Southeast Asia warming up to the EITI

ASEAN countries are realising transparency is good for economic development.

As a major producer of oil and gas and a heavyweight in mining, Indonesia knows the many challenges that come with natural resource wealth. Indonesia was the first member of Association of Southeast Asian Nations (ASEAN) to join the EITI. Recently we started seeing that more and more countries are awakening to the realisation that transparency is good for economic development and a cornerstone of democracy.

The EITI is good for the investment climate of ASEAN countries and a key to the possible establishment of an ASEAN Economic Community. We have been actively working to bring this message to ASEAN nations.

Indonesia is putting EITI on ASEAN's agenda

This started when deliberate efforts were made by Indonesia to bring EITI to ASEAN discussions as a part of its Chairmanship of ASEAN in 2011, all in the context of a regional strategy towards energy and economic security.

As a part of that effort, I took part in the Indonesian delegation at the 29th ASEAN Ministers of Energy Meeting (AMEM) in Brunei last September 2011, where Indonesia presented the concept of EITI and its implementation. Indonesia argued that transparency of natural resource revenues is beneficial to the investment climate and key to the possible establishment, in 2015, of an ASEAN Economic Community.

In December 2011, I attended the ASEAN Ministers of Mining (AMMin) meeting in Hanoi, . During the discussions, a decision was taken to build capacity of AMMin in the area of EITI. This formal effort is ongoing and outlives Indonesia’s Chairmanship of ASEAN.

In 2012, a Government of Indonesia-CSO-industry multi-stakeholder group was formed under the auspices of a decree of the Coordinating Ministry of the Economic Affairs to continue to take EITI to ASEAN. This working group has decided to organize an AMMin workshop in Surakarta (Solo) on the island of Java, in October 2012. The purpose of the workshop is to build the capacity of ASEAN mining ministry officials with regard to EITI. Mining ministries from all ASEAN states will be invited.

The Solo meeting will help add momentum to a process already underway, of ASEAN states making public commitments to implement the EITI.

Vietnam, Myanmar, Philippines: closer to improve transparency through EITI

As part of Vietnam’s efforts toward improved corporate governance and transparency, I was invited in July 2012, along with Revenue Watch Institute, by Vietnamese civil society organiations working with the Government, National Assembly, Vietnamese Chamber of Commerce and Industry and others, to explain the Extractive Industries Transparency Initiative (EITI) to key actors of the Government and other stakeholders in Hanoi.

I told officials in Vietnam that transparency is an important tool for preventing corruption, that it is a pillar of accountability, and that it is good for everyone, because it solves conflicts and improves governance. I am happy to report that they were receptive to the concept and that the Ministry of Industry and Trade is currently initiating its own feasibility study about EITI in Vietnam.

In mid-July 2012, the EITI International Secretariat met with the Government of Myanmar. In the aftermath of that meeting, Myanmar’s Minister of Industry reaffirmed Myanmar’s intention to implement the EITI, and has put the Myanmar Development Research Institute in charge of EITI implementation.

The Republic of the Philippines has just promulgated an Executive Order on Mining, which includes an unequivocal statement of the government’s intention to implement the EITI.

Indonesia soon to publish payments in first ever EITI Report

It is heartening to see so many ASEAN states making steps to join the EITI process, encouraged and supported by civil society organizations, as well as extractive industry. But I am also happy to see that Indonesia continues to be out in front of all other ASEAN states, blazing the trail. In December 2012, we plan to publish and widely distribute our first EITI Report.

The report will raise the bar for EITI globally, and will be the world’s first to expose each link in the chain along which oil and gas produced by companies are surrendered to the state, and then monetized. It will also make public for the first time in Indonesia the precise amount of the central government’s transfer of extractive industry non-tax revenues to provincial and district governments, disaggregated to the level of companies of origin. This accounts for about 8% of government expenditure.

In my view, EITI is good for Indonesia, but also for ASEAN member countries, business, investors and civil society. Openness of information on extractive industries resources in ASEAN will assist in regional integration and even, possibly, a single ASEAN market for 2015.

 

Erry Riyana Hardjapamekas is a member of the EITI Board, and of the Board’s Committee on Outreach and Candidature. He also serves on the boards of a several corporations domiciled in ASEAN. He is the former President Director of the Indonesian National Tin Mining Company (PT. Timah) and the former Vice Chairman of the Indonesian Anti-Corruption Commission (KPK-RI).

 

Photo: Erry Riyana Hardjapamekas speaking at an evening reception after a meeting of the EITI Board held in Indonesia, October 2011.