions.
Daniel Kaufmann
President and CEO
Natural Resource Governance Institute
32. Creating the 2017
Resource Governance Index
2017 Resource Governance Index
6 | WWW.RESOURCEGOVERNANCEINDEX.ORG
3.40 YUOP▲60.29 RETR▲67.89
3.40 YUOP▲60.29 RETR▲67.89
Creating the 2017 Resource Governance Index
NRGI creates a questionnaire
consisting of 149 questions.
One hundred and fifty experts, in
81 countries, research the issues,
compile documentation and
complete the questionnaire.
1. 2.
NRGI collates and
assesses the quality of
all collected data.
3.
NRGI translates raw data into scores for the two
bespoke components of the Resource Governance
Index―value realization and revenue management.
4.
NRGI collects additional data to capture countries’ “enabling
environments”―the broader institutional governance and
transparency context.
5.
NRGI calculates the
index using the
primary and
secondary data.
NRGI publicizes and disseminates the
index and provides recommendations
to key stakeholders.
8.
NRGI analyzes
results and
generates key
findings.
7.
6.
Governments,
journalists, civil society
actors and companies
use the findings from
the index to improve
resource governance
for the benefit of
citizens and investors.
9.