Post on 19-Mar-2016
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Extractive Industries Transparency Initiative (EITI)
GBS Annual ReviewKey Issue 4 – Challenges in Combating
CorruptionDar Es Salaam
November 26, 2008
Implementing EITI in Tanzania:The Pathway Ahead and Key Challenges
(including role of EITI Multi-donor Trust Fund)
Presentation by Vedasto Rwechungura
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Overview of Presentation - EITI in Tanzania
Recap of the purpose of this presentationTo inform participants in the Annual Review exercise
what the EITI concept is, its status in Tanzania, the process of assisting Tanzania to adopt and implement EITI principles and the role of the World Bank and other interested DPs in the process.
Why EITI? The EITI architecture globally
EITI process and criteria – and benefits to countries
Emerging results from EITI in other countries
Over the medium-term: “Beyond EITI …….”
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Underlying issue that EITI seeks to address: “managing natural resources sustainably”
Although Tanzania is not yet mineral-dependent, given the global experience of resource-rich countries, it is important to lay the foundation early for transparency and good governance in the sector
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Good governance can help mitigate the “resource curse” ….
Good governance has multiple features: Clear and stable laws and regulations Rule of law High level of capacity and skills in government Fiscal monetary and budget discipline Even and consistent application of laws and fiscal regimes to all Open dialogue between government and civil society Public sector/private sector balance Transparency
Transparency and good sector governance in the context of Tanzania policy goals
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The Multi-Stakeholder EITI Streering Group/Committee
National EITI Secretariat(to manage day-to-day EITI work)
The Government
Civil Society Companies
EITI – a global standard locally implemented to meet national goals
and requirements
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EITI Global Structure – EITI Board
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Sign up
Dissemination
Country undertakes external validation
Disclosure
Preparation
Validation is the end-objective for an EITI country
The EITI Process ..... in a nutshell(EITI partners’ goal is to help an EITI country to implement the EITI cycle)
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The EITI Process - part of a bigger picture
Award of licenses
&contracts
Regulation&
monitoring of operations
The EITI provides a forum for dialogue and a platform for broader reforms
RevenueDistribution
& Management
Implementation of Sustainable Development
Policies
Government Spending
Companies Disclose
Payments
Government Discloses Receipt
of Payments
Oversight by a Multi-Stakeholder Group
Independent Verification of Tax & Royalty
Payments
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Reconciler / Auditor
National StakeholderGroup (Government,
Companies, Civil Society)
All EI companies complete
individual data reporting templates
(and provide information as
required to Audit firm)
Govt agencies provide data
(and information as required)
-- produces EITI Report for Stakeholder Group
Data from
Companies
Data from
Govt agencies
-- investigates / getsmore data to reconcile any discrepancies
EITI Report to
public
Essence of EITI is disclosure – based on decisions of EITI scope taken by national
EITI stakeholder groups
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…. At country level: EITI Board has approved 23 countries as “EITI candidate” – 16 in Africa Of these, 10 have published one or more EITI Reports to date (Sept 2008) (Azerbaijan, Cameroon, Gabon, Ghana, Guinea, Mauritania, Mongolia,
Nigeria, Kazakhstan, Kyrgyz Republic) Norway is first among developed countries to announce EITI adoption Countries are able to align national goals with global EITI standard
…… Globally: Now established as the standard on transparency in resource areas with
consensus on EITI principles, objectives, criteria International EITI architecture fully in place (EITI Secretariat, Oslo) Range of supporting companies; civil society; agencies like World Bank,
African Development Bank, etc.
EITI has achieved strong momentum at national level
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What the EITI International Secretariat does
Overall oversight of EITI and policies globally candidacy process validation process (EITI compliance
Provide guidance on methodology
Provide advice on best practice
Link up an implementing country with other implementing countries and organisations
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What World Bank and EITI Multi-donor Trust Fund (MDTF) does to support EITI
implementation At country level, World Bank managed MDTF (and all partners) help to:
build 3-way consensus for EITI - at start of process and throughoutbuild multi-stakeholder structures to design and manage EITI provide technical and financial support for EITI implementationensure EITI process lead to EITI “compliant” status (validation)
At global level, World Bank managed MDTF activities designed to: support global EITI movementproactive knowledge dissemination and best practice sharingproactive support for sub-regional EITI collaboration and training
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Clear signal to all stakeholders and investors on national commitment to transparency
Membership of a well-known global standard … while also
Building collaboration and trust among government companies and civil society on mining / oil issues in Tanzania.
Brings together data on mining/oil financial flows in one place
Possibility for improving sovereign and corporate ratings, and hence foreign and domestic investment through lower risks
Benefits of adopting EITI as seen by countries
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In some cases, EITI has yielded additional revenues from extractive industry (from revisiting past corporate tax payments)
Possibility to expand to anti-corruption focus in oil gas and mining (although EITI is not a direct anti-corruption instrument)
Diagnostic for assessing effectiveness of EI revenue collection Platform for moving to wider governance reforms beyond EITI
BUT … EITI is not cost-free to governments. Needs:clear and sustained political commitment at senior level
assigned staff to the EITI effort – with the needed resources
budget funding for EITI process – especially EITI validation
Benefits of adopting EITI as seen by countries
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“Beyond EITI”: EITI Criteria is about a minimum standard - which does not aim to
cover everything
EITI CRITERIA Independent reconciliation /
audit of payments made and revenues received.
Publication and widespread dissemination of results.
Comprehensive coverage, i.e. all companies including state-owned and local companies.
Full engagement of civil society in the process.
Public, financially sustainable, time-bound plan of implementation.
BUT - WHAT ABOUT: Transparency of licensing? Were “fair” terms and conditions
negotiated? Are long-term revenue and
benefits for country optimal? What companies pay vs. what
they should pay? Revenue allocation e.g. to sub-
national level and communities Environment / social linkages?
… and the whole of the “expenditure side” (not in EITI)
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Licencing and Awarding
of Contracts
Monitoring of
Operations – compliance
Collection of Taxes- and Royalties
Distribution of
Revenues(and
spending side)
Utilization in Sustainable Projects –
social and environ.
EITI processEITI process• EITI is a key goal in itself – but is also a first step towards a broader extractive industry (EI) governance reform and sound EI management
“Beyond EITI”: EITI is narrowly-focused yet provides platform for further reforms and
good EI governance
• Beyond EITI, countries are seeking support on governance over the entire resource cycle (the “++” agenda) -- this is distinct from EITI
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Thank you!For information on EITI globally visit the website:
www.eitransparency.org
World Bank contact:Vedasto Rwechungura
World Bank Dar Es Salaam Office vrwechungura1@worldbank.org
Extractive Industries Transparency Initiative