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

Outcome of the Validation of Senegal

Decision number
2021-62
Decision basis
EITI Articles of Association 2019-2021, Article 12.1. ix)
20 October 2021

Board decision

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.

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

Corrective actions and strategic 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.

Scorecard for Senegal: 2021

Assessment of EITI requirements

  • Not met
  • Partly met
  • Mostly met
  • Fully met
  • Exceeded
Component View more
Score

The three components of Validation each receive a score out of 100, as follows:

Low 0-49
Fairly low 50-69
Moderate 70-84
High 85-92
Very high 93-100
View more

Outcomes and impact

99.5 Very high
Scorecard by requirement
Assessment
Assessment of EITI Requirements

Validation assesses the extent to which each EITI Requirement is met, using five categories. The component score is an average of the points awarded for each requirement that falls within the component.

Outcomes and impact

Effectiveness and sustainability indicators

3.5

1.5 Work plan

100

The 2021 work plan and planned outcomes are specific and address national priorities which consist in “accompanying the government in operationalising transparency mechanisms to optimise governance that allows citizens to have oversight of the outcomes of the management of the extractive industries ». The 2021 work plan is the last operational phase of the 2017-2021 strategic plan whose overall objective is to strengthen systematic disclosure into the government’s system and improve the quality of data. This aligns with the national priorities set out in the extractive sectoral policy letters which to create "Openness and transparency of the extractive sector, and through them, leverage management based on quality information accessible to as many people as possible so as to promote full collaboration between all stakeholders”. The work plan includes a logical framework and establishes an effective tool for planning and monitoring activities, and it is structured following results-based management principles. Indicators are included to enable monitoring of progress. The MSG has set up a monitoring framework “Monitoring and Evaluation Committee” to follow up on its work plan. It includes activities that seek to improve EITI communication and dissemination outreach tools, build stakeholders’ capacity and engagement, as well as legislative advocacy. Overall 2017-2021 work plan outcomes align with the country’s various sectoral policies including on mining, Oil and Energy and the environment, which are summarised in Senegal’s Development Plan “ Sénégal Plan Emergent”. In addition, the plan clearly addresses the scope of EITI disclosures and the policy changes that the MSG wishes to see result from the EITI. The plan includes an overall budget, costed activities and clear sources of funding for each. Senegal has exceeded the requirement by setting up a “Monitoring and Evaluation Committee” linking its work plan to a monitoring framework. The Secretariat’s assessment is that requirement 1.5 has been exceeded given that all aspects of the requirement, including the encouraged aspects, have been addressed and the objective fulfilled.

7.1 Public debate

100

Senegal EITI has undertaken active, effective and innovative communication, outreach and dissemination efforts that enable evidence-based public debate on extractive industry governance, in line with the objective of the requirement. The EITI Reports and other Senegal EITI documents are comprehensible and actively promoted through regular ‘EITI Weeks’ public events, newspaper articles and audio-visual broadcasts. Senegal EITI has successfully increased the media’s awareness of extractives data and its capacity to use with focus on specific issues—topics considered priorities by national and local stakeholders. A total of 109 written and audio-visual productions relating to the 2019 EITI Report including 6 community programs for one hour per issue to discuss governance of the extractive sector (see e.g., broadcasts held in Malinke, Pulaar and Wolof). The language of activities varies according to regional needs, and Senegal EITI has developed different types of communication products to ensure that data is accessible to different groups. Community forums were held in local languages during the ‘EITI weeks’, where findings of EITI Reports are shared. Key communication materials have consistently been distributed at these events. EITI data is used by a wide range of actors including academics, civil society and parliamentarians leading to the fulfilment of the EITI Principles by contributing to wider public debate. Stakeholder consultations and the Validation submission demonstrate that EITI data is used to inform decision-making and drive reforms in extractive industry governance. A study commissioned by the MSG demonstrated that the majority of stakeholders polled considered the EITI’s impact on public debate to have been strong. An impact assessment of the EITI in August 2020 recommends improvements to the MSG in order to enhance the EITI’s impact on public debate by further improving the accessibility of information. However, stakeholder consultations and findings from the impact of the EITI study raised concerns that dissemination and capacity building activities target more the Dakar and capitals of extractive regions rather than focusing on affected communities leading to the lack of public debate in zones where extraction takes place. The Secretariat’s assessment is that all aspects of the Requirement 7.1, including the encouraged aspects, have been addressed and that the objective has been exceeded.

