The global standard for transparency in the extractives sector
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The document discusses the Extractive Industries Transparency Initiative (EITI), which promotes transparency around oil, gas, and mineral resource extraction. It notes that many resource-dependent countries are facing fiscal crises due to falling commodity prices and the COVID-19 pandemic. The EITI establishes a global standard for transparency and accountability in the extractives sector. It requires disclosure of payments, contracts, production data, and more. Implementing countries set up multi-stakeholder groups to oversee EITI implementation and ensure data is communicated to the public. The EITI is working to expand transparency to new areas like commodity trading, subnational revenue distribution, and environmental reporting.
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The global standard for transparency in the extractives sector
- 1. The global standard for the good governance of oil, gas and mineral resources. Mark Robinson Sussex Development Lecture 30 April 2020 Advancing the Frontiers of Transparency and Accountability in the Extractives Sector
- 2. live in countries rich in oil, gas or minerals* With good governance, revenues from the extractive industries can have a significant impact on reducing poverty and boosting shared prosperity. 3.5 billion people * Source:World Bank
- 3. Key questions 1. What are the implications of the triple crisis for the extractives sector? 2. Which aspects of the EITI are most relevant under crisis conditions? 3. How to ensure the continued relevance of governance in the extractive sector post crisis?
- 4. The global standard for the good governance of oil, gas and mineral resources. Resource dependence, crisis conditions
- 5. GDP dependency on natural resources 42.7% 40.5% 38.5% 38.0% 37.1% 33.2% 32.7% 31.5% 25.3% 25.2% Republic of Congo Mongolia Libya Iraq Kuwait Suriname Democratic Republic of Congo Timor-Leste Guyana Liberia Natural resource rents (% GDP) Source:World Bank 8 of 10 countries most dependent on natural resource (% GDP) implement the EITI
- 6. Economic significance of extractive resources 97% 91% 82% 35% 27% 26% 24% 23% 23% 20% Iraq Nigeria Chad Kazakhstan Guinea Zambia Democratic Republic of Congo Trinidad and Tobago Timor-Leste Myanmar Extractive revenue as % of government revenue in EITI implementing countries (2016)
- 7. Triple crisis: pandemic, oil and economy Consequence: Major fiscal crisis for many resource-dependent countries Oil price crash from over $50 to less than $20 a barrel due to 1/3 drop in global demand and Russia-Saudi stand-off Covid-19 pandemic threatens to overwhelm public health systems Decreased demand for commodities surge in unemployment in mines and downstream industries
- 8. Source:Visual Capitalist Impact on oil prices
- 9. Breakeven oil prices Source: Energy Intelligence, CEIC, Nasdaq, Council on Foreign Relations
- 10. Source: S&P Global Market Intelligence, S&PGlobal Platts, LME, CMEGroup Impact on metal prices
- 11. The global standard for the good governance of oil, gas and mineral resources. What is the EITI?
- 12. Through its multistakeholder approach and global standard, the EITI promotes the open and accountable management of oil, gas and mineral resources
- 13. EITI: Then and now Civil society campaign on extractives sector corruption Early 2000s 2002 2003 2007 2013 2016 UK PMTony Blair announces the launch of the EITI WorldSummit on Sustainable Development Summit, Johannesburg EITI Principles agreement to increase transparency of payments and revenues in the extractive sector Lancaster House conference, London EITI International Secretariat established at the invitation of the Government of Norway Oslo EITI Standard sets out the rules and norms for compliance and reporting EITI GlobalConference, Sydney 2016 EITI Standard includes project reporting and beneficial ownership EITI GlobalConference, Lima 2019 2019 EITI Standard includes contracts, commodity trading, state participation, environment and gender EITI GlobalConference, Paris
- 14. EITI Principles on transparency 5. We underline the importance of transparency by governments and companies in the extractive industries and the need to enhance public financial management and accountability. 6. We recognise that achievement of greater transparency must be set in the context of respect for contracts and laws. 7. We recognise the enhanced environment for domestic and foreign direct investment that financial transparency may bring. 8. We believe in the principle and practice of accountability by government to all citizens for the stewardship of revenue streams and public expenditure. 9. We are committed to encouraging high standards of transparency and accountability in public life, government operations and in business.
