Senegal has achieved a very high overall score in implementing the 2019 EITI Standard

20.10.2021
Decision 2021-62/BM-51
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Board decision in full

Senegal has achieved a very high overall score in implementing the 2019 EITI Standard (93 points). The overall score reflects an average of the three component scores on Stakeholder engagement, Transparency and Outcomes and impact.

The EITI Board commends Senegal for achieving a very high score on “Outcomes and impact” (99.5 points). EITI data has been used to inform public debate and Senegal EITI has followed up on recommendations at the highest political levels, including with the President of Senegal. The MSG has regularly taken stock of the outcomes and impact of implementation, and there is extensive evidence of Senegal EITI feeding into tangible reforms in government policies and industry practices. Senegal’s EITI outreach activities have adapted to the impacts of the COVID-19 pandemic to continue to strive to make extractive data accessible. Senegal was awarded three and a half additional point for the effectiveness and sustainability of EITI implementation.

On “Transparency”, Senegal reached a high score (91 points). EITI Senegal has played a key role not only in disclosing new information to the public but also in improving the accessibility of systematically disclosed information spread out over multiple government and company websites, such as beneficial ownership of license information. Modern mining and petroleum cadastral systems have been established, beneficial ownership information is in process of being added to the commercial register and the oil and gas state-owned enterprise Petrosen has begun regularly publishing its audited financial statements as a result of EITI implementation. New areas of the 2019 EITI Standard such as project level reporting have been comprehensively implemented in a timely manner. In many areas, EITI Senegal has gone beyond the mapping of existing disclosures to conduct a diagnostic of current governance practices, such as in mining licensing and subnational transfers of extractive revenues. There is strong public demand for EITI data on both the established mining sector and the nascent oil and gas industry, which creates opportunities for EITI Senegal to expand its coverage of areas of increasing public interest such as on the environmental impact and local content contribution to the extractive industries. While Senegal EITI’s diagnostic work on licensing practices in the mining sector are exemplary, it has yet to replicate this detailed review to the oil and gas sector despite significant public outcry over allegations of improper licensing activities in the petroleum sector that arose in 2019, related to licenses awards several years earlier.

Senegal achieved a high component score on Stakeholder engagement (90 points). The government, civil society and extractive companies are actively engaged in EITI implementation. The three constituencies have institutionalised their EITI engagement and appear to be functioning in an efficient and dynamic manner, maintaining regular communication with non-MSG members. In the context of broad-based demand and interest for information on the extractive sector, stakeholders engaged in the EITI are considered authoritative sources of information and reliable technical partners for stakeholders including government entities, industry associations and researchers.

The Board has determined that Senegal will have until a next Validation commencing on 1 October 2024 to carry out a corrective action regarding contract and license allocations (Requirement 2.2).

Failure to demonstrate progress on “Transparency” in the next Validation may result in temporary suspension in accordance with Article 6 of the EITI Standard. In accordance with the EITI Standard, Senegal’s MSG may request an extension of this timeframe or request that Validation commences earlier than scheduled.

Validation scorecard

Component & module

EITI Requirement

Progress

Score

Outcomes and impact

Very high

99.5/100

Extra points

Effectiveness and sustainability indicators

3.5

Outcomes and impact

Work plan (#1.5)

Exceeded

100

Public debate (#7.1)

Exceeded

100

Data accessibility and open data (#7.2)

Fully met

90

Recommendations from EITI (#7.3)

Fully met

90

Outcomes & impact (#7.4)

Exceeded

100

Stakeholder engagement

High

90/100

Multi-stakeholder oversight

Government engagement (#1.1)

Fully met

90

Industry engagement (#1.2)

Fully met

90

Civil society engagement (#1.3)

Fully met

90

MSG governance (#1.4)

Fully met

90

Transparency

High

91/100

Overview of the extractive industries

Exploration data (#3.1)

Fully met

90

Economic contribution (#6.3)

Exceeded

100

Legal and fiscal framework

Legal framework (#2.1)

Fully met

90

Contracts (#2.4)

Exceeded

100

Environmental impact (#6.4)

