The EITI Board agreed that São Tomé and Príncipe has made meaningful progress in implementing the 2016 EITI Standard
The Board's decision
The Board came to the following decision:
The EITI Board agrees that São Tomé and Príncipe has not addressed the corrective actions from the country’s third Validation. Consequently, São Tomé and Príncipe has made meaningful progress overall in implementing the 2016 EITI Standard.
The Board recognises that São Tomé and Príncipe has maintained a high level of disclosures that contribute to public understanding on issues such as oil revenue management and social payments. The government is encouraged to address remaining gaps in disclosures related to licenses and data quality.
São Tomé and Príncipe is urged to consider a more sustainable and proportionate approach to EITI implementation that would reflect the fact that the petroleum sector is in exploration phase and revenues are modest. The government is encouraged to fully transition to routine disclosures of EITI data through government websites, engage with the Auditor General (Tribunal de Contas) to strengthen data quality and embed the EITI national secretariat into government structures.
The Board has determined that São Tomé and Príncipe will have 12 months before a fourth Validation, i.e. until 9 July 2021, to carry out corrective actions regarding license allocation (Requirement 2.2), license register (Requirement 2.3) and data quality (Requirement 4.9). The fourth Validation will also assess progress in meeting EITI Requirement 2.5 on beneficial ownership, as well as new provisions of the 2019 EITI Standard. The Board decided that STP should not be suspended given the number and nature of remaining gaps and the MSG’s good faith efforts to address these requirements.
Failure to achieve satisfactory progress in the fourth Validation will result in delisting in accordance with Article 6 of the EITI Standard. In accordance with the EITI Standard, STP’s MSG may request an extension of this timeframe or request that Validation commences earlier than scheduled.
São Tomé and Príncipe (STP) was admitted as an EITI Candidate in 2008. The second Validation of STP against the EITI Standard commenced on 8 March 2018. On 29 June 2018, the EITI Board found that STP had made “meaningful progress with considerable improvements” in implementing the 2016 EITI Standard. Three corrective actions were identified by the Board to be assessed in a third Validation commencing on 29 June 2019. These related to:
- License allocation (Requirement 2.2)
- License register (Requirement 2.3),
- Data quality (Requirement 4.9).
STP has undertaken the following activities to address the corrective actions:
- On 22 February 2019, the 2016-2017 EITI Report was published.
- On 13 December 2019, a pre-validation workshop was organised to discuss progress in addressing the corrective actions.
- On 14 December 2019, the MSG met to discuss progress on addressing the corrective actions from the second Validation.
- On 27 December 2019, the MSG shared a response received from ANP on addressing corrective actions on Requirements 2.2 and 2.3.
São Tomé and Príncipe’s third Validation commenced on 29 December 2019. The Secretariat assessed the progress made in addressing the three corrective actions established by the EITI Board. The EITI International Secretariat’s assessment is that São Tomé and Príncipe has not addressed the three corrective actions. The draft assessment was sent to the Multi-Stakeholder Group (MSG) on 1 April 2020. Following comments received on 11 May 2020, the assessment was finalised for consideration by the EITI Board.
The EITI Board agreed the following corrective actions to be undertaken by São Tomé and Príncipe. Progress in addressing these corrective actions will be assessed in a fourth Validation commencing on 9 July 2021:
In accordance with Requirement 2.2, ANP should disclose the process for awarding petroleum licenses including the technical and financial criteria and an explanation of any non-trivial deviations from the legal framework governing the award and transfers of petroleum licenses in the year under review. To strengthen implementation, ANP is encouraged to ensure that information about the process for awarding and transferring licenses, as well as actual awards and transfers is comprehensively disclosed in a timely manner on the government websites, such as that of the ANP. The MSG is encouraged to use the EITI reporting to aggregate and analyse publicly accessible information that is already systematically disclosed.
- In accordance with Requirement 2.3.b, São Tomé and Príncipe is required to maintain a publicly available register or cadastre system, including timely and comprehensive information on the date of application for each of the licenses of companies covered in the EITI Report. ANP is expected to implement its plan to overcome practical barriers to the disclosure of application dates. São Tomé and Príncipe is encouraged to engage with the Joint Development Authority (JDA) to ensure that comprehensive license information for the Joint Development Zone is publicly available.
In accordance with Requirement 4.9, São Tomé and Príncipe should demonstrate that the Independent Administrator’s ToR is aligned with the standard ToR and that MSG was adequately involved in the design of the EITI Report. The Independent Administrator should provide a clear statement related to the comprehensiveness and reliability of the reconciled financial data, in accordance with Requirement 4.9.a and the standard ToR for Independent Administrators To strengthen the implementation of Requirement 4.9, São Tomé and Príncipe is encouraged to seek to strengthen the auditing policies and practices of government entities and extractive companies, with a view to developing credible, routine, independent audit, applying international auditing standards, as a means of transitioning to systematic disclosures of payments and revenues.