7.2 Data accessibility and open data

90

Senegal EITI has agreed and published an open data policy. The 2019 EITI Report and its summary, payments project by project and various 2019 annexes (12) are available in excel format through the open data portal. In addition, some contextual data for the 2019 report such as the contribution of the extractive industries to the economy (Requirement 6.3) and data on production (Requirement 3.2) are available in various formats including .xlsx, .csv, .json and .html, while beneficial ownership (requirement 2.5) and state participation (2.6) data are available in .csv and .xlsx. Export data (Requirement 3.3) is mainly disclosed through EITI sources (some figures are also available on the ANSD website, but in a less detailed format). Stakeholder consultations and the Validation template did not highlight any particular concern related to the accessibility of the data for analysis. The Secretariat’s assessment is that all aspects of the requirement have been addressed and that the objective to enable the broader use and analysis of information on the extractive industries has been fully met.

7.3 Follow up on recommendations

90

The MSG has undertaken significant efforts to strengthen the impact of EITI implementation by acting upon lessons learned. It has set up a systematic approach to follow up on recommendations from EITI reporting or Validation through the creation of an ad-hoc committee by the MSG to follow up on EITI recommendations and a Working Group at the Ministry of Finance and Budget. The MSG’s committee oversees implementation of recommendations and identifies remedy actions. The MSG has compiled the recommendations dating back to 2015 as part of their 2019 EITI Report. In total, 13 of the 25 strategic recommendations from the previous validation have been fully implemented, while several (but not all) recommendations from EITI Reports covering 2015-2018 have been fully implemented. The MSG’s impact assessment notes that SOEs and companies have fully implemented relevant EITI recommendations, while not all recommendations related to government agencies have yet been implemented. The MSG has successfully engaged with stakeholders to ensure implementation of recommendations including at the highest political levels such as a meeting with the President of the Republic of the Senegal around the EITI recommendations. The MSG’s capacity to engage with high-level authorities has been key to implementing recommendations, including on contract disclosure and the beneficial ownership register. Follow-up on recommendations is one of the key pillars of the 2021 EITI work plan. The Secretariat’s assessment is that Senegal has fully met the requirement’s objective to ensure that EITI implementation is a continuous learning process that contributes to policymaking based on the MSG regularly considering findings and recommendations from the EITI process and acting on those recommendations it deems are priorities.

7.4 Review of outcomes and impact of implementation

100

The MSG has undertaken efforts to review the outcomes and impact of the EITI that exceed the requirement. In addition to publishing annual progress reports covering 2018, 2019 and 2020, which include an assessment of progress on the five outcome areas, the MSG commissioned an impact study in 2020 that sought views from different stakeholders from 2013 to 2020. The study captures Senegal-EITI’s efforts to address nationally key priorities, mainstream the EITI into the government system and improve data quality as well as tackle legal constraints through advocacy, and broadly leverage institutionalisation of EITI Requirements in national legislation. The MSG’s efforts to take gender considerations and inclusiveness into account are captured in the impact study and the 2021 work plan. The MSG undertook consultations to give all stakeholders an opportunity to provide feedback on the EITI process and the impact of the EITI and has reflected their views through the 2020 impact study, 2019, 2018 annual reports (Requirement 7.4.b). In addition, stakeholders were able to provide feedback on the EITI process through outreach events. The Secretariat’s assessment is that all aspects of the requirement, including encouraged aspects, have been addressed and that the objective of regular public monitoring and evaluation of implementation that ensures the EITI’s accountability has been exceeded.

Stakeholder engagement

90 High
Scorecard by requirement
Assessment
Assessment of EITI Requirements

Validation assesses the extent to which each EITI Requirement is met, using five categories. The component score is an average of the points awarded for each requirement that falls within the component.

