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

Outcome of the Validation of Chad.

Decision reference
2019-38 / BC-273
Decision basis
2016 EITI Standard, Requirement 8.3 EITI Validation deadlines and consequences

Board decision

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

The Board congratulates the Government of Chad and the Multi-Stakeholder Group (MSG) on the progress made in improving transparency in the oil and gas sector in recent years, despite the challenging environment of falling government revenues and security threats from Boko Haram.

The Board recognises the challenging space for civil society and the efforts being made to address those challenges. The Board expresses concerns on the deterioration of civil society’s freedom of expression, operation and association since Ordonnance 23 came into force. The Board encourages the Government of Chad to take all necessary measures to ensure civil society representatives can participate freely in the EITI process in accordance with the Civil Society Protocol and that transparency can lead to informed public debate.

The Board notes stakeholders’ efforts to use the EITI Reports to monitor the cost of production and transport of crude oil from the oil fields to the export terminal in Kribi.  The Board also recognises Chad’s efforts to go beyond the minimum requirements of the EITI Standard in the disclosure of contracts, information about the legal framework and on disclosures of in-kind revenues, including repayments of oil backed-loans.

The Board encourages EITI Chad to improve disclosure of direct subnational payments and subnational transfers to local communities mandated by law. EITI Chad is also encouraged to improve transparency of expenditures that are not recorded in the national budget, license allocation, and production data.

The Board has determined that Chad will have 18 months, i.e. until 1 November 2020 before a second Validation to carry out corrective actions regarding the requirements relating to civil society engagement (1.3), MSG governance (1.4), license allocation (2.2), license register (2.3) production data (3.2), direct subnational payments (4.6), subnational transfers (5.2), SOE quasi-fiscal expenditures (6.2), and public debate (7.1). 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, Chad’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 September 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.

Corrective actions and strategic recommendations

The EITI Board agreed the following corrective actions to be undertaken by Chad. Progress in addressing these corrective actions will be assessed in a second Validation commencing on 8 October 2020.

  1. In accordance with Requirement 1.3 and the Civil Society Protocol, Chad is required to ensure adequate space for civil society to actively, fully and effectively participate in the EITI process, without fear of reprisal. It is recommended that adequate safeguards be implemented to effectively remove provisions of laws and regulations (e.g. Ordonnance 23) that curb civil society’s ability to operate freely. It is recommended that the scope of the provisions in the presidential decree to protect civil society members of the MSG is expanded to include legal protections for all civil society actors substantially involved in the EITI process.

  2. In accordance with Requirement 1.4, Chad should ensure that procedures set out in the 2018 Decree are implemented in practice. Chad should ensure each constituency publishes its procedures for nominating and changing MSG members and ensure that MSG members have the capacities to carry out their duties. The MSG should clarify its policy and practice of per diems and ensure that it does not create conflicts of interest. Chad should ensure that there is sufficient notice of meetings and timely circulation of documents prior to their debate and proposed adoption. Chad must ensure that all MSG discussions and decisions are adequately documented and is encouraged to publish them online. Chad is also encouraged to provide adequate training to new MSG members, to provide adequate funding to EITI implementation and to ensure that the MSG operates in a favourable environment to carry out its mandate as per Art.24 of the 2018 Decree, in order to allow Chad EITI to fulfil its mandate. Given its central role in the petroleum industry in Chad, it is also recommended that Glencore designates its representative to the MSG to ensure that the industry is adequately represented.

  3. In accordance with Requirement 2.2, Chad should ensure that the information on licenses awarded and transferred in both sectors is publicly accessible. Chad is required to disclose the technical and financial criteria used to award or transfer licenses. In the case of licenses awarded by bidding process, Chad is required to disclose the list of applicants and the bid criteria. In addition, Chad is encouraged to disclose comprehensive and timely information about licenses awarded before and after the year under review. Chad is encouraged to include additional information on the allocation of licenses in EITI reporting, including commentary on the efficiency and effectiveness of licensing procedures.

