Côte d’Ivoire has made meaningful progress overall in implementing the 2016 EITI Standard, with considerable improvements across several individual requirements.

14.04.2020
Decision 2020-25/BC-288
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Keywords: Validation
Country: Côte d'Ivoire

The Board's decision

The Board came to the following decision regarding Côte d'Ivoire's status:

The EITI Board agrees that Côte d’Ivoire has fully addressed three of the twelve corrective actions from the country’s first Validation. Consequently, Côte d’Ivoire has made meaningful progress overall in implementing the 2016 EITI Standard, with considerable improvements across several individual requirements.

The Board congratulates the Government of Côte d’Ivoire and the Multi-Stakeholder Group (MSG) on the progress made in improving transparency in the strategically important extractive industries. The long-established oil and gas sector is key to the government’s current reforms of its electricity market, which supplies the region. Greater transparency on licensing and rights management in the mining sector has helped ensure that oversight has kept pace with rapid growth in mining, particularly of gold. The Board commends Côte d’Ivoire EITI for starting to use EITI reporting to clarify the rules and practices related to state participation in the oil and gas sector, including transactions involving the national oil company PETROCI, gas-for-oil swaps and non-cash settlements of electricity for natural gas, even if further efforts are required. The Board also congratulates the Government of Côte d’Ivoire for its efforts to optimise collection and distribution of revenues from the mining sector and help improve relationships between mining companies and local communities, through the creation of the Local Mining Development Committee (Comité de Développement Local Minier).

The Board recognises that gaps remain in disclosures related to strengthening the multi-stakeholder nature of EITI implementation by strengthening MSG oversight and aligning the objectives set out in the annual EITI work plan with national priorities. Further efforts are also required to ensure greater transparency in state participation and distribution of revenues, including the sale of the state’s in-kind revenues, the electricity-for-gas settlements (swap), and quasi-fiscal subsidies, as well as license management and registers. The Board commends the Government of Côte d’Ivoire for its commitment to enhance transparency and accountability in the extractive industries and encourages the government and MSG to make progress in ensuring systematic contract disclosure from 1 January 2021.

The Board takes note of Côte d’Ivoire’s plans to transition to systematic disclosures of EITI data through government and company systems. The Board encourages the government and the MSG to explore opportunities for the MSG to work directly with government entities and companies to reform disclosure practices, enabling them to focus on analysis and use of EITI data to inform public policy. Côte d’Ivoire is encouraged to integrate concrete activities to transition towards systematic disclosure in its EITI work plan.

The Board has determined that Côte d’Ivoire will have 18 months before a third Validation, i.e. until 14 October 2021, to carry out corrective actions regarding MSG governance (Requirement 1.4), work plan (Requirement 1.5), license allocation (Requirement 2.2), License register (Requirement 2.3), State-participation (Requirement 2.6), in-kind revenues (Requirement 4.2), barters and infrastructure arrangements (Requirement 4.3), distribution of revenues (Requirement 5.1), social expenditures (Requirement 6.1) and SOE quasi-fiscal expenditures (Requirement 6.2). Failure to achieve satisfactory progress in the third Validation will result in temporary suspension in accordance with Article 6 of the EITI Standard. In accordance with the EITI Standard, Côte d’Ivoire’s Multi-Stakeholder Group (MSG) may request an extension of this timeframe or request that Validation commences earlier than scheduled.

Background

Côte d’Ivoire joined the EITI in 2008 and became compliant with the EITI Rules in May 2013. On 8 May 2018, Côte d’Ivoire was found to have made meaningful progress in implementing the 2016 EITI Standard. Côte d’Ivoire’s second Validation against 2016 EITI Standard commenced on 8 November 2019. The EITI International Secretariat has assessed the progress made in addressing the 12 corrective actions established by the EITI Board following Côte d’Ivoire’s first Validation. The corrective actions are related to:

  1. MSG governance (Requirement 1.4)
  2. Work plan (Requirement 1.5)
  3. License allocation (Requirement 2.2)
  4. License register (Requirement 2.3)
  5. State-participation (Requirement 2.6)
  6. In-kind revenues (Requirement 4.2)
  7. Barters and infrastructure arrangements (Requirement 4.3)
  8. SOE transactions (Requirement 4.5)
  9. Distribution of revenues (Requirement 5.1)
  10. Subnational transfers (Requirement 5.2)
  11. SOE quasi-fiscal expenditures (Requirement 6.2)
  12. Documentation of outcomes and impact (Requirement 7.4).