- 15. EITI globally in numbers ■ 53 implementing countries ■ 60+ supporting companies ■ USD 2.6 trillion in revenues disclosed in EITI Reports (400+ fiscal years) ■ 95% of EITI data is publicly available in open data format
- 17. Expectations for EITI supporting companies ■ Publicly declare support for the EITI and promote transparency ■ Disclose taxes and payments to governments of EITI implementing countries ■ Publicly disclose beneficial owners ■ Engage in rigorous procurement and due diligence processes ■ Support disclosure of future licenses and contracts ■ Work with governments to deliver natural resources in a manner that benefits societies and communities ■ Ensure that company processes are appropriate to deliver the data required for high standards of accountability
- 18. Civil society partners ■ Publish WhatYou Pay ■ Natural Resource Governance Institute ■ Oxfam International ■ Transparency International ■ Over 800 national NGOs
- 19. Civil society protocol The participation of civil society is fundamental to achieving the objectives of EITI, in particular that “public understanding of government revenues and expenditure over time could help public debate and inform choice of appropriate and realistic options for sustainable development”.
- 20. The global standard for the good governance of oil, gas and mineral resources. How the EITI works
- 21. The EITI Standard The EITI Standard outlines the requirements applicable to countries implementing the EITI, as well as the Articles of Association governing the EITI.
- 22. Data disclosed under the EITI Natural resources Contracts and licenses Production Revenue collection Revenue allocation Social and economic spending Public benefit The EITI Standard covers • Contracts and model contracts • Beneficial ownership • License data and coordinates • Exploration activities • Production figures • Export data • Tax revenues • Sales by governments and state-owned enterprises • Infrastructure and bartner agreements • Revenue management • Distribution of revenues • Subnational transfers • CSR payments • Quasi-fiscal expenditures • Contribution to national economy • Employment figures on gender • Environmental impact
- 23. A platform for informed public debate CIVIL SOCIETY e.g. advocating for policies that represent the interest of citizens GOVERNMENT e.g. development of evidence-based policies, transformation of national oil companies COMPANIES e.g. predicable business environment, manage reputational risk INVESTORS e.g. ESGs, Environmental, Social & Governance Standards
- 24. How the EITI achieves impact Implemented at the national level, where local multi-stakeholder groups (MSGs) oversee implementation and ensure alignment with national priorities. MSGs are responsible for publishing, analysing and communicating EITI data to wider audiences, from ministers and parliamentarians to local communities and civil society groups. Data is leveraged by stakeholders and wider society to inform public debate, strengthen governance, and support inclusive development.
- 25. Systematic disclosure Building open and transparent government systems Promoting systematic disclosure of government and industry data Enabling public access, analysis and debate Mainstreaming
- 26. Systematic disclosure Open data, build trust Almost 90% of EITI reported data is available in open and structured format. Report available, no open data Report available, open data under review Report and open data available
- 27. EITI data can: ■ Foster public debate ■ Inform the design of governance reforms ■ Strengthen tax collection ■ Indentify corruption risks ■ Track revenue distribution to communities ■ Create financial models ■ Monitor contracts ■ Clarify the investment environment ■ Inform credit and environmental, social and governance (ESG) ratings ■ Facilitate information- sharing across agencies Right: Civil society and youth advisory committee meeting, Trinidad & Tobago EITI (TTEITI)
- 28. Disclosure in Asia: Monitoring Afghanistan’s licenses online In 2018, the Ministry of Mines and Petroleum launched an online transparency portal publishing information on: Mineral rights and licenses License holders Related payments afghanistan.revenuedev.org
- 29. Disclosure in Africa: How the EITI can help mobilise domestic resources Strengthening governance and tax collection ■ Improving tax administration ■ Identifying practices that could undermine taxation ■ Fostering dialogue about fiscal policies and reform
- 30. The global standard for the good governance of oil, gas and mineral resources. Where are the frontiers of extractives transparency today?
