Publisher: 
EITI
Published Date: 
June, 2018

The EITI Board agreed that Cameroon has made meaningful progress in implementing the 2016 EITI Standard.

Date: 29.06.2018

Reference: 2018-32/BM-40/BP-40-6-A

Description: see below for the decision in full. PDF attached at bottom of the page. 

Where: 40th Board meeting in Berlin, Germany

Based onRequirement 8.3 EITI Validation deadlines and consequences

Reference documents

Keywords: Validation; Cameroon

Go to Board decisions overview

Decision in full

Following the conclusion of Cameroon’s Validation, the EITI Board decided that Cameroon has made meaningful progress overall in implementing the EITI Standard.

The Board congratulated the Government of Cameroon and Multi-Stakeholder Group (MSG) on the progress made in improving transparency and accountability in the extractive industries by providing a trusted source of data to inform public debate. The Board welcomes the EITI’s impact in gradually enticing government agencies towards routine disclosures, evidenced by more regular publications by the national oil company, the Société Nationale des Hydrocarbures (SNH). The Board notes reforms spurred by EITI in the mining sector, ranging from the launch of an online mining cadastral portal to a new Mining Code in 2016 enshrining transparency requirements. The Board encourages similar efforts to enshrine transparency requirements in the new Petroleum code, including provisions related to beneficial ownership disclosure. In its ten years of EITI reporting, Cameroon has expanded the scope of EITI reporting to include the oil transportation sector, particularly revenues from the Chad-Cameroon pipeline. The Board recognises Cameroon’s efforts to go beyond the requirements of the EITI Standard in its coverage of export data, including artisanal mining, and social expenditures.

The lack of clarity on the payment of per diems for EITI activities raises concerns about the integrity of the MSG’s oversight that need to be addressed, particularly given stakeholder concerns over potential conflicts of interest caused by the per diems practice.

In taking its decision, the Board took special note of efforts by the national oil company, the SNH, to ensure regular disclosure of information on the oil and gas sector, includes oil sales, to its citizens through its corporate website, even if accessibility could be improved.

The Board has determined that Cameroon will have 18 months, i.e. until 29 December 2019 before a second Validation to carry out corrective actions regarding civil society engagement (1.3), MSG governance (1.4), work plan (1.5), license register (2.3), policy on contract transparency (2.4), state-participation (2.6), production data (3.2), in-kind revenues (4.2), SOE transactions (4.5), distribution of revenues (5.1), subnational transfers (5.2), SOE quasi-fiscal expenditures (6.2), public debate (7.1) and documentation of impact (#7.4), Failure to achieve meaningful progress with considerable improvements across several individual requirements in the second Validation will result in suspension in accordance with the EITI Standard. In accordance with the EITI Standard, Cameroon’s MSG may request an extension of this timeframe,or request that Validation commences earlier than scheduled.

The Board’s decision followed a Validation that commenced on 1 July 2017. In accordance with the 2016 EITI Standard, an initial assessment was undertaken by the International Secretariat. The findings were reviewed by an Independent Validator, who submitted a draft Validation report to the MSG for comment. The MSG’s comments on the report were taken into consideration by the independent Validator in finalising the Validation report and the independent Validator responded to the MSG’s comments. The final decision was taken by the EITI Board.

In taking this decision, the Board welcomed Cameroon's efforts to implement the corrective measures identified during the Validation process. The information published after the start of the Validation has not been taken into account in this evaluation.

Recommendations

The EITI Board agreed the following corrective actions to be undertaken by Cameroon. Progress in addressing these corrective actions will be assessed in a second Validation commencing on 29 December 2019:

  1. In accordance with Requirement 1.3.a, civil society must be fully, actively and effectively engaged in the EITI process. To strengthen implementation, the civil society constituency should address the concerns regarding constituency representation, including potential conflicts of interest linked to per diems (see Requirement 1.4) and ensure more effective liaison between the CSO representatives and the broader constituency. The civil society constituency may wish to consider undertaking a capacity needs assessment and formulating actions to address capacity constraints. In accordance with requirement 8.3.c.i, the civil society constituency should develop and disclose an action plan for addressing the deficiencies in civil society engagement documented in the initial assessment and Validator’s report within three months of the Board’s decision, i.e. by 29 September 2018.
     
  2. In accordance with Requirement 1.4, the MSG should update its internal governance rules to cover all provisions of Requirement 1.4.b and publish procedures for nominating and changing MSG representatives, including the duration of mandates. In accordance with Requirement 1.4.b.vi, the MSG must clarify the practice of per diems for attending EITI meetings or other payments to MSG members to ensure that there is no conflict of interest. The MSG may wish to consider keeping public attendance records and posting MSG minutes online. The industry constituency may wish to consider establishing constituency guidelines and mechanisms to ensure coordination of mining, oil and gas companies as a constituency. The MSG may also wish to increase their engagement with Douala-based companies to ensure that their views are taken into account and that they are aware of the work of the MSG and the achievements of EITI Cameroon. The industry constituency could consider liaising with CCIMA or GICAM to ensure that the views and interests of quarries and artisanal and small-scale mining are better represented on the MSG, considering the important public interest on this sub-sector. The civil society constituency may wish to take steps towards broad and full civil society participation. This could be achieved by adopting a constituency-wide code of conduct, which could serve as a basis to set out a process for civil society nominations to the MSG and to clarify the roles and responsibilities of CSO representatives on the MSG and the Technical Secretariat.
     