Not assessed

-

Licenses

Contract and license allocations (#2.2)

Mostly met

60

License register (#2.3)

Exceeded

100

Ownership

Beneficial ownership (#2.5)

Fully met

90

State participation

State participation (#2.6)

Fully met

90

In-kind revenues (#4.2)

Not applicable

-

SOE transactions (#4.5)

Fully met

90

SOE quasi-fiscal expenditures (#6.2)

Not applicable

-

Production and exports

Production data (#3.2)

Fully met

90

Export data (#3.3)

Fully met

90

Revenue collection

Comprehensiveness (#4.1)

Fully met

90

Barter agreements (#4.3)

Fully met

90

Transportation revenues (#4.4)

Not applicable

-

Disaggregation (#4.7)

Fully met

90

Data timeliness (#4.8)

Exceeded

100

Data quality (#4.9)

Fully met

90

Revenue management

Distribution of revenues (#5.1)

Fully met

90

Revenue management & expenditures (#5.3)

Not assessed

-

Subnational contributions

Direct subnational payments (#4.6)

Not applicable

-

Subnational transfers (#5.2)

Fully met

90

Social and environmental expenditures (#6.1)

Fully met

90

Overall score

 Very high

93/100

Corrective actions and recommendations

The EITI Board agreed the following corrective actions to be undertaken by Senegal. Progress in addressing this corrective action will be assessed in the next Validation commencing on 1 October 2024:

  1. In accordance with Requirement 2.2, Senegal should ensure that an overview of license award and transfer procedures is publicly disclosed, including an overview of any non-trivial deviations from statutory procedures in practice. Senegal may wish to further expand its use of EITI reporting to assess the efficiency of license and contract awards and transfers in the oil and gas sector, for instance by replicating the study conducted on the license awards and transfers in the mining sector. This would allow to reinforce its annual review of non-trivial deviations in the practice of licensing activities, with a view to ensuring regular input to policy-making and public debate on license management in the nascent oil and gas sector, a topic of high public interest in Senegal.

Senegal is encouraged to consider the following recommendations to strengthen EITI implementation:

Outcomes and impact

  1. To strengthen implementation, Senegal is encouraged to reflect in its annual EITI work plan plans to monitor implementation of legal reforms and to regularly reconsider the scope of EITI disclosures, building on the EITI’s input to recent legislative and regulatory reforms in recent years.

  2. To further strengthen the EITI’s impact on public debate, Senegal is encouraged to tailor outreach and communications to specific stakeholders, such as local communities, parliamentarians, academics, civil society and media. Senegal is encouraged to further consider the information needs of stakeholders based on considerations such as gender, revenue management, environmental impact and climate change to inform the scope of EITI implementation.

  3. To strengthen the accessibility and usability of data, Senegal is encouraged to ensure that extractive sector data used in all charts and tables published by Senegal EITI is systematically published in machine readable and inter-operable format, and to code or tag EITI disclosures and other data files so that the information can be compared with other publicly available data in accordance with Requirement 7.2.d. In addition, the MSG could ensure wider use of EITI data to inform public debate, including in identifying corruption risks in licensing throughout the entire awards process and improving the availability of all extractive sector data in open format in a timely manner is also encouraged to facilitate data analysis.

Stakeholder engagement

  1. To strengthen implementation, the government may wish to consider ways of strengthening the framework for canvassing the broader government constituency for views as part of the MSG’s annual review of outcomes and impact.

  2. To strengthen implementation, the industry constituency could consider means of further strengthening their systematic disclosures of EITI data through companies’ routine publications, thereby integrating EITI disclosures into their annual public disclosure cycle.

  3. To further strengthen civil society engagement, the civil society constituency is encouraged to sustain efforts to further broaden the constituency and to ensure that voices critical of the management of extractive industries are adequately represented.

Transparency

  1. To strengthen implementation, Senegal is encouraged to improve accessibility of information on the contribution of the extractive industries to the economy through routine government systems.