The Board asked Côte d’Ivoire to address these corrective actions to be assessed in the second Validation. Côte d’Ivoire has undertaken a number of activities to address the corrective actions:

  • In July 2018, EITI Côte d’Ivoire published its 2017 annual progress report. 
  • In November 2019, EITI Côte d’Ivoire published its 2017 EITI Report.
  • On 13 September 2019, Antoine Kocounseu Mimba was appointed as MSG Chair, replacing Mr Koffi Ndri, in accordance with Inter-Ministerial Order 0345/MEF/MMG/MPEER/SEPMPBE on 16 August 2019.
  • In September 2019, the MSG renewed its membership.
  • On 19 September 2019, the mining association GPMCI (Groupement Professionnel des Miniers de Côte d’Ivoire) held a meeting of its members’ focal points to agree nominations and coordination procedures for its representatives on the EITI Côte d’Ivoire MSG.
  • The EITI Côte d’Ivoire MSG held meetings on 23 August and 22 November 2018 and on 20 March, 6 June and 2 and 29 October 2019.
  • From 10 to 12 October 2019, EITI Cote d’Ivoire carried out its self-evaluation workshop and produced a report on consultations on the workplan, follow-up on recommendations and the impact study.
  • In November 2019, EITI Côte d’Ivoire published an impact assessment study of EITI implementation in the country prepared by PWYP Côte d’Ivoire and EITI Côte d’Ivoire.
  • In October 2019, EITI Côte d’Ivoire published  the Decree fixing per diem rates for MSG meetings.
  • On 7 November 2019, EITI Côte d’Ivoire published its 2017 EITI Report.  Associated documentation, including the reconciliation tables disaggregated by company, were published ahead of the commencement of Validation.

Côte d’Ivoire’s second Validation commenced on 8 November 2019. The Secretariat assessed the progress made in addressing the twelve corrective actions established by the EITI Board, as well as progress in meeting Requirement 6.1 related to social expenditures. The EITI International Secretariat’s assessment is that Côte d’Ivoire has fully addressed three of the twelve corrective actions, with satisfactory progress on each of the corresponding requirements. Progress in meeting Requirement 6.1 on social expenditures has declined from ‘satisfactory progress’ to ‘meaningful progress’.

The draft assessment was sent to the MSG on 14 February 2020. Following MSG comments received on 10 March 2020, the assessment was finalised for consideration by the EITI Board.

Assessment card

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Corrective actions

The EITI Board agreed the following corrective actions to be undertaken by Côte d’Ivoire. Progress in addressing these corrective actions will be assessed in a third Validation commencing on 14 October 2021.

 

  1. In accordance with Requirement 1.4, Côte d’Ivoire should ensure that the procedures for nominating and replacing multi-stakeholder group representatives are public and implemented in a fair, open and transparent way. In particular, the industry constituency should ensure that it establishes clear nominations and representation guidelines that ensure that the broader constituency is well-represented and actively consulted. The MSG should elaborate robust internal governance documents that cover all aspects of Requirement 1.4.b, update its TOR to include term limits, and ensure that each constituency develops constituency guidelines establishing their nominations and coordination mechanisms. Given the critical role that civil society plays in Côte d’Ivoire, the MSG may also wish to build capacities of civil society groups and broaden the reach of the EITI in Côte d’Ivoire, and ensure that relevant MSG meetings are open to observers in practice in accordance with the MSG’s ToR.
     