Multi-stakeholder oversight

1.1 Government engagement

90

Senior government officials, including President Macky Sall and key government Ministers, have regularly expressed public support for the EITI in the 2017-2021 period. A senior government official has consistently been in place to lead EITI implementation, with changes in 2017 and 2019. EITI is featured prominently in Senegal’s letter of intent to join OGP (its first national action plan is under development). The government is fully, actively and effectively engaged in the EITI process. The Senegal EITI secretariat, which has high capacity and commitment, is hosted under the Office of the President of the Republic. Government officials including the MSG Chair and officials up to President Macky Sall have regularly intervened to resolve bottlenecks in EITI implementation, for instance in ensuring the publication of all extractive contracts, the establishment of an online oil and gas cadastre and an EITI open data portal. The government has played an active role in following up on EITI recommendations, including in establishing a dedicated working group within the Ministry of Finance. The government has provided consistent funding for EITI implementation, which increased by 25% from 2018 to 2020 and is institutionalised in the government budget. Relevant government entities and parliamentarians are represented on the MSG and regularly participate in all aspects of EITI implementation. Government agencies, including those not directly represented on the MSG, have been engaged in the provision of EITI data. Government MSG members have ensured regular outreach to agencies not directly represented on the MSG, including to solicit their input in the annual EITI work plan and the MSG’s review of outcomes and impact. There is evidence of regular use of EITI data by various government entities and officials, including in press statements and government reports, with a view to generating public debate. There was consensus among stakeholders consulted that the government’s engagement at both political and operational levels was public and effective. The Secretariat’s assessment is that the requirement’s objective of full, active, and effective government lead for EITI implementation has been fulfilled.

1.2 Industry engagement

90

The industry constituency is fully, actively, and effectively engaged in all aspects of EITI implementation. The MSG includes company representatives that reflect the industry’s structure, including four members from mining and quarrying and two members from oil and gas. Most industry MSG members actively participate in all aspects of EITI implementation, with some weaknesses in MSG attendance by a minority of mining, oil and gas company representatives. The constituency has been proactive in replacing representatives that are not able to participate in MSG meetings. There are clear mechanisms for coordination of the broader constituency, including through the Chamber of Mines and the Upstream Oil and Gas Companies Consultation Framework. Consultations indicate that most companies view EITI as more than a compliance exercise, with scope for influencing policy-making and public debate particularly on the emerging oil and gas sector. The broader constituency has provided input to key EITI documents including the annual work plan and the MSG’s annual assessment of outcomes and impact. There is evidence of use of data by companies and industry associations in both the mining and petroleum sectors. There is an enabling environment for company participation in the EITI. The constituency has not highlighted any barriers to its participation in all aspects of implementation, both in the ‘Stakeholder engagement’ template and in consultations. All material companies (26 in 2019) have participated in EITI reporting. The government has issued executive decrees and enacted legislative changes to support EITI implementation in Senegal, including in the 2016 Mining Code and the 2019 Petroleum Code. Over the years, government officials have followed up with companies to encourage full participation in EITI reporting as well as beneficial ownership disclosures.

1.3 Civil society engagement

90

Evidence and stakeholder consultations indicate that the Civil society constituency is fully and effectively engaged. The nomination procedure has been codified and it publicly available on the website of Senegal ITIE. This new process seems to have been followed in practice during the last round of nomination in 2021. The Publish What You Pay Coalition is leading the constituency, with four seats reserved to the members of the coalition, and three seats distributed to other organisations. The constituency contributed to strengthen engagement, outreach, and coordination during the period under review. There is evidence of regular outreach by MSG members to the broader constituency, even if this has not generated significant feedback or input. Civil society in its broader sense uses and disseminates EITI data in research, including at the local level. There is no evidence of any barriers to civil society participation or input to the EITI process related to freedom of association, expression, operation, or access to public decision-making. There was consensus among stakeholders consulted that the constituency had undertaken some efforts to expand the group to newer organisations, although most of the seven seats are currently held by organisations with a long experience with the EITI. Thus, the Secretariat’s assessment is that all required aspects of the requirement have been addressed and the requirement’s objective has been fulfilled.

1.4 MSG governance

90

The MSG is a mature institution and includes self-appointed representatives from each stakeholder group with no suggestion of interference or coercion. Nominations procedures for industry and civil society have been publicly codified. The mechanism for civil society nominations on the MSG is open to the public and CSO members of the MSG are operationally and in policy terms independent from government and companies. Information on nominations procedures is publicly available on the national EITI website. The ToR for the MSG addresses the requirements of the EITI Standard, and stakeholders have not highlighted any significant deviations from the ToR in practice. Meetings are convened with sufficient advance warning and MSG members generally appear to have sufficient time to review documents ahead of meetings. Attendance of most MSG members is consistent. The MSG’s per diem policy is clearly described on the Senegal EITI website and there do not appear to be any deviations in practice.