  4. In accordance with Requirement 2.3, Chad is required to maintain a publicly available register or cadastre system, providing comprehensive data on licenses for all oil, gas and mining companies. In addition to its stated plans for strengthening the cadastre, Chad might wish to build on the map currently available on the MPE website. In the interim, Chad should ensure that future EITI reporting provide the information set out under Requirement 2.3.b, including coordinates and dates of application and expiry, for all licenses held by material mining, oil and gas companies. EITI reporting should also document the government’s efforts to strengthen its cadastral system. 

  5. In accordance with Requirement 3.2, Chad is required to ensure comprehensive disclosure of production data from the mining sector.

  6. In accordance with Requirement 4.6, Chad is required to reconcile and disclose revenues collected at the local level where material. Chad should allocate the adequate means to reach out to subnational governments and associate them to the reporting and reconciliation process. Chad should also disclose figures from companies that operate in producing regions and are required to make subnational direct payments as per the regulatory framework. Chad should also clarify in which areas payments are made directly to the treasury in the absence of a local government.

  7. In accordance with Requirement 5.2, Chad should ensure that effective subnational transfers are disclosed by government agencies, where material. Chad should provide the specific revenue-sharing formula for calculating statutory shares to individual local governments, the value of executed transfers per local government and an assessment of deviations with the value of subnational transfers calculated according to the formula. Chad is encouraged to ensure that any material discretionary or ad hoc transfers are also disclosed and where possible reconciled. In light of the dissolution of the CCSRP in April 2018 and its mandate to report on the disbursement and allocation of the 5%, Chad is encouraged to clarify which government agencies are tasked with these prerogatives from 2017 onwards. Chad is also encouraged to engage with local governments receiving extractives subnational transfers with a view to reconciling subnational transfers with a view to reconciling such payments and enhance outreach to local communities.

  8. In accordance with Requirement 6.2, Chad is required to develop a reporting process for fuel subsidies and national debt servicing that are not recorded on the national budget. Chad should undertake a comprehensive review of all expenditures of oil revenues, which are not recorded on the national budget. Chad should develop a reporting process for these expenditures with a view to achieving a level of transparency commensurate with other payments and revenue streams. In particular, it is recommended that Chad designs appropriate reporting templates that can capture the volume and value of crude oil delivered to the refinery for electricity production as well as the amount of electricity and equivalent value delivered to the state.

  9. In accordance with Requirement 7.1, Chad should ensure that EITI reporting is comprehensible, including by ensuring that it is written in a clear, accessible style, and that executive summaries or thematic sub-reports are made available and translated into Arabic. Chad should also ensure that adequate funding is available for outreach events, including to regions and communities hosting extractive activities, and that local stakeholders benefit from capacity building activities aiming at improving their understanding of the management of the oil sector. Chad should also encourage government agencies, companies and civil society to fully engage in disseminating EITI Reports, including bilaterally. To strengthen implementation, Chad is encouraged to improve public accessibility of key information on the management of the extractives through systematic disclosure of information required under the EITI Standard through routine government and company systems.

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.


Chad announced its intention to implement the EITI in 2007. A Presidential decree established the MSG in December 2007, but appointment of members to the High National Committee (Haut Comité National, HCN) was delayed until February 2010. Chad was admitted as a candidate country on 16 April 2010. The Board declared Chad compliant with the EITI Rules in October 2014.

The Validation process commenced on 1 September 2018. In accordance with the Validation procedures, an initial assessment [English] [French] as 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 7 February 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 10 April 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 Chad’s EITI Reports.

Scorecard for Chad: 2019

Assessment of EITI requirements

  • Not met
  • Partly met
  • Mostly met
  • Fully met
  • Exceeded
Scorecard by requirement View more Assessment View more

Overall Progress

MSG oversight

1.1Government engagement

The government has issued public statements of its commitment to the EITI, appointed high-level government officials to oversee and engage in the EITI process, provided substantial amounts of funding for EITI implementation, and ensured the functioning of the national secretariat. Government agencies have participated actively in EITI reporting and dissemination. While stakeholders consulted noted the decrease in government funding in the past two years, they highlighted the government’s commitment to improving transparency in the extractive sector.