- 31. Responding to crisis: why transparency matters Data that is timely and relevant to decision makers Multi-stakeholder structures that build trust Promoting civil society and public debate, to hold companies and decision makers accountable
- 32. Contract transparency Revealing the terms under which resources are extracted and deals are made Contract transparency enables citizens to understand and monitor compliance with the terms, obligations and payments arising from the extractive projects in their countries. EITI implementing countries are required to disclose contracts and licenses after 1 January 2021. 31 EITI countries have disclosed at least some contracts 900+ contracts have been published by EITI countries 16 companies support contract transparency
- 33. Over half of the USD 2.5 trillion revenues disclosed by EITI countries come from the sale of the state’s oil, gas or minerals to trading companies. With commodity prices under pressure deals between traders and SOEs present a potential corruption risk; publishing data on transactions mitigates that risk. State-owned enterprises (SOEs) and commodity trading
- 34. State-owned enterprises (SOEs) and commodity trading Physical product and payment flows in the Iraqi oil sector
- 35. State-owned enterprises (SOEs) and commodity trading The EITI was a critical source for NRGI’s National Oil Company Database, which features more than 70,000 data points on more than 70 NOCs worldwide.
- 36. Subnational and local-level reporting Reporting on whether communities – who may be vulnerable in the current crisis – are receiving their share of extractive revenues The EITI Standard requires the disclosure of significant transfers between national and subnational government entities when mandated by a national constitution, statute or other revenue sharing mechanism. Petroleum revenue District treasury Central government treasury Central governments (85% revenue) Revenue sharing for local governments (15%) Province Other districts Producing district Central government budget
- 37. Environmental reporting Responding to a changing environment 28 EITI implementing countries have disclosed information on environmental payments or monitoring of environmental impact of EITI reporting. Material environmental payments from companies to governments should be disclosed The EITI’s role in energy transition is to be considered by the EITI International Board Equinor Dudgeon offshore wind farm, photo by Jan Arne Wold www.equinor.com
- 38. Making extractives work for women Participation of women is key to a rebuilding an extractive sector on an equitable basis The EITI Standard requires countries to disaggregate extractive sector employment data by gender, role and project. This will shed new light on the challenge of equal employment in the extractive industries.
- 39. Stronger institutions and governance frameworks help reduce the scope for corruption and mobilise domestic resources for sustainable development. “ EITI and the Sustainable Development Goals EITIChair Rt. Hon. Helen Clark 1. Widening the political space for stakeholder participation 2. Building accountable and inclusive institutions 3. Strengthening domestic resource mobilisation Three ways EITI implementation can help meet the UN SDGs:
- 40. Looking ahead: post crisis energy governance Long-term demand for fossil fuels is likely to decline even as global prices remain low Growing market and low prices for renewables will sustain demand for metals and rare earths Governance issues will retain relevance with a broader energy mix, focusing attention on contracts, revenues and the public good Open data and accountability lie at the heart of energy governance and will be integral to the continued role and relevance of the EITI
- 42. The global standard for the good governance of oil, gas and mineral resources. Annexe
Editor's Notes
- A strong visual here as background (?) would be great. A picture that links mining and poverty reduction? Also embedding the EITI video will make sense Key messages Natural resources have the potential to drive growth, development and poverty reduction in developing countries. As data from the World Bank shows, the extractive industries play a dominant role in the lives of 3.5 billion people living in 81 countries. Many of these countries face a myriad of challenges, such as resource dependency and weak governance. Improving the governance of resource revenues can help reduce poverty and boost the economic impact of extractive industry revenues. A fundamental principle is that resources belong to a country’s citizens. https://www.worldbank.org/en/topic/extractiveindustries/overview
- The most vulnerable groups also live in countries that depend on natural resources.