  2. In accordance with Requirement 1.5.a, Côte d’Ivoire should set EITI implementation objectives that are linked to the EITI Principles and directly reflect national priorities for the extractive industries. The work plan should address the steps needed to mainstream EITI implementation in company and government systems. In accordance with Requirement 1.5.c, Côte d’Ivoire should identify and further outline plans to address legal or regulatory obstacles to EITI implementation. This could include plans to incorporate contract transparency and beneficial ownership disclosure within national legislation. Côte d’Ivoire may also wish to build on key achievements to date in developing future EITI work plans, while using the work plan as a live document to track implementation of activities during the year.
     
  3. In accordance with Requirement 2.2, Côte d’Ivoire should ensure that the statutory procedures for awarding and transferring oil and gas licenses (or participating interests therein) be publicly disclosed, including the specific technical and financial criteria assessed. Côte d’Ivoire should ensure that EITI reporting provides an annual diagnostic of any non-trivial deviations from the applicable legal and regulatory framework governing license awards and transfers in the oil and gas sector. To strengthen implementation, Côte d’Ivoire is encouraged to used EITI reporting as a means for assessing the efficiency of license allocations and transfers in the mining, oil and gas sectors.
     
  4. In accordance with Requirement 2.3, Côte d’Ivoire is required to maintain a publicly accessible register of licenses in both the mining and oil and gas sectors, providing access to all information listed under Requirement 2.3.b. In the interim, Côte d’Ivoire should ensure that all information listed under Requirement 2.3.b is publicly accessible for all licenses held by mining, oil and gas companies included in the scope of EITI reporting. To strengthen implementation, Côte d’Ivoire is encouraged to use EITI reporting as an annual diagnostic of the implementation of cadastral reforms in both the mining and oil and gas sectors.
     
  5. In accordance with Requirement 2.6, Côte d’Ivoire should ensure that descriptions of the terms associated with the government and SOEs’ level of ownership in mining, oil and gas companies and projects are publicly accessible. To strengthen implementation, Côte d’Ivoire is encouraged to use EITI reporting as a more effective platform of debate on complex issues such as swap arrangements and prospects for SOE financing.
     
  6. In accordance with Requirement 4.2, Côte d’Ivoire should ensure that information on the volumes of government in-kind oil and gas revenues sold and the proceeds of those sales be disaggregated by buyer and contract. Côte d’Ivoire should ensure its expanded coverage of the electricity-for-natural gas barter arrangement between CIE and the government through PETROCI under Requirement 4.3 is integrated into its disclosures on the sale of the government’s in-kind revenues.
     
  7. In accordance with Requirement 4.3, Côte d’Ivoire is required to disclose the key terms of the swap agreement and barter-type settlement, the parties involved, the resources which have been pledged by the state, and the value of the balancing benefit stream. Côte d’Ivoire is required to ensure that its public disclosures address these agreements, providing a level of detail and transparency commensurate with the disclosure and reconciliation of other payments and revenues streams. Côte d’Ivoire is encouraged to use EITI reporting as an annual diagnostic of the performance of the gas to power barter-type arrangements to support broader electricity sector reforms and the IMF’s extended credit facility.
     
  8. In accordance with Requirement 5.1, Côte d’Ivoire must ensure that a clear categorisation of extractives revenues that are recorded in the national budget and, where relevant, links to financial reports on extractives revenues that are not recorded in the national budget. Côte d’Ivoire should clarify whether DGH training and equipment contributions should be considered off-budget extractives revenues or mandatory social expenditures.
     
  9. In accordance with Requirement 6.1, Côte d’Ivoire should systematically categorise types of mandatory social expenditures mandated by law or contract and ensure that public disclosures of mandatory social expenditures be disaggregated between cash and in-kind expenditures, by type of payment and beneficiary, clarifying the name and function of any non-government (third-party) beneficiaries of mandatory social expenditures. Côte d’Ivoire is encouraged to establish a consensus on the proper categorisation of training and equipment contributions to the DGH and to disclose all information listed under Requirement 6.1.a should they be considered forms of mandatory social expenditures.
     
  10. In accordance with Requirement 6.2, Côte d’Ivoire is required to ensure comprehensive disclosures by SOEs on their quasi‑fiscal expenditures to a level of transparency  commensurate with other payments and revenue streams and include SOE subsidiaries and joint ventures.