1.2Company engagement

The government has conducted reviews of the legal and regulatory environment and taken steps to address barriers to industry participation in the process, including removal of confidentiality clauses in oil contracts. Industry representatives led by Esso have participated actively in EITI reporting and in MSG meetings. MSG membership show that the oil industry has been represented at a high-level and companies have contributed to the design and implementation of the EITI.

1.3Civil society engagement

The Board agreed that Chad had made meaningful progress on Requirement 1.3. For a summary of the assessment, please refer to the Validation Report and initial assessment.

1.4MSG governance

The 2014 Decree set out a clear mandate for the MSG. Its membership was regularly renewed. Procedures for decision-making and duration of the mandate were clear, but not systematically documented in practice. The Decree did not explicitly mention certain aspects of internal governance and the nominations process for two constituencies was unclear until April 2018. Stakeholders consulted confirmed that the lack of clarity on nominations had not negatively affected the representation of broader constituencies and that the MSG was based on an inclusive decision-making process in practice. The per diem policy was not transparent, with potential conflicts of interest.

1.5Work plan

The work plan contains objectives aligned with national priorities, has measurable and time-bound activities, provides for plans to address capacity constraints and scope of EITI reporting, as well as plans for follow-up on EITI recommendations. Stakeholder consultations confirmed that the EITI work plan was a result of consultations with stakeholders in all three constituencies. The work plans are fully costed, with indications of the sources of funding.

Licenses and contracts

2.2License allocations

EITI reporting provides a description for awarding and transferring licences in the oil and gas sector, albeit with incomplete information on technical and financial criteria assessed for the allocation of oil licenses by tender process. No licenses were awarded or transferred in the oil sector in 2016. The report provides a list of active licenses in the extractives sector and the names of license holders, as of April 2018 for the mining sector and as of December 2016 for the oil sector. The report confirms the absence of non-trivial deviations in the mining sector in 2016.

2.3License register

The Chad EITI website provides the most comprehensive repository to date of oil contracts and decrees approving mining licenses in Chad. The 2016 EITI Report lists active research and production licenses in the oil and mining sector, with minor gaps in dates of application and expiry for both oil and mining licenses, as well as coordinates and size for some mining licenses. Stakeholders highlighted that Chad aims to introduce publicly available cadastre systems in the short term, with up-to-date information already available upon request at the MPE.

2.4Policy on contract disclosure

Following the announcement of new government policy in favour of the publication of oil production contracts in April 2018, Chad EITI published all contracts on its website and currently constitutes the most complete repository of contracts in Chad. It also published decrees approving the allocation of mining licenses, as well as all active ASM sector licenses, research licenses, semi-industrial production licenses and production licenses in the mining sector. Despite high stakeholder interest, the Glencore debt agreement has not been published to date, even if this is not strictly-speaking an extractives contract.

2.1Legal framework

EITI reporting provides a clear explanation of the applicable fiscal regime and a description of each revenue stream. For the first time, the 2016 EITI Report also described potential fiscal exemptions and compared royalty rates for each producing company compared to what was paid in practice. A quarterly government report on the oil sector also tracks regulatory changes in the oil sector.

2.5Beneficial ownership

Not assessed

Chad published its beneficial ownership roadmap in January 2017, which includes agreeing a definition of beneficial ownership, adopting a beneficial ownership law, publishing data online and setting up a public register. The MSG adopted the definition of the 4Th Directive of the European Union on illicit financial flows and requires that companies report politically exposed persons. The 2016 EITI Report lists the information provided by oil and mining companies. Of the 30 material companies, 17 are either State-owned or publicly-listed, while the remaining 13 did not disclose complete beneficial ownership data.

2.6State participation

The 2016 EITI Report as well as publicly-accessible SHT publications provide a comprehensive overview of state participation in the oil and gas sector. It describes the terms associated with SHT's participation in each project and company in which it holds equity, and documents the practice. Cash-calls for production cost and loan repayments are also disclosed. The report confirmed that there are no loans or loans guarantees from the state or from SHT to oil and gas companies, aside from the sovereign guarantee on the Glencore loans, whose terms are described.