- The most vulnerable groups also live in countries that depend on natural resources.
- How to ensure the continued relevance of governance in the extractive sector under current crisis conditions? Protecting rather than advancing frontiers of transparency and accountability?
- Here’s a timeline of the drop of mineral commodity prices, so you can graphically see the impact of Covid-19 on the market.
- Heading? What does the EITI do? Key messages The EITI is a global effort to establish transparency as the norm in the extractive industries. It builds trust and accountability through its multi-stakeholder approach, which facilitates dialogue among governments, civil society and companies. Its global standard requires the disclosure of information along the extractive industry value chain from the point of extraction, to how revenues make their way through the government, and how they benefit the public. Again, a strong visual here – an MSG meeting or similar – would add value. Does not need to be background
- The EITI has an extensive experience in promoting transparency in the extractive industries. EITI member countries produce reprots annually that cover the entire value chain.
- (Optional detail to last slide) Key messages Some of the world’s largest oil, gas and mining companies have chosen to become EITI supporting companies. In doing so, they publicly support the EITI and help to promote the EITI Standard internationally and in countries where it operates. Extractive companies operating in countries implementing the EITI benefit from enhanced relations with stakeholders and local communities, better risk management, improved company reputation and the opportunity to demonstrate industry leadership. Many of the world’s largest oil, gas and mining companies are therefore EITI supporting companies.
- Here are the expectations for EITI supporting companies. Companies are expected to: declare support for the EITI, disclose taxes and payments to governments as required in EITI implementing countries, disclosure their beneficial owners, conduct adequate due diligence for partners and vendors, and disclose contracts and licenses. You’ll see that these expectation largely mirror what is required under the EITI Standard for companies operating in EITI implementing countries.
- The participation of civil society is fundamental to achieving the objectives of EITI, including Principle 4 which states that “public understanding of government revenues and expenditure over time could help public debate and inform choice of appropriate and realistic options for sustainable development”. The active participation of civil society in the EITI process is key to ensure that the transparency created by the EITI leads to greater accountability. A primary motivation for the adoption of the EITI Standard was the desire to produce more relevant, more reliable and more usable information, and better link this information to wider reforms in the governance of the extractive sector or of the management of public accounting and revenue management. Citizens’ ability to work actively to make use of the information generated by the EITI is therefore a critical component of EITI implementation and civil society participation in the EITI.
- Key messages A key strength of the EITI model is that it draws on the accumulated experience of member countries to develop and enforce requirements along the value chain. National multi-stakeholder groups identify local priorities and develop the implementation model that is best suited to their context. The EITI Standard encompasses number of requirements, which set out what kind of information/data needs to be disclosed by implementing countries. All implementing countries abide by the same disclosure requirements, although the applicability of these requirements differ per country. Once countries disclose information (in the form of EITI Reports, or online disclosures), the EITI assesses their level of progress in implementing the EITI Standard.
- The EITI Standard requires countries and companies to disclose information on the key steps in the governance of oil, gas and mining revenues, which we call the EITI value chain. Here is a short overview what the value chain steps cover: Legal framework, distribution of licenses and contracts This section sets the stage of how the sector is governed, particularly in relation to the rights to extract. Exploration and production This covers information on what exploration activities are under way and how much the country produces and exports. Revenue collection The major companies disclose what they pay to the government in tax, royalties, signature bonuses, etc. The government discloses what it receives. The figures are broken down by company, project and revenue stream. Revenue allocation Once revenues are collected from companies, they need to be recorded in government accounts. Usually, most of the revenue goes to the central government. Sometimes it goes straight to or is transferred to the subnational government or to special funds or projects. Social and economic spending This covers some of the ways the extractive sector is contributing to social and economic development. Companies disclose where funds have been mandated to be spent on social projects. The government is asked to publish information about the role of the extractive sector in the economy. How many people are employed in the sector? How important is the contribution of the sector to the economy? This allows citizens to understand the importance of oil, gas and mining in their country.