Transparency

90.5 High
Scorecard by requirement
Assessment
Assessment of EITI Requirements

Validation assesses the extent to which each EITI Requirement is met, using five categories. The component score is an average of the points awarded for each requirement that falls within the component.

Overview of the extractive industries

3.1 Exploration data

90

Senegal has addressed all aspects of this requirement: an comprehensive overview of the mining sector is available on the Senegal EITI website. It includes the most recent developments (2021), a brief history and a summary of the main present / past projects. A similar presentation is made about the nascent hydrocarbon sector.

6.3 Contribution of the extractive sector to the economy

100

Senegal has exceeded the objective of this requirement by publishing the extractive industries’ contribution, in absolute and relative terms, to GDP, government revenues, exports and employment, through systematic disclosures. While Senegal’s EITI reporting has not included estimates of the informal sector’s contribution to the extractive industries, public reports on the government’s statistics agency’s website (ANSD) provide estimates of informal activities. Although the 2019 EITI Report presents the economic contribution of the extractive sector in a clearer and more accessible manner, the website of the ANSD contains all the information listed under Requirement 6.3.

Legal and fiscal framework

2.1 Legal framework

90

Senegal has addressed all aspects of this requirement by ensuring that Senegal’s EITI reporting summarises descriptions of the legal environment and fiscal regime for mining, oil and gas, including the roles of government entities, the level of fiscal devolution and ongoing of planned reforms in oil and gas, rather than mining. Government websites provide some of this information in a dispersed manner, including updates on ongoing reforms in the mining sector. The Secretariat’s assessment is that Senegal has fully addressed the requirement’s objective but has not yet exceeded the requirement given that the majority of this information is not yet systematically disclosed on government and company websites.

2.4 Contracts

100

Senegal has exceeded the objective of Requirement 2.4 by comprehensively disclosing all contracts and licenses for the 1979-2021 period, using the EITI platform to improve the accessibility of information. All aspects of the Requirement have been addressed, including the encouraged aspects of disclosing all historical contracts. State contract disclosure practices are aligned with policy, which the MSG has documented. The MSG has compiled a comprehensive list of all contracts and associated licenses, indicating the public accessibility of each. The Secretariat’s assessment is that Senegal has exceeded the objective of the requirement given the accessibility of this data, and its relevance to public debate.

6.4 Environmental impact

Not assessed

Senegal has mostly met the objective of this requirement. The legal framework relative to environmental management is addressed in the 2019 EITI Report and the environmental contributions are published, including the procedures for Environmental Impact Assessments. The Ministry of Environment website discloses relevant legal documents and procedures as well as a description of the general impact of Climate Change on Senegal and the country’s objective of greenhouse gases reduction. However, there is little evidence of public disclosure of the evaluations performed on environmental impacts of extractive projects or the monitoring of extractive companies’ environmental obligations in practice. Environmental expenditures are disclosed in Annex 8, which does not seem to distinguish between mandatory and voluntary expenditures nor to disaggregate the transactions by revenue stream. The distinction between voluntary and mandatory environmental tax has been clarified after consultation with the Ministry of Environment, with mandatory expenditures consisting of payments to the rehabilitation funds (Fonds de rehabilitation) and environmental and social management plans (Plan de gestion environnementale et sociale) while voluntary expenditures consist of institutional support (‘Appui institutionnel’). It is possible to identify most of the individual environmental payments in the reporting templates of the material companies provided in the annexes, and therefore to disaggregate the environmental payments/expenditures by revenue stream. Several environmental mechanisms, such as the rehabilitation funds or the pollution tax do not seem to be currently operational, and no contributions have been noted in 2019. Thus, the Secretariat’s assessment is that the requirement’s objective has not yet been achieved that Requirement 6.4 should remain as not assessed in order not to penalise Senegal for gaps in progress towards an aspect of the EITI Standard that is only encouraged.

