Ghana's Extractive industry transparency initiative

1. OFORI KWASI JULIUS
ABASONTEY VICTORIA

2.  Introduction
 The Initiative
 Rational behind EITI
 Early Beginnings
 Stakeholders in EITI
 Why is it a Governance instrument
 Ghana’s EITI program
 GHEITI Objectives
 Successes
 Challenges
 Recommendations
 Conclusion

3. INTRODUCTION
 A country’s natural resources, such as oil, gas, metals
and minerals, belong to its citizens.
 Extraction of these resources can lead to economic
growth and social development.
 However, poor natural resource governance has often
led to corruption and conflict.
 The EITI is a global standard to promote transparent
and accountable management of natural resources.

4.  EITI is an international standard for openness around
the management of revenues from natural resources.
 Designed to improve accountability and public trust for
the revenues paid and received for a country’s oil, gas
and mineral resources.
 It asks companies to publish what they pay for oil, gas,
quarrying and mining, governments to disclose what
they receive from oil, gas, quarrying and mining.

5.  EITI emerged as a brainchild of the United Nations
World Summit on Sustainable Development (WSSD) in
Johannesburg, in 2002.
 Initially focused on extractive sector revenue
transparency, and operated on the assumption that when
citizens receive information on the payments
companies make to governments, they will be able to
demand accountability and better use of the revenues.

6.  In 2013, at the 6th EITI Global Conference in Sydney,
Australia, the initiative’s requirements were varied, and
replaced with what is now the EITI Standard.
 The scope expanded beyond just revenues, to the other
links in the industry value-chain, with a view to
addressing some of the critical governance challenges
in the extractive sector, (Javier Aguila, 2011).

7.  Fundamental rationale behind EITI is to increase
transparency and knowledge of revenues from the
extractive industries.
 This will empower citizens and institutions to hold
governments accountable.
 It is also an effective way of strengthening EITI local
ownership among stakeholders, (Javier Aguila, 2011).

8.  The initiative aims at increasing transparency in any
transaction between governments of mineral rich
countries and companies operating in the country.
 EITI aims to give citizens and institutions access to
better information to enable them to hold governments
to account for how these payments are spent.

9.  In the late 1990s and early 2000s, there was an
expanding library of academic literature around the
“resource curse” by some acolytes.
 Detailing how the huge potential benefits of oil, gas
and mining were not being realized and were associated
with increased poverty, conflict and corruption.
 Other common effects were around capturing the
revenues by elites, stunting the development of tax
systems to capture revenue from non-extractive sectors.

10.  These writings outlined out the complexities of
extractive resource governance.
 However, the literature was clear – transparency and
dialogue had to be part of the starting point, (EITI,
2016).
 These academic analysis were followed by more and
more journalistic pieces and a growing campaign by
Global Witness, Human Rights Watch, Oxfam America,
other civil society organizations.

11.  International financier George Soros established a
“Revenue Watch” Programme under his Open Society
Initiative to investigate the flow of funds from oil
companies to governments in the Caspian region.
 The civil society campaign slogan of “Publish What
You Pay” (PWYP) was drawn from a Global Witness
report, “A Crude Awakening”. Launched in December
1999.
 It focused on the opaque mismanagement of oil in
Angola.

12.  The report concluded by calling on the operating
companies to adopt “a policy of full transparency in
Angola and in other countries with similar problems of
lack of transparency and government accountability”.
 Responding to the campaign in February 2001, oil
behemoth BP published the signature bonus of USD
111 million it paid to the Angolan government for an
offshore license.

13.  This sparked a strong reaction from Angola
 Backlash and threats from the Angola government, led
Lord Browne to conclude “clearly a unilateral
approach, where one company or one country was
under pressure to ‘publish what you pay’ was not
workable”.
 The Government of the United Kingdom was listening
both to the PWYP campaign and to the oil companies.

14.  They saw the opportunity to develop an initiative built
on the notion of equal transparency from the governments
and the companies.

15.  Government or public institutions
 Private sector
 Civil society
 Organisations contracted to support an EITI process
 International partners

16.  One of the governance tools aimed at reducing poverty
among natural resource rich countries by improving
accountability and transparency in the payments and
receipts of natural resource revenues.
 EITI adopts a participatory approach to decision
making as it is a multi-stakeholder initiative.
 The publication of its reports ensures effective
information sharing and accessibility.

17.  Ghana signed on to the EITI in 2003.
 GHEITI has been one of the pioneer countries in
implementing the initiative in the mining sector.
 Ghana was the first EITI country to deal with the
mining sector, as the other early candidate countries
were focused on the oil and gas sector.
 Ghana was also the first country to extend EITI to a
sub-national level.

18.  In 2010, with the 2007 discovery of commercially
viable oil and gas resources, the country extended its
reporting also to this sector.
 Ghana has participated fully in all EITI activities both
regionally and internationally.
 The instrument used for verifying company payments
and government receipts are the annual reconciliation
reports, (RRs).

19.  GHEITI has produced nine such reports over the years,
covering mining revenues from 2004 through 2011.
 These reports are disseminated and discussed across the
country, including in regional and community based
forums.
 The main objective of the Ghana EITI is to carry out an
independent audit of Ghana’s extractive industry.

20.  It is also to develop and implement a revenue
disclosure, oversight and publication mechanism that
ensures that Ghanaians get all relevant information on
the extractive industry’s revenue and expenditure to
enable them hold government accountable.

21.  Enhance the demand-side of social accountability by
providing public insight into revenues derived from the
exploitation of the country's mineral resources.
 Create the platform for public debate on the spending
efficiency of extractive sector revenues.
 Guarantee the sustainability of Ghana's EITI by
backing it with legislation.

22.  Enhance the communication efficiency of GHEITI and
ensure that mineral revenue / expenditure information
are provided in a timely manner, and in an accessible
and comprehensible format.

23.  Ghana has been acclaimed an exemplary implementer
of the EITI and honored for its strict implementation
of the recommendations of the Ghana EITI
(GHEITI).
 Ghana was among four countries selected from 49
EITI implementing countries for the prestigious EITI
Chair’s award, at the 7th Global EITI Conference in
Lima, Peru.
 GHEITI has resulted in significant improvement in
incomes of land owners on whose land the mineral
resources are exploited.

24.  Lapses or institutional weaknesses in dealing with
revenue management in the extractive sector.
 Challenge of regular monitoring of royalty payments
from the central government to District Assemblies at
the sub-national level.
 Capacity gaps.
 Difficulty in accessing contracts / data.

25. Need for research to ascertain its
impact on reducing corruption and
other drivers of the resource curse.
The need to ascertain its contribution
to economic development in
implementing countries.
Efforts must be channelled towards
sensitizing citizens about the EITI
and the opportunity it presents.

26. To achieve maximum results, there is
the need to create awareness and
develop the capacity of the Ghanaian
citizenry to demand more
accountability, especially with
regards to the use of mining revenue.

27.  citifmonline. (2016, Febrary 27). citifn online.
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Subnational Level. Washington, D.C.: The World Bank .
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Energy and Industrial Strategy. Retrieved november 2, 2016,
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30. THANK
YOU