- Replace with graphic from Progress Report 2019, page 34? Extractive industry transparency should not be confined to an EITI Report, but rather become an integral part of how governments manage their extractive sector. As the world becomes more digital, EITI disclosures are increasingly moving online, making data more timely, useful and cost-effective. Systematic disclosure means disclosing EITI data online and at the source, in machine-readable, open data format.
- Open data key messages Open, shareable and useable data informs public debate. It enables academia, media and think tanks to analyse information, make recommendations and hold governments and businesses to account. Open data also helps to improve the investment climate. By providing online and transparent ways to register a company, participate in a bidding process or submit a tax return online, governments make it more appealing for companies to invest in extracting natural resources. Most importantly, open data helps to build trust among citizens, especially among populations affected by extractive operations, by enabling them to access real-time data about projects in their region, understand the terms of contracts and the revenues governments receive and transfer to subnational bodies. EITI Open data policy The revised EITI Open data policy, adopted in April 2019, places increased responsibility on reporting entities to publish information such as beneficial ownership or project-level revenue, directly and in an open format. Where needed, countries can rely on EITI reporting to publish this information, but the default expectation is that it should be routinely disclosed by the entity collecting it. This allows information to be published in a timely way and in the place that users of the data would expect to find it. All countries must agree a clear policy on the access, release and re-use of data that is relevant to the EITI Standard. In addition, the EITI now has a mandate to engage with other organisations developing standards and supporting open data in order to facilitate learning, to the benefit of implementing countries. EITI countries can leverage other cross-sectoral initiatives, such as the Open Government Partnership (OGP) and the International Budget Partnership, to improve disclosures and government services.
- Key message The impact of the EITI stems from the way countries leverage the EITI as a platform to improve governance, resulting in direct and indirect benefits to citizens.
- Good case practice: Afghanistan In 2018, the Ministry of Mines and Petroleum launched an online transparency portal that publishes information on licenses, license holders, production and associated payments. To avoid duplication, unique identification numbers for each project are being assigned, enabling government agencies and provinces to strengthen regulation and accountability. Good case practice: Kyrgyz Republic The Open Budget portal discloses data on all transactions of the Central Treasury, including extractive sector revenues. Revenues are disaggregated by company, date and revenue stream. Further work is needed to address disaggregation by recipient agency, and the cross-referencing with the National Budget Classification system.
- Delivering better citizen services, such as schools, health care and infrastructure, costs money. In many EITI countries, revenues from the extractives sector can play an important role in financing these services. The Addis Ababa Action Agenda on Financing for Development, agreed in 2015, has refocussed attention on strengthening government systems to harness domestic resources for development. The EITI contributes to domestic resource mobilisation by: Improving tax administration Identifying practices that could undermine taxation Fostering dialogue about fiscal policies and reform The EITI Standard requires transparency on the roles and responsibilities of government agencies in managing the fiscal system. This enables greater government accountability in how government agencies exercise their tax duties vis-à-vis oil, gas and mining companies operating in each country. EITI reporting also highlights the need for capacity building and improvement in inter-agency collaboration, thus contributing to improved tax administration. In Democratic Republic of Congo, for example, DRC EITI recommended increasing the proportion of extractive revenues flowing to the State Treasury, away from state agencies and companies that were outside of formal government oversight. Today, more than two thirds of the revenues go directly to the treasury, up from less than a half. In Afghanistan, the Minister of Finance did not have sufficient information on extractives companies with tax liabilities to the government, impeding its ability to collect those taxes. The Ministry of Mines and Petroleum now publishes information on thousands of license holders and their related payments, which provides valuable information to other ministries and government agencies seeking to enforce payments.