Licenses

2.2 Contract and license allocations

60

Senegal has mostly met the objective of this requirement by providing a public overview of awards and transfers of oil, gas and mining licenses, the statutory procedures for license awards and transfers and an attempt at assessing whether these procedures are followed in practice. Senegal’s EITI reporting has provided annual disclosures of the numbers and identities of licenses awarded and transferred, the general award and transfer procedures and has been transparent about the lack of technical and financial criteria until the publication of the Ministry of Mines and Geology’s Procedural Manual and the 2020 Decree implementing the 2019 Petroleum Code. The MSG has prepared diagnostic reports on licensing practices in the mining sector, as a means of informing public policy making and reforms. All the 97 mining license awards have been reviewed by an independent consultant. The results, including the assessment of non-trivial deviations, are available in the annex 3 of the study. Based on the review, the MSG has also made recommendations to licensing authorities in Senegal, such as using the newly adopted manual of procedures to assess future awards and transfers of extractive licenses. However, the Secretariat’s assessment is that the MSG’s assessment of non-trivial deviations in practice did not fulfil the MSG’s own Terms of Reference for this diagnostic assessment, raising concerns over the comprehensiveness of the study’s findings, given the lack of availability of documentation related to some of the license awards reviewed. Given the lack of new oil and gas license awards and transfers in 2019, the MSG did not carry out the same type of diagnostic work on petroleum license awards and transfers, either for 2019 or earlier periods. Therefore, the Secretariat’s assessment is that the objective of Requirement 2.2 has not yet been fulfilled given that Senegal EITI’s review of non-trivial deviations in the mining sector has not yet been replicated in the oil and gas sector, despite significant public attention to petroleum licensing practices.

2.3 Register of licenses

100

The two new cadastral systems with online portals in both the petroleum and mining sectors, launched in May and June 2021, respectively, has comprehensively addressed all aspects of Requirement 2.3. The development of these cadastral portals took several years (from 2018) given the establishment of government systems involved. Senegal has exceeded the objective of this requirement to ensure the public accessibility of comprehensive information on property rights related to extractive projects by the timeliness and accessibility of the data on the two new cadastre portals for mining and petroleum.

Ownership

2.5 Beneficial ownership

90

Senegal has fully met the requirement’s objective of enabling the public to know who ultimately owns and controls the companies operating in the country’s extractive industries and to help deter improper practices in the management of extractive resources. All aspects of the initial criteria for Validation of Requirement 2.5 have been addressed, including establishing an appropriate legal framework and reporting practices for beneficial ownership disclosures. The MSG has published an assessment of the comprehensiveness and reliability of beneficial ownership disclosures by material companies included in the scope of reconciliation for 2019, and has published an assessment of disclosures to date by all companies after the start of the Validation in accordance with Requirement 2.5.c. Out of the 284 license holders in the extractive sector, 13 beneficial ownership declarations have been submitted and five effectively registered by the commercial courts (“greffes du tribunal du commerce”). Requests for beneficial ownership disclosures appear to have been sent to all companies holding or applying for extractive licenses, since February 2021. The cost of information on legal owners and beneficial owners (XOF 2500 / EUR 4 per company) is not considered a constraint by stakeholders consulted. In accordance with Requirement 2.5.f.iii, links to the stock exchange filings of the 22 extractive companies in Senegal that are wholly-owned subsidiaries of publicly listed companies have been disclosed through the comments of the MSG.

State participation

2.6 State participation

90

Senegal seems to have achieved the objective of this Requirement. Most of the information required by Requirement 2.6 is available in the 2019 EITI Report and in the 'State Enterprises' section of the Senegal EITI website. With regard to the statutory rules relating to the financial relations of state-owned enterprises, in particular the clarification of the rules relating to retained earnings, in accordance with requirement 2.6.ai, the publication of the financial statements of PETROSEN for the years 2014-2019 adequately provided information about PETROSEN’s relation with the state for the period under review. As for the ability of state-owned enterprises to raise funds from third parties and a possible sovereign guarantee, this point was clarified through the publication of an explanatory note concerning the two major gas projects, Grande Tortue and Sangomar, as well as during consultations with stakeholders (Ministry of Petroleum, PETROSEN, College of Industry).