  2. To strengthen implementation, the government is encouraged to publish environmental impact studies related to extractive activities on the DEEC website. To strengthen the monitoring of environmental impact of the nascent gas sector and the mining sector and to answer to significant interest from the public, Senegal could consider ways to document and highlight the non-payment of several environmental payments/expenditures, such as the provision to the rehabilitation funds, the pollution tax or the surface tax in the oil and gas sector.

  3. To prepare for the second phase of Validation of Requirement 2.5 from January 2022 onwards, Senegal is required to ensure that the beneficial ownership of all companies holding or applying for a mining, oil and gas license is comprehensively and reliably disclosed as of January 2022.

  4. To strengthen systematic disclosures, extractive SOEs are encouraged to ensure that the publication of their audited financial statements on their respective websites are institutionalised and sustained on an annual basis.

  5. To strengthen implementation, the EITI could encourage the government agencies (ANSD for instance) to publish themselves the production and export data, at the same level of disaggregation as the EITI Report.

  6. To strengthen implementation and further improve the assessment of Requirement 4.3, Senegal is encouraged to consider means of ensuring systematic disclosures of information on barter-type infrastructure arrangements through relevant company and government systems.

  7. To strengthen implementation and ensure the EITI provides a tool for strengthening prevailing audit and assurance practices, Senegal could consider using annual EITI reporting as a tool for disclosing a detailed assessment of audit and assurance practices in both public and private sectors, with a view to issuing recommendations for reform. Senegal may also wish consider alternatives to conventional EITI reconciliation as a means of ensuring comprehensive and reliable disclosures of company payments and government revenues from the extractive industries, potentially participating in the EITI’s global pilot on alternative approaches to EITI reporting.

  8. To strengthen implementation, Senegal could consider ways of strengthening systematic disclosures related to the categorisation of extractive revenues as being, or not, recorded in the national budget as well as of the management of extractive revenues not recorded in the government’s budget.

  9. To strengthen implementation in accordance with Requirement 5.3, Senegal is encouraged to use its EITI disclosures to ensure greater transparency in the accountability mechanisms related to earmarked extractive revenue, and to disclose any further information related to the budget cycle, production and commodity price assumptions and revenue sustainability, resource dependence, and revenue forecasting. Senegal may wish to consider ways of strengthening systematic disclosures related to these issues to respond to robust public interest in this type of information in light of public debate on the energy transition.

  10. To strengthen implementation, Senegal is encouraged to consider ways of ensuring the systematic disclosure of all mandatory and voluntary social expenditures and environmental payments to government to respond to robust public demand for this type of information.

  11. Given the importance of the “Patente” for the local communities, Senegal may wish to use EITI reporting to closely monitor the transition towards the new payment flow in the revised Mining Code.

The government and the MSG are encouraged to consider these recommendations, and to document the MSG’s responses to these recommendations in the next annual review of outcomes and impact of EITI implementation.

Background

Overview of the extractive industries

An overview of the extractive industries is accessible on the country page of the EITI website for Senegal.

History of EITI implementation

The history of implementation is accessible on the country page of the EITI website for Senegal.

Explanation of the Validation process

An overview of the Validation process is available on the EITI website. The Validation Guide provides detailed guidance on assessing EITI Requirements, while the more detailed Validation procedure include a standardised procedure for undertaking Validation by the EITI International Secretariat.

The International Secretariat’s country implementation support team include Christina Berger and Chiugo Aghaji, while the Validation team was comprised of Hugo Paret, Alex Gordy, Nassim Bennani, and Jean-Pierre Okenda.

Confidentiality

The practice in attribution of stakeholder comments in EITI Validation reports is by constituency, without naming the stakeholder or its organisation. Where requested, the confidentiality of stakeholders’ identities is respected, and comments are not attributed by constituency.

Timeline of Validation

The Validation of Senegal commenced on 1 July 2021. A public call for stakeholder views was issued on 1 June 2021. Stakeholder consultations were held virtually on 12-23 July. The draft Validation report was finalised on 19 August 2021. Following comments from the MSG on 16 September 2021, the Validation report was finalised for consideration by the EITI Board.

Resources

 

Keywords: Validation
Country: Senegal