Iraq and Tanzania declared 'EITI Compliant'

The EITI Board today (12 December) declared Iraq and Tanzania 'Compliant' with the EITI Standard. There are now 18 countries that are 'EITI Compliant'. EITI compliance means that the country has an effective process for annual disclosure and reconciliation of all revenues from its extractive sector. This allows citizens to see how much their country receives from oil, gas and mining companies.

With approximately 10% of the world’s proven oil reserves and 2% of the natural gas reserves, Iraq becomes the largest EITI compliant country by oil and gas reserves in the world.   It now produces around 3 million barrels every day with production expected to expand rapidly.  The industry in Iraq is completely state-owned with the state-owned companies selling crude to accredited international companies.  There are also eleven international Technical Service Contracts (TSCs). The semi-autonomous Kurdish Regional Government (KRG) has a number of production sharing agreements.  The 2009 Iraq EITI report showed that the government had received $41billion in revenue for oil and gas exports.  The 2010 Iraq report is due out by the end of the year.

EITI Chair Clare Short commended Iraq for its achievement saying "The Iraqi people have not had the benefits that should have flowed to them from their rich oil resources.  Compliance with the EITI is a step towards helping to ensure ensuring that the resources will be better managed in the future.  I congratulate Iraq on this excellent achievement." The decision of the Board on the EITI status of Iraq is given below in full.

Gold accounts for 90% of the value of Tanzania’s mineral exports. In the past few years, there has been a big increase in exploration for gas and petroleum along the coast with estimates suggesting that the gas sector could soon transform the economy. 

Clare Short said "This is an ideal time for Tanzania to achieve EITI compliance.  It means that Tanzanians have committed to be transparent and have an open dialogue about how the country manages its potentially significant new resources. I congratulate Tanzania on this excellent achievement." The decision of the Board on the EITI status of Tanzania is given below in full.

Text of Board decision: Iraq

The EITI Board designates Iraq as EITI Compliant as of 12 December 2012. In recognition of the issues emerging from the 2009 EITI report and validation process, the Board will write to the Iraq MSG to congratulate the government of Iraq and the Iraq EITI Council for their sustained commitment and leadership of the EITI process, and to remind them that:

1.       In accordance with the EITI Rules, Iraq is required to include all material revenue payments in their EITI reporting (requirement 9). To this end, the Board requires the inclusion of oil and gas production in the Kurdistan Region and sales revenue to the Kurdish Regional Government to be addressed in the 2010 EITI report.

2.       The Board noted the importance of setting a reasonable materiality threshold to ensure that the EITI reports are comprehensive. To this end, the Board called on the MSG to work toward reducing the materiality threshold for the 2011 and subsequent reports.

3.       The EITI Rules also require that civil society is fully, independently, actively and effectively engaged in the EITI progress (Requirement 6). Significant concerns have been expressed in the validation report and from some stakeholders about the engagement of civil society. With this in mind and mindful of the challenges in Iraq, the Board will take a close interest in the proposed process for selection of the new IEITI MSG and onward engagement of civil society. 

Furthermore, the International Secretariat will conduct a thorough analysis of the forthcoming2010 EITI Report, with a particular focus on the above issues and report to the Board through the Implementation Progress Report.

In accordance with the EITI Rules:

•        Iraq must be revalidated within 5 years (i.e. 12 December 2017). The MSG is advised that the Board is currently reviewing the validation procedures, including proposals relating to timing for revalidation of compliant countries. Accordingly this deadline may be modified;

•        Stakeholders in the process may call for a new validation at any time within that period if they think the process needs reviewing;

•        Where valid concerns exist that a country has become EITI Compliant, but its implementation of the EITI has subsequently fallen below the standard required for Compliance, then the Board reserves the right to require the country to undergo a new validation or face

delisting from the EITI;

•        In accordance with the 2011 edition of the EITI Rules, Iraq is required to produce EITI reports annually. EITI Reports should cover data no older than the second to last complete accounting period (i.e., Compliant countries must publish an EITI report by 31 December 2012 to

meet the requirement for timely reporting); and

  • In accordance with requirement 21(c), Iraq is required to publish a public report annually on the previous year’s activities, detailing progress in implementing the EITI and any recommendations from the validator.

Text of Board decision: Tanzania

The EITI Board designates Tanzania as EITI Compliant as of 12 December 2012. In accordance with the EITI Rules:

•        Tanzania must be revalidated within 5 years (i.e., by 12 December 2017). The MSG is advised that the Board is currently reviewing the validation procedures, including proposals relating to timing for revalidation of compliant countries. Accordingly this deadline may be modified;

•        Stakeholders in the process may call for a new validation at any time within that period if they think the process needs reviewing;

•        Where valid concerns exist that a country has become EITI Compliant, but its implementation of the EITI has subsequently fallen below the standard required for Compliance, then the Board reserves the right to require the country to undergo a new validation or face delisting from the EITI;

•        In accordance with the 2011 edition of the EITI Rules, Tanzania is required to produce EITI reports annually. EITI Reports should cover data no older than the second to last complete accounting period (e.g. an EITI Report published in calendar/financial year 2013 should be based on data no later than calendar/financial year 2011); and

•        In accordance with requirement 21(c), Tanzania is required to publish a public report annually on the previous year’s activities, detailing progress in implementing the EITI and any recommendations from the validator.

The Board congratulates the government of Tanzania for its sustained commitment and leadership of the EITI process. The Board also congratulates the Tanzania MSG for its efforts and effective leadership in EITI implementation. The Board calls on the government and multi-stakeholder working group to ensure that the Board’s recommendations are implemented in full, and tasks the EITI International Secretariat with providing regular progress reports to the EITI Board.

 

For further information about EITI in Iraq or Tanzania, please see the country pages on the EITI website or contact EITI Deputy Head Eddie Rich.

 

Twitter icon
Facebook icon