4.2 In-kind revenues

Not applicable

Senegal appears to have fully met all aspects of the requirement 4.2. The state’s and PETROSEN statutory in-kind revenue entitlements are commercialised by the operator of the sole production license, FORTESA, who transfers the proceeds in cash to the government. The volume of gas constituting the State's production share and the volume corresponding to the share attributable to PETROSEN are disclosed in the EITI report, as well as the value corresponding to the sale of these shares. The transactions were reconciled between the FORTESA company and the State / PETROSEN. The annex 24 of the 2019 EITI report also contains additional information on the entirety of the sale of gas in-kind, such as the identity of the buyer, the tariff price, contract number, date, all disaggregated by individual delivery. As these declarations are included in the declaration form sent to companies, they benefit from the same level of data assurance as the rest of financial disclosures.

4.5 SOE transactions

90

Senegal seems to have fully met all aspects of the Requirement 4.5. The revenue streams perceived by the state companies are correctly described in the 2019 EITI Report. It should be noted that only PETROSEN collects revenues. Regarding transfers between the State and MIFERSO/PETROSEN, no payment (apart from regular taxation) has been made to the State from PETROSEN or MIFERSO. The State granted an operating subsidy to MIFERSO, demonstrated non-material by the MSG (less than 0.3% of total income). The MSG has also produced a note explaining the nature and status of three short-term debts from shareholders (including the State) contracted by MIFERSO and appearing in its audited financial statements. Regarding the completeness and reliability of the data, MIFERSO and PETROSEN have provided reporting templates certified by an auditor and signed by management, in compliance with the required quality assurance.

6.2 SOE quasi-fiscal expenditures

Not applicable

In addition of reviewing audited financial statements, the MSG has reviewed the procurement plan of the two SOEs, MIFERSO and PETROSEN, and concluded that there are currently no quasi-fiscal expenditures in the extractive sector.

Production and exports

3.2 Production data

90

Senegal has achieved the objective of this requirement. Extractive production data are disclosed, in volume and value, disaggregated by commodities but also by project. Production data is available on the Senegal EITI open data portal, disaggregated by raw material but not by project.

3.3 Export data

90

Senegal has achieved the objective of the requirement. Extractive export data is disclosed, in volume and value, disaggregated by commodity but also by project and country of destination. Export data is also available on the ANSD portal, but at a lower level of sophistication than the EITI Report.

Revenue collection

4.1 Comprehensiveness

90

Senegal has fully met the objective of this requirement. The MSG’s decisions on materiality thresholds and scope of EITI reporting are published on the EITI Senegal website, and no revenue stream appears to have been excluded. Material companies, revenue streams and government agencies are clearly identified in the 2019 EITI Report, and no company or government agency failed to provide their reporting template. The full government disclosure from the extractive sector, including non-material revenues, is also clearly disclosed by the government and disaggregated by revenue stream and by company. The coverage for the reconciliation exercise is 96%. The audited financial statements of material companies are also made public, except for three.

4.3 Infrastructure provisions and barter arrangements

90

Senegal has fully met the objective of this requirement. The barter-type agreement is for the government to give up its option to acquire a 10% stake in the Oromin Joint Venture Group (OJVG) mining company in exchange for the company committing to US$10 million in in-kind social expenditures (agreed with the government and the host community) over a period of several years. In practice, EITI Senegal has disclosed the social expenditures for 2019 under this agreement, which consist of office and IT expenses for public administration. Based on clarifications published on the EITI Senegal website in June 2021 and consultations with government and company stakeholders, the Secretariat understands that PETROSEN's financing arrangements with Kosmos, BP and Woodside Petroleum do not constitute loans in exchange for deliveries of physical crude oil or natural gas commodities. The Secretariat’s assessment is therefore that these financing arrangements of PETROSEN are not covered by Requirement 4.3.

4.4 Transportation revenues

Not applicable

For the mining sector, transport is provided by the companies' own means. The transport activity is therefore taxed within the framework of the activities of said companies and the related taxation is considered in the mining revenues collected by the government. For the oil and gas sector, no payment for the use of the PETROSEN pipeline was made in 2019. This seems to be confirmed by the absence of a declaration from PETROSEN of payment for the lease for the transport of the gas.

4.7 Level of disaggregation

90

The 2019 EITI Report describes the MSG's definition of a project and presents reconciled financial data disaggregated by government entity, revenue stream, company and (where relevant) project. The project-disaggregated data is available on the national website and is included in the 2019 summary data template.