Monitoring production

3.1Exploration data

The 2016 EITI Report provides an overview of the extractive industries, including the oil transportation and refining sectors, estimates of reserves for eight key oil fields and an overview of significant exploration activities.

3.2Production data

The 2016 EITI Report disclosed total oil production volumes, by consortium and field. It provides the total value of production and how that figure was calculated. Chad reconciled production volumes disclosed by SHT and oil operators and included production costs. Stakeholders noted that there was no industrial mining production and highlighted challenges in collecting data on the ASM sector. Despite the inclusion of ten material quarrying companies in the scope of EITI reporting, the report did not include figures on quarrying production volumes or values.

3.3Export data

Chad disclosed total export volumes and values by commodity and oil field for 2016, sources of the data, information on how the value of exports was calculated and main destinations. Chad disclosed granular and unique data about the sale of the state’s share of oil to Glencore in 2016. As stakeholders explained, government data on mineral exports was unavailable due to the absence of industrial production.

Revenue collection

4.3Barter agreements

Not applicable

While the MSG considered the framework agreement for the provision of crude oil by CNPCI to the national refinery at a fixed price and the refinery’s supply of electricity to the state-owned power company at below-market prices as a material barter agreement, the arrangement does not seem to constitute such an agreement in the sense of Requirement 4.3. Coverage of this arrangement is nonetheless commendable and is considered a form of quasi-fiscal expenditures in this assessment under Requirement 6.2.

4.6Direct subnational payments

The 2016 EITI Report lists the taxes and levies that should be collected at the local level based on the regulatory framework. The report reconciles one of them, the ‘Contribution de la patente’, but does not clarify whether it was collected solely at the central level in practice. Gaps in subnational reporting are due to challenges in associating subnational governments to the EITI process, as confirmed by stakeholder views. It can be noted that none of the direct subnational payments applicable in Chad are extractive sector-specific.


Chad provided financial information disaggregated by individual company, government entity and revenue stream. In addition, it reported data on the sale of the State’s share of production and revenues collected in-kind by cargo.

4.9Data quality

The MSG oversaw the procurement of the IA, approved the TORs in line with the standard TORs and adopted reporting templates. The 2016 EITI Report included an overview of statutory audit procedures and actual practice and described the assurance methodology agreed by the MSG. It provided an assessment of the materiality of omissions and of the overall reliability of reconciled financial data. All stakeholders consulted expressed their confidence in the reliability of EITI data. The EITI Report provided an overview of follow-up on past recommendations and a new set of recommendations for 2016. Summary data files are publicly accessible.


The MSG agreed materiality definitions and thresholds and included the main revenues streams in the extractive sector. The 2016 EITI Report provided a comprehensive reconciliation of government revenues and company payments, including payments to and from SOEs. All material companies and government entities included in the scope of reporting comprehensively disclosed their payments and revenues, with gaps from three government entities’ lack of reporting relating only to subnational transfers. Full unilateral government disclosure by company and revenue stream was publicly available on the Chad EITI website, disclosed after the start of Validation.

4.2In-kind revenues

The 2016 EITI Report reconciled material revenue collected in-kind with each producer and evaluated whether oil companies complied with their contractual royalty rates. In addition to volumes sold and revenues received, the report shows, by shipment, the type of oil sold, the quality of the oil, pricing option, selling price, contract type, invoice number, date of sale, date of payment and destination of the shipment. The report also shows the transfer of proceeds to cover cash-calls from oil producers, loan repayments such as the Glencore oil-backed loan, fees for the sale and the balance paid to the treasury.

4.4Transportation revenues

The 2016 EITI Report disclosed revenues received from the transportation of oil, disaggregated by company and revenue flow. In addition, it included a description of transportation arrangements, a definition of relevant revenues collected and tariffs, the disclosure and reconciliation of volumes of transported oil, and the reconciliation of transportation revenues. The report also included transportation costs applied to the state’s share of oil.

