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EITI Board meets in Mexico (Day 2)

Snapshot of the topics under discussion during day 2 of the EITI Board Meeting in Mexico City.

This is the second of two blogs that provides highlights from the EITI Board and other meetings concluded today in Mexico City. It should in no way be seen as minutes of the various meetings, but simply gives a snapshot of the many interesting discussions.

Newest EITI country

Two years ago Dr Zaw Oo, like most Burmese, had not even heard of the EITI.  Now he is the National Coordinator of the latest (and 45th) implementing country.  EITI Chair, Clare Short, was moved when she attended the first MSG meeting in Yangon last year and saw members of government and civil society sit down together for the first time in 60 years. This group expressed concerns about the challenges of awareness and engagement across the whole country and the on-going engagement with civil society.  There has also been much discussion recently about the transparency of the beneficial ownership of the winning companies in the recent oil and gas licensing round.  These elements are reflected in the country’s EITI workplan.  Clare summed up the thoughts of many when she concluded that  “it is not perfect, but something exciting is going on”, before welcoming Myanmar in the EITI family.  

Achieving compliance with EITI Requirements

Guinea’s progress with the EITI has been difficult.  With two thirds of the world’s bauxite reserves and massive iron ore, gold and diamonds, Guinea’s mineral riches should be driving economic growth and prosperity.  However, the mining sector contributed a modest 17% of already modest government revenues in 2012.  After two years of suspension due to political instability, the democratically elected President Alpha Condé sees the EITI as a tool for implementing and monitoring some of these reforms.  Today’s Board decision that Guinea is the 28th country compliant with the EITI Requirements marks a key milestone in using the EITI as a platform for improved governance in the EITI.

Yesterday’s discussion about the Democratic Republic of Congo was a stark reminder both of how important and how challenging implementing the EITI is in a country like the DRC.  Ali Idrissa, Board member from Nigerien civil society, said that they have moved from the catastrophic situation that prevailed a year ago at the time of the Board decision to suspend the country to making enormous progress in a very short period.  Possibly no other country has had to overcome bigger challenges in the implementation journey.  However, that was put aside in the technical discussion about whether or not the country had met the Standard.  The Board recognised the newly found transparency and information related to beneficial ownership and state-owned enterprises.  They were impressed by the explanation in the supplementary DRC report on the Sicomines agreement, which is arguably one of the most complex contractual agreements in the mining sector in the world. Congolese citizens can now see a detailed reporting on infrastructure projects to build roads and schools worth half a billion US dollars as part of this barter agreement. They can finally discuss the agreement freely and hold the parties to the agreement (the Chinese state owned companies - CREG and Cohydro - and the Congolese state owned company - Gecamines) accountable. Again, in a country like DRC, the EITI alone is not likely to be able address all the challenges of the sector, but the Board was emphatic in welcoming the country as the 29th full member. 

What have you done with the money?

Faith Nwadishi briefed the Board on the recent Nigerian EITI Report (2007-2011) – the so-called Fiscal Allocation and Statutory Disbursement Audit - covering the transfer of all oil-related payments from central government to the state governments, agencies and local government, and how they then spend them.  This aims to address the issue that most interests the average Nigerian citizen: “What have you done with the money?”. This report allows debate and accountability in a formerly opaque area of governance.  She gave the example of oil  companies being required to provide funding to an education fund, yet education remains underfunded.  Through this report, citizens are seeing that many universities and colleges are facing challenges in accessing these funds because they are not able to meet the transparency and accountability requirements of that fund.  She emphasised that this was the first such report of this type in the EITI universe.

In light of this and the decisions on Guinea and the DRC, Faith said, “Congratulations Africa! For us Africans, we now have information we never had before.  And we can now take our own decisions about our own resources”. 

Post-Board meeting activities

Following the Board meeting, the World Bank hosted a meeting of the EITI trust fund management committee. Amongst the issues discussed was the joint EITI evaluation that is now being conducted, reviewing current support to the EITI implementing countries. 

A Board delegation travelled to the headquarters of the Mexican state-owned oil company Pemex to meet members of management. The company reported on the current reforms and the implications for Pemex. One of the biggest challenges identified within the company was to change the corporate culture, as it seeks to become more efficient and competitive. Pemex’s strong support for the EITI was reiterated. The company also spoke about the importance of being open and transparent as a way of building trust with Mexican stakeholders. 

A quick reflection

Myanmar, Guinea, DRC and Nigeria are in many ways the quintessential EITI countries.  They face enormous challenges in managing complex and large extractive sectors.  They have all chosen to use the EITI as an instrument for reform and have all tailored the process  to their national circumstances and embraced it at the highest levels.  EITI Candidature and even Compliance, is not the full journey for these countries, but what the Board has heard today shows unequivocally their determination to go beyond these milestones.  I am sure that I speak for the whole EITI family when I say that we are at their service in making the process as useful as possible.