4.8 Data timeliness

100

Senegal EITI data has been published in a sufficiently timely manner, with financial data published within less than one year of the fiscal period covered, for example the EITI Report covering 2019 was published in December 2020. This supports the Secretariat’s assessment that Senegal has exceeded the requirement’s objective of ensuring that public disclosures of company payments and government extractive revenues are sufficiently timely to be relevant to inform public debate and policy making has been exceeded.

4.9 Data quality and assurance

90

Senegal has fulfilled the requirement’s overall objective and has addressed all aspects of the requirement, ensuring that appropriate measures have been taken to ensure the reliability of disclosures of company payments and government revenues from oil, gas and mining. Although the public sector audit reports from the Cour des Comptes are not yet available for the period under review (2019), the 2019 EITI Report does contain the Independent Administrator’s assessment of comprehensiveness and reliability of the reconciled financial data. Senegal EITI could do more to develop recommendations for the EITI to contribute to strengthening routine government and company audit and assurance systems and practices.

Revenue management

5.1 Distribution of revenues

90

Senegal has fully met the requirement’s overall objective of ensuring the traceability of extractive revenues to the national budget and ensuring the same level of transparency and accountability for extractive revenues that are not recorded in the national budget. The 2019 EITI Report describes the types of extractive revenues not recorded in the national budget, consisting primarily of extractive revenues collected and retained by the SOE PETROSEN. In June 2021, PETROSEN published its audited financial statements for the 2015-2019 period, providing a financial report describing its management of extractive revenues not recorded in the national budget.

5.3 Revenue management and expenditures

Not assessed

Senegal has addressed some aspects of this requirement, primarily through EITI reporting. However, while the MSG has provided some information on revenue management and expenditures, it has not addressed aspects of the requirement related to ensuring accountability in management of earmarked revenues, budget assumptions and projections. The public sector audit reports from the Cour des Comptes are not yet publicly accessible for the period under review. It cannot yet be found that Senegal has fully met all technical aspects and the overall objective of this requirement. Thus, the Secretariat’s assessment is that the requirement’s objective has not yet been achieved that Requirement 5.3 should remain as not assessed in order not to penalise Senegal for gaps in progress towards an aspect of the EITI Standard that is only encouraged.

Subnational contributions

4.6 Subnational payments

Not applicable

The Secretariat’s assessment is that Requirement 4.6 was not applicable to Senegal in 2019. The only supposedly subnational payment is the "Patente", which is not specific to the extractive sector. The total amount is XOF 2,146,612,383, or about 1.5% of total income, and has been reconciled This tax is however collected by the public treasury under common law conditions and then transferred to the benefit of the local governments where extractive companies are located, thus qualifying it more as a transfer. The 2019 EITI Report further notes that the “Patente” is to be replaced by a new tax for future reporting years.

5.2 Subnational transfers

90

The Secretariat’s assessment is that Senegal has fully addressed all technical aspects of the requirement. While subnational transfers were not yet operational in either the mining or petroleum sectors in 2019, Senegal EITI has provided a comprehensive description of the statutory mechanisms for subnational transfers and disclosed the calculated subnational transfers that should have been executed in 2019 according to the revenue sharing formula. The Secretariat considers that the requirement’s objective has been fulfilled, on which there appeared to be consensus during stakeholder consultations.

6.1 Social and environmental expenditures

90

Senegal has fully met the objective of this requirement. Mandatory social expenditures are disclosed in Annex 6 of the 2019 EITI Report with details including the name of the company, the nature of the payment (in kind or in cash), a description of the type of expenditure and the beneficiary. Senegal has gone beyond the required disclosure by providing similar details for voluntary social expenditures in Annex 7. Regarding environmental payments to government, it has been reported that the companies in the oil and gas sector refused to pay the only environmental tax, surface tax (“taxe superficiaire”), arguing that the calculation of the tax was not adapted to the offshore sector and would lead to unreasonable amounts due. This revenue stream was therefore only paid by mining companies in 2019 and has been comprehensively reconciled in the 2019. Mandatory environmental expenditures, including contributions to environmental rehabilitation funds and expenditures under environmental and social management plans are covered under Requirement 6.4.

Countries
Senegal