4.5SOE transactions

The EITI Report describes the role of the SOE, SHT operating in the oil and gas sector. Material revenues collected on behalf of the State and financial transfers between SHT and government entities have been fully disclosed in accordance with Requirement 4.5. The Secretariat concludes that all aspects of this requirement have been implemented and the underlining objectives have been achieved.

4.8Data timeliness

The 2016 EITI Report was published within two years of the end of the fiscal period covered and the MSG approved the reporting period.

Revenue allocation

5.1Distribution of revenues

The 2016 EITI Report indicates the specific extractives revenues recorded in the national budget and the revenues recorded in the Citibank account in London. The deductions for loan repayments prior to transferring the net balance to the Treasury represent off-budget revenues. Chad’s EITI reporting and the MFB quarterly reports provide detailed information on the repayments of the loan off-budget. The allocation of revenues that are not recorded in the budget has been explained under Requirement 4.2.

5.2Subnational transfers

The 2016 EITI Report provides the general statutory revenue-sharing formula for direct oil revenues in aggregate, as well as disaggregated figures for government allocations based on the supplementary budget. However, the report does not clarify the specific revenue-sharing formula to calculate each local government’s share and does not provide the value of executed transfers per local government. It uses data from the CCSRP 2016 annual report, but with a lower level of disaggregation.

5.3Revenue management and expenditures

Not assessed

It is encouraging that Chad has included some information on the budget-making process in EITI reporting and that the MFB website provides key documents about the management of public finances, including forecasted oil revenues.

Socio-economic contribution

6.1Mandatory social expenditures

Not applicable

The 2016 EITI Report implies and stakeholders consulted confirmed that mandatory social expenditures did not exist for extractives companies in Chad in 2016. Nonetheless, the report discloses some information on companies’ voluntary social expenditures.

6.2Quasi-fiscal expenditures

Although the report includes a detailed description of the framework agreement for the sale of crude oil by CNPCI to the SRN refinery at fixed prices and the sale of electricity by SRN to SNE at below-market prices, it lacks sufficient information on the value of crude oil delivered to the national refinery and the value of electricity subsequently supplied by SRN to SNE. The reliability of the disclosed data was also a concern given significant changes between the initial declaration and the certified data.

6.3Economic contribution

The 2016 EITI Report provides the contribution of the extractive industries, in absolute and relative terms, to GDP, government revenues and exports, as well as a list of key producing regions. Despite concerns over the reliability of employment figures unilaterally disclosed by companies, industry representatives explained challenges behind reporting the number of employees and the EITI Report is transparent about constraints on disclosing comprehensive employment figures.

Outcomes and impact

7.2Data accessibility

Not assessed

Requirement 7.2 encourages the MSGs to make EITI reports accessible to the public in open data formats. Such efforts are encouraged but not required and progress with this requirement does not yet have any implications for a country’s EITI status. Chad published machine-readable EITI reports and compared EITI data with the TOFE.

7.4Outcomes and impact of implementation

The 2017 annual progress report includes a summary of EITI activities, an assessment of progress with meeting EITI Requirements, in addressing recommendations from reconciliation and Validation and with achieving objectives set out in the work plan. The narrative account of efforts to strengthen the impact of EITI implementation on natural resource governance is particularly detailed and follows up closely on previous efforts to document the impact of EITI implementation, including through an impact assessment in September 2016.

7.1Public debate

EITI Reports are accessible online and for consultation at the Chad EITI office. Chad has agreed an open data policy and publishes summary data files. However, EITI Reports are not necessarily comprehensible for a wider audience. While there is evidence of significant EITI data dissemination until 2016, funding gaps have since limited such activities. Despite the use of online platforms, the radio, the press and activities at the Chad EITI office, the contribution of EITI data to public debate is not commensurate with its significance nor with the importance of the oil sector in the Chadian economy more broadly.

7.3Follow up on recommendations

There is evidence of follow-up of recommendations and investigation of discrepancies through discussions within the MSG, the creation of internal committees to identify actors and areas for improvement, and active outreach to decisionmakers to push for reforms. Stakeholders noted the involvement of Chad EITI in consultations about key sector reforms.