December 21, 2010 - The World Bank’s Oil, Gas and Mining unit is closing the calendar year on a positive note as more resource-rich countries are making important efforts to increase transparency in their revenue management from extractive industries.
This is the case of Ghana and Mongolia, which the Board of the Extractive Industries Transparency Initiative (EITI) designated as 'EITI Compliant' countries at a recent meeting in Dar-es-Salaam, Tanzania. In the same meeting Indonesia and Togo also were admitted as “candidate” countries. The EITI is the global standard for improved transparency in the oil, gas and mining sectors.
In order to achieve “compliant status”, countries must complete a rigorous and independent assessment of their disclosure and reporting practices. Mongolia and Ghana became the fourth and fifth countries to achieve EITI compliance, joining Azerbaijan, Liberia and Timor-Leste.
The Extractive Industries Transparency Initiative (EITI), with the support of a Multi-donor Trust Fund administered by the World Bank’s Oil, Gas and Mining unit (SEGOM), aims to strengthen governance by improving transparency and accountability in the extractives sector. The EITI sets a global standard for companies to publish what they pay and for governments to disclose what they receive.
At the meeting in Dar-es-Salaam on October 19-20, the World Bank not only congratulated Ghana and Mongolia for their efforts, but also encouraged all stakeholders in Tanzania and other candidate countries to maximize efforts to complete the EITI validation process on time and consolidate the principles of good governance and transparency for the sustainable development of their natural resources.
“We applaud Ghana and Mongolia for achieving compliance status. The EITI is a valuable platform that can help the government, companies and civil society to deepen dialogue and engagement towards improving the economic and social benefits from investments in the extractive industries,” said Paulo de Sa, sector manager of the World Bank’s Oil, Gas and Mining unit. “We encourage all stakeholders to maximize efforts toward achieving EITI validation. The World Bank stands ready to support them.”
Some 3.5 billion people live in countries rich in oil, gas and minerals. With good governance the exploitation of these resources can generate large revenues to foster growth and reduce poverty. However when governance is weak, it may result in poverty, corruption, and conflict.
There are now 33 countries that are recognized as either EITI Candidate or Compliant: Afghanistan, Albania, Azerbaijan, Burkina Faso, Cameroon, Central African Republic, Chad, Côte d’Ivoire, Democratic Republic of Congo, Gabon, Ghana, Guinea, Indonesia, Iraq, Kazakhstan, Kyrgyzstan, Liberia, Madagascar, Mali, Mauritania, Mongolia, Mozambique, Niger, Nigeria, Norway, Peru, Republic of the Congo, Sierra Leone, Tanzania, Timor-Leste, Togo, Yemen and Zambia.
Indonesia and Togo
At the Dar-es-Salaam meeting, Indonesia and Togo were admitted as EITI Candidate countries after the EITI Board approved each country’s candidacy application.
In implementing the EITI, the governments of Indonesia and Togo commit to disclose all taxes, royalties and fees they have received from the oil, gas and mining sectors. Companies operating in these sectors will publish what they have paid to the governments. These figures will be reconciled by an independent reconciler, in a process overseen by representatives from government, industry and civil society organizations. Indonesia and Togo join 28 other candidate countries that are working toward this goal.
The EITI Board also decided to recognize Cameroon, Gabon, Kyrgyzstan and Nigeria as Candidate countries that are “close to compliance”. These countries have completed EITI Validation, and the Board congratulated the government, companies and civil society organizations for the progress made in implementing the EITI.
Contributed by Mauricio O. Ríos (SEGOM)