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

The Board's decision

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

The Board congratulated the Government of Guinea and the Multi-Stakeholder Group (MSG )on the progress made inimproving transparency and accountability in the extractive industries. In the context of rapidly growing mining sector, the Board believes that Guinea EITI has the potential to play a keyrole insupporting sector reforms and informing the public debate on natural resource governance.

The Board congratulated stakeholders for strengthenin the comprehensiveness and quality of EITI reporting, and enhancing transparency in licence allocation procedures ,the licence register, and in the disclosures of state-owned enterprises. The Board also recognised Guinea’s efforts to go beyond the requirements of the EITI Standard in the disclosure of mining contracts through its contract transparency portal (www.contratsminiersguinee.org).

The Board encouraged Guinea EITI to ensure that improvements in MSG oversight over the EITI process are commensurate with improvements in EITI reporting. The Board encouraged Guinea EITI to deepen efforts in the disclosure of direct subnational payments, licence allocation, and quasi-fiscal expenditures by state-owned enterprises. It also encouraged stakeholders to strengthen the MSG’s follow-up on EITI recommendations and evaluation ofoutcomes and impact of EITI implementation.

The Board encouraged Guinea EITI to shift the focus from overseeing the preparation of EITI Reports to supporting changesto enable systematic and regular disclosure of EITI data through government systems; and to support the implementation of the new Local Economic Development Fund (FODEL).

The Board determined that Guinea will have 18 months, i.e. until 27 August 2020 before a second Validation to carry outcorrective actions regarding the requirements relating to industry engagement(1.2), MSG governance (1.4), license allocation (2.2), infrastructure agreements (4.3), direct subnational payments(4.6), quasi-fiscal expenditures (6.2), follow up on recommendations (7.3), and documenting outcomes and impact of implementation (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, Guinea’sMSG 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 2018. 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.

Assessment card

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Background

The Government of Guinea committed to implement the EITI in April 2005 and was accepted as an EITI Candidate in September 2007. Guinea was declared compliant with the EITI Rules in July 2014.

Guinea’s Validation commenced on 1 July 2018. In accordance with the Validation procedures, an initial assessment [English | French] was prepared by the International Secretariat. The independent Validator reviewed the findings and wrote a draft Validation report [English | French]. Comments from the MSG [English | French] were received on 4 January 2019. The independent Validator reviewed the comments and responded to the MSG, before finalising the Validation report [English | French].

The Validation Committee reviewed the case on 6 February 2019. Based on the findings above, the Validation Committee agreed to recommend the assessment card and corrective actions outlined below. The Committee also agreed to recommend an overall assessment of “meaningful progress” in implementing the 2016 EITI Standard. Requirement 8.3.c. of the EITI Standard states that:

ii. Overall assessments. Pursuant to the Validation Process, the EITI Board will make an assessment of overall compliance with all requirements in the EITI Standard.

iv. Meaningful progress. The country will be considered an EITI candidate and requested to undertake corrective actions until the second Validation.

The Validation Committee agreed to recommend a period of 18 months to undertake corrective actions. This recommendation takes into account that the challenges identified are relatively significant and seeks to align the Validation deadline with the timetable for Guinea’s 2017 and 2018 EITI Reports.

Corrective actions

The EITI Board agreed the following corrective actions to be undertaken by Guinea. Progress in addressing these corrective actions will be assessed in a second Validation commencing on 27 June 2020:

1) In accordance with Requirement 1.2, the industry constituency should demonstrate that they are fully, actively and effectively engaged in the EITI process. In accordance with requirement 8.3.c.i, the industry constituency should develop and disclose an action plan for addressing the deficiencies in industry engagement documented in the Validator’s report within three months of the Board’s decision, i.e. by 27 May 2019 .

2) In accordance with requirement 1.4b, the MSG should update the 2012 Decree and Ministerial Order on MSG membership, and the June 2018 ToR to ensure that they align with the 2016 EITI Standard. The industry and civil society constituencies should develop, publish and implement procedures for an inclusive, fair, and transparent nomination of their representatives on the MSG. The MSG may also wish to consider options to broaden industry participation on the MSG. The MSG may wish to clarify the MSG governance framework, which is currently described over four different documents. It may wish in particular to combine the Ministerial Order on the composition of the MSG, the Internal Rules and the ToR into a single document.

3) In accordance with Requirement 2.2, Guinea should ensure that the detailed technical and financial criteria for both license awards and transfers be publicly accessible. In light of significant public concern over the legacy of non-trivial deviations from statutory licensing procedures, Guinea should ensure that its approach to publicly disclosing non-trivial deviations be commensurate with the number of licenses awarded and transferred in the year under review.

4) In accordance with Requirement 4.3, Guinea should assess the existence of infrastructure provisions during the scoping phase for its next EITI reporting cycle to ensure disclosure of any agreements, or sets of agreements involving the provision of goods and services (including loans, grants and infrastructure works), in full or partial exchange for oil, gas or mining exploration or production concessions or physical delivery of such commodities. Guinea should gain a full understanding of the terms of the relevant agreements and contracts, the parties involved, the resources that have been pledged by the state, the value of the balancing benefit stream (e.g. infrastructure works), and the materiality of these agreements relative to conventional contracts.

5) In accordance with Requirement 4.6, Guinea should ensure that information on extractives company direct payments to subnational governments, where material, be comprehensively disclosed and reconciled with each local government’s receipts of these payments.

6) In accordance with Requirement 6.2, Guinea should undertake a comprehensive review of all expenditures undertaken by extractives SOEs that could be considered quasi-fiscal and develop a reporting process with a view to achieving a level of transparency on all types of quasi-fiscal activities linked to extractives revenues commensurate with other payments and revenue streams. To strengthen implementation, Guinea is strongly encouraged to consider the extent to which routine publication of SOEs’ annual audited financial statements would help promote greater trust in the quality and comprehensiveness of public disclosures of quasi-fiscal expenditures.

7) In accordance with Requirement 7.3, the MSG should introduce a systematic and structured mechanism to track and follow up on recommendations, with a clear timeframe and clear responsibilities for following up. The MSG should also take a more proactive role in formulating its own recommendations. The MSG may also wish to include Validation, as a means of ensuring closer attention to implementation. The MSG may also wish to consider utilising the Supervisory Committee to follow-up on recommendations from past EITI Reports and Validation as a means of ensuring the sustainability and continued effectiveness of follow-up channels.

8) In accordance with Requirement 7.4, the MSG should consider using the annual progress report to evaluate the impact of the EITI, beyond describing outputs and outcomes of workplan activities. The MSG should also undertake an impact assessment with a view to identify opportunities for increasing the impact of implementation in Guinea. Greater effort could also be made to canvass the broader constituencies for input in assessing the outcomes and impact of EITI implementation through the annual progress report.

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.