- The targeted outcome is to ensure that extractive revenues are available to channel to health and welfare spending
- Key message – progress has been made on contract transparency, in advance of the January 2021 deadline. Contract transparency provides a check on governments who may currently be under pressure to tie in unfavourable deals Contracts between extractive companies and governments are used to define the terms under which production takes place and taxation is levied. This is in instances where these terms differ from statutory and legislative principles or where sector legislation does not exist or provide full coverage. The interpretation and benchmarking of these contracts is not always straightforward. Contractual terms vary between commodities or operations due to the range of potential operating conditions. However, contract transparency allows for the open review of contractual terms and for informed public debate to take place on their merits. Thirty-one countries have published contracts albeit with varying levels of disclosure. Among those that have substantially disclosed contracts are Afghanistan, Chad, Ghana, Guatemala, Guinea, Honduras, Liberia, Malawi, Mexico, Mozambique, Peru, Philippines, Senegal, Sierra Leone, Timor-Leste and the UK. Benefits from contract transparency include improving monitoring and compliance with contractual obligations (Côte d’Ivoire, Liberia), and improving monitoring of impact of the extractive sector on affected communities (Albania, Cameroon, Mali). The EITI Board recently decided that countries will be required to publish oil, gas and mining contracts entered into or amended by 2021.
- Triggered by disclosure requirements, data on transactions between governments, state-owned enterprises and commodity traders are being published. Many countries receive a share in the commodities extracted, either in addition to or in place of tax revenue. These “in-kind” revenues occur when governments opt to receive products instead of cash, or loans in return for assured trades. Governments can then choose to use their resources domestically or to sell them on the international markets, often through commodity traders. These transactions are high value. The average cargo size is around 900,000 barrels, which in the case of crude oil is worth USD 45 million at a price of USD 50 per barrel. These transactions pose a high risk for mismanagement. State-owned enterprises hold a central role in many countries. The role of the state-owned enterprise represented here by a national oil company in the contracting, selling and refining of the state’s share of oil, gas and minerals. Revenues from the sale go to the government. Working together with governments, commodity traders and civil society In 2015, the EITI established a multi-stakeholder Working Group to advise and guide the EITI’s efforts to improve the disclosures on “first trades”. Albania, Cameroon, Chad, Côte d’Ivoire, Ghana, Indonesia, Mauritania and Nigeria participated in a targeted effort to produce new guidance. This was endorsed by companies, civil society groups and governments and included a reporting template allowing for effective collection, interpretation and use of first trade data. Iraq: Highly reliant on oil revenues and increasingly transparent Iraq relies on oil revenues for 95% of government revenues. All oil and gas produced in Iraq belongs to the state with the State Organisation for Marketing of Oil (SOMO) selling crude oil to international buyers. The proceeds of oil sales are transferred to the treasury, and annual government revenues are highly dependent on oil prices, and can vary between USD 40 and 80 billion per year. Since 2011, EITI Reports have provided detailed information on the oil produced from each field, the oil consumed domestically, and the oil sold on the international market. As a result, citizens can monitor how much oil is sold at what price and what proceeds are transferred to the treasury.
- Iraq: Highly reliant on oil revenues and increasingly transparent Iraq relies on oil revenues for 95% of government revenues. All oil and gas produced in Iraq belongs to the state with the State Organisation for Marketing of Oil (SOMO) selling crude oil to international buyers. The proceeds of oil sales are transferred to the treasury, and annual government revenues are highly dependent on oil prices, and can vary between USD 40 and 80 billion per year. Since 2011, EITI Reports have provided detailed information on the oil produced from each field, the oil consumed domestically, and the oil sold on the international market. As a result, citizens can monitor how much oil is sold at what price and what proceeds are transferred to the treasury.
- The National Oil Company Database by the Natural Resource Governance Institute (NRGI) compiles information on the production, revenues and performance of 71 NOCs. Data has been drawn from official public documents, and assembled using a consistent methodology to facilitate cross-cutting analysis and benchmarking of companies.