  3. In accordance with requirement 1.5, the MSG should agreea work plan that is linked to national priorities and is revisited annually to take account of changing conditions and opportunities. Clearer links to national discussions and priorities will encourage more relevance of EITI information to popular demand and could help mobilise additional resources.
  4. In accordance with Requirement 2.3, Cameroon is required to maintain a publicly available register or cadastre system(s) with timely and comprehensive information regarding each of the licenses pertaining to oil and gas companies. In the absence of a public registerthe MSG should ensure that dates of application and license coordinates are disclosed for all licenses held by material companies.
     
  5. In accordance with Requirement 2.4, Cameroon should ensure that the government’s policy on contract disclosure is clear and public, rather than commenting on the existence of specific contractual terms hindering the disclosure of contracts, and comment on actualpractice of contract disclosure in the mining, oil and gas sectors.
     
  6. In accordance with Requirement 2.6, Cameroon should ensure that there is a publicly-available comprehensive list of extractives companies in which the government, or any SOE, holds equity and the specific level of government ownership (and any change in the year under review). It should also work with government stakeholders to clarify the rules and practice related to the financial relationship between SOEs such as the SNH and its subsidiaries and the government as well as the existence of any loans or loan guarantees from the state or any SOE to companies operating in the mining, oil and gas sectors. The MSG may wish to integrate its approach to addressing this corrective action with (Section C) Article 23 of its July 2017 IMF extended credit facility agreement related to the SNH.
     
  7. In accordance with Requirement 3.2, Cameroon should ensure that the production value of each mineral commodity (particularly natural gas) produced in the year(s) under review is publicly available. The MSG may also wish to explore opportunities for publishing volumes, values and pricing data in a routine manner online, drawing on data from MINMIDT, CAPAM and SNH. 
     
  8. In accordance with Requirement 4.2, Cameroon should ensure that information on volumes collected as the state’s in-kind revenues, volumes sold and related revenues bepublicly accessible and disaggregated by buyerfor both oil, gas, condensate and gold received as the state’s in-kind revenue.
  9. In accordance with Requirement 4.5, Cameroon must ensure that the role of SOEs, including transfers between SOEs and other government agencies, is comprehensively and publicly addressed. The MSG may wish to consider working with the Treasury and SNH to publish information on SNH’s sovereign advances to other government entities in a routine manner.
     
  10. In accordance with Requirement 5.1, Cameroon should ensure that there is a clear public indication of which extractive industry revenues, whether cash or in-kind, are recorded in the national budget and clarify the allocation of revenues not recorded in the national budget, providing links to relevant financial reports as applicable. The MSG may wish to explore opportunities together with the Treasury and IMF to use annual disclosures as a diagnostic tool for assessing the efficiency of SNH sovereign advances in relation to normal budgetary spending.
     
  11. In accordance with Requirement 5.2, Cameroon should undertake a more explicit assessment of the materiality of subnational transfers prior to data collection and ensure that the specific formula for calculating transfers to individual local governments be disclosed, to support an assessment of discrepancies between budgeted and executed subnational transfers. Given the high level of public interest in this issue, the MSG may wish to consider including extractives-hosting local government (communes) in the reporting process for subnational transfers in order to reconcile these transactions.
     
  12. In accordance with Requirement 6.2, Cameroon should consider the existence and materiality of any quasi-fiscal expenditures undertaken by extractives SOEs and their subsidiaries, ensuring that all material quasi-fiscal expenditures are publicly disclosed.
     
  13. In accordance with Requirement 7.1.e, Cameroon should ensure that outreach events, whether organised by government, civil society or companies, are undertaken to spread awareness of and facilitate dialogue about the EITI Report across the country. The MSG is encouraged to pursue its work in outreach and dissemination through a communication strategy, involving all three constituencies. The MSG might wish to foster public debate on the oil and gas sector through the use of specific data points and by building on its existing networks.
  14. In accordance with Requirement 7.4.a.iii, Cameroon should ensure that the APR includes an overview of the MSG’s responses to and progress made in addressing the recommendations from reconciliation and Validation. Cameroon is required to list each recommendation and the corresponding activities that have been undertaken to address the recommendations and the level of progress in implementing each recommendation. Where the government or the MSG has decided not to implement a recommendation, it is requirementthat the MSG documents the rationale in the APR. In accordance with Requirement 7.4.a.iv, the MSG should include an assessment of progress with achieving the objectives set out in its work plan, including the impact and outcomes of the stated objectives. To strengthen implementation, Cameroon is encouraged to provide a comprehensive overview of the impact of the implementation of the EITI in the APR. Cameroon might also withto conduct a formalised impact assessment after twelve years of implementing the EITI.

The government and the MSG are encouraged to consider the other recommendations in the Validator’s Report and the International Secretariat’s initial assessment, and to document the MSG’s responses to these recommendations in the next annual progress report.