- ‘Subnational transfers’ include various mechanisms in EITI implementing countries. They can refer to shares of large revenue flows collected at the central level which are then transferred to local government units (Local governments), for instance in Ghana and the Philippines. In other countries, such as Colombia, redistribution or thematic funds are set up, from which subnational governments receive a share. In all of the cases however, there exists a revenue sharing formula which determines the statutory entitlement for each LGU. It usually depends on a series of indicators, such as the extractive sector output by a specific LGU, or its population and size. EITI reporting on subnational transfers of revenues from extractive industries between central and subnational government levels seeks to show whether communities receive the share that revenue sharing mechanisms allocate to them. Disclosures of such transfers can contribute to strengthening the accountability of both central and local governments, by providing disaggregated, timely and reliable data to local communities on their share of extractive sector revenues and allowing them to scrutinise actual transfers and use of revenues. The EITI Standard requires the disclosure of significant transfers between national and subnational government entities when mandated by a national constitution, statute or other revenue sharing mechanism. The statutory revenue sharing formula should be transparent. Any discrepancies between the transfer amount calculated in accordance with the formula and the actual amount that was transferred should be published. The EITI Standard also encourages the reconciliation of subnational transfers to allow stakeholders to verify that the transfers were received at the local level, as well as to disclose and reconcile any material discretionary or ad hoc transfers (EITI Requirement 5.2).
- Strong, transparency and accountable institutions are critical to achieving the UN Sustainable Development Goals. By working towards a commonly agreed set of governance standards, EITI implementing countries can improve how environmental, social and economic risks in the extractive sector are managed, enhancing the sector’s potential to contribute to development. Three ways EITI implementation can help meet the SDGs: 1. Widening the political space for stakeholder participation As a multi-stakeholder coalition that acts both globally and nationally, the EITI plays a critical role in convening debate on the role of extractive industries in development, the challenges inherent in this role, and the solution that can be adopted at a national level. 2. Building accountable and inclusive institutions Underpinning progress towards all other SDGs, Goal 16 (Peace, Justice and Strong Institutions) speaks directly to the EITI’s core purpose of building accountable institutions. Governments are more likely to be effective and credible if they are open to public consultation and oversight. 3. Strengthening domestic resource mobilisation As mobilising domestic resources is the primary mechanism for achieving development goals, improving domestic capacity for revenue collection is critical. The 2019 EITI Standard includes requirements enabling greater scrutiny of extractives revenue payments to subnational bodies.
- At least 30 countries have sought to publicly disclosed some beneficial ownership information through EITI reporting The identity of the real owners, also known as the ‘beneficial owners’, who ultimately own or control the companies that have obtained rights to extract oil, gas and minerals is often unknown, hidden by a chain of unaccountable corporate entities. This problem often feeds corruption, money laundering and tax evasion, as revealed by the Panama Papers in 2016. Public ownership registers established: Ukraine and United Kingdom Legal reforms undertaken to facilitate ownership transparency: Cameroon, Ghana, Indonesia, Kazakhstan, Kyrgyz Republic, Republic of Congo, Ukraine, United Kingdom and Zambia At least 30 countries have sought to publicly disclosed some beneficial ownership information through EITI reporting
- These disclosures revealed important information about the ownership structure of Congo Dongfang International Mining Company, including that two beneficial owners of one of the corporate owners of the company (Tongxiang Huayou Investment Co.Ltd) are married. This means that they should be considered to exercise joint control.
- Project-level reporting – where governments and companies publish information for a specific production unit or license area – allows payments to be compared with the terms set out in laws or contracts governing each project. Without this information, payments associated with specific projects are impossible to distinguish from other projects or activities of a company. Project-level reporting helps: Citizens and governments to assess and scrutinise government receipts and monitor revenues over the life of the project Companies to manage communities’ expectations and show how they contribute to the communities in which they operate, through more transparency in company activities, and better understanding how extractive companies operate. Project-level disclosure is obligatory for reporting covering the 2018 fiscal year. Six countries (Armenia, Indonesia, Philippines, Timor-Leste, Trinidad and Tobago and United Kingdom) currently report by project. Thirty-four more disclose partially, meaning that data was not disaggregated for all projects or revenue streams.