Guyana has achieved a fairly low overall score in implementing the 2019 EITI Standard
Outcome of the Validation of Guyana
Guyana has achieved a fairly low overall score in implementing the 2019 EITI Standard (52 points). The overall score reflects an average of the three component scores on Stakeholder engagement, Transparency and Outcomes and impact.
The EITI Board commends Guyana for successfully establishing the country’s first functioning platform for multi-stakeholder discussions of the governance of the extractive industries. Guyana’s efforts to tailor the scope of its EITI implementation to address public demands for information beyond the extractive industries, to cover forestry and fisheries, is welcome.
The Board expresses concern over Guyana’s low score on Outcomes and impact (42 points). This reflects the ad hoc approach to outreach and dissemination, weaknesses in follow-up on EITI recommendations to deliver reforms and insufficient attention to the annual review of outcomes and impact, with a view to informing the annual EITI work plan. While the Board commends Guyana for its innovative efforts to undertake outreach during the pandemic, ensuring that a broad range of government, industry and civil society constituencies are consulted in developing the annual work plan would help ensure that the EITI is supporting national reform objectives.
On Transparency, Guyana reached a fairly low score (53.5 points). Guyana has made commendable efforts to use EITI implementation to ensure disclosures on areas of public interest, including contract transparency, commodity sales and environmental aspects of the extractive industries, reflecting priorities of civil society in particular. Guyana’s EITI reporting has shed some light on the government’s revenues from the extractive industries for the first time, although weaknesses in company reporting and taxpayer confidentiality constraints mean that only a minority of the government’s revenues have been disclosed through EITI to date to the levels of disaggregation and reliability required under the EITI. The Board urges Guyana to ensuring complete and reliable revenue disclosures as a basis to support the government’s public finance management reforms.
Guyana achieved a fairly low component score also on Stakeholder engagement (60 points). While civil society has been a driving force in implementation, the Board expresses concern over weaknesses in government and industry engagement in the EITI process, including in disclosures of required data. Weaknesses in the multi-stakeholder oversight of EITI implementation have led to challenges both in reporting and in ensuring that the EITI provides a meaningful forum for multi-stakeholder consensus-building. Ensuring a balance of views in developing objectives for EITI implementation could contribute to strengthening government and industry engagement. The Board urges the government to implement legal provisions for public participation in policy making for extractive sector governance, including in the implementation of legal provisions related to free, prior and informed consent in the extractive licensing process, with a view to ensuring full adherence to national policies and laws. Guyana EITI is encouraged to closely monitor implementation of these legal provisions.
The Board has determined that Guyana will have until a next Validation commencing on 1 April 2024 to carry out corrective actions regarding government engagement (Requirement 1.1), industry engagement (Requirement 1.2), MSG governance (Requirement 1.4), work plan (Requirement 1.5), contract and license allocation (Requirement 2.2), license registers (Requirement 2.3), contracts (Requirement 2.4), beneficial ownership (Requirement 2.5), state participation (Requirement 2.6), comprehensiveness (Requirement 4.1), transactions related to SOEs (Requirement 4.5), disaggregation (Requirement 4.7), data reliability (Requirement 4.9), distribution of revenues (Requirement 5.1), social and environmental expenditures (Requirement 6.1), SOE quasi-fiscal expenditures (Requirement 6.2), public debate (Requirement 7.1), data accessibility (Requirement 7.2), follow-up on EITI recommendations (Requirement 7.3) and the MSG’s review of outcomes and impact (Requirement 7.4). Failure to demonstrate progress on Outcomes and impact, Stakeholder engagement and 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, Guyana’s MSG may request an extension of this timeframe or request that Validation commences earlier than scheduled.
Corrective actions and strategic recommendations
The EITI Board agreed the following corrective actions to be undertaken by Guyana. Progress in addressing these corrective actions will be assessed in the next Validation commencing on 1 April 2024:
- In accordance with Requirement 1.5.a, Guyana is required to set EITI implementation objectives that are linked to the EITI Principles and reflect national priorities for the extractive industries. In accordance with Requirement 1.5.b, Guyana should ensure that the annual EITI work plan reflects the results of consultations with key stakeholders and the broader government, industry and civil society constituencies. To strengthen implementation, Guyana is encouraged to explore innovative approaches to extending EITI implementation to inform public debate about natural resource governance and encourage high standards of transparency and accountability in public life, government operations and in business.
- In accordance with Requirement 7.1, Guyana should ensure that EITI information is widely accessible, distributed and comprehensible, including by ensuring that it is written in a clear, accessible style and in appropriate languages and consider access challenges and information needs of different genders and subgroups of citizens. Guyana should ensure that outreach events, whether organised by government, civil society or companies, are undertaken to spread awareness of and facilitate dialogue about governance of extractive resources, building on EITI disclosures across the country in a socially inclusive manner. The communications strategy should include activities to encourage the analysis and use of EITI data disclosures.
- In accordance with Requirement 7.2, Guyana should agree a clear open data policy on the access, release, and re-use of EITI data. Guyana EITI should make EITI data available in an open data format online and publicise its availability. Government agencies and companies are expected to publish EITI data under an open license, and to make users aware that information can be reused without prior consent. To strengthen implementation, Guyana EITI is encouraged to make systematically disclosed data machine readable and inter-operable, 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 7.3, Guyana is required to take steps to act upon lessons learnt and to consider the recommendations resulting from EITI implementation, with a view to strengthening its impact on natural resource governance.
- In accordance with Requirement 7.4, Guyana is required to ensure that its annual review of the outcomes and impact of EITI implementation includes any actions undertaken to address issues that the multi-stakeholder group has identified as priorities for EITI implementation. The annual review of impact and outcomes must include a summary of EITI activities undertaken in the previous year and an account of the outcomes of these activities, an assessment of progress towards meeting each EITI Requirement, an overview of the multi-stakeholder group’s responses to and progress made in addressing the recommendations from reconciliation and Validation, an assessment of progress towards achieving work plan objectives, as well as a narrative account of efforts to strengthen the impact of EITI implementation on natural resource governance. All stakeholders should be able to participate in reviewing the impact of EITI implementation. To strengthen implementation, Guyana EITI is encouraged to document how it has taken gender considerations and inclusiveness into account.
- In accordance with Requirement 1.1, Guyana should ensure that the government is fully, actively and effectively engaged in all aspects of EITI implementation, including through ensuring sufficient technical and financial resources for all aspects of EITI implementation.
- In accordance with Requirement 1.2, Guyana should ensure that extractive companies are fully, actively and effectively engaged in all aspects of EITI implementation, including in the provision of EITI data as well as in its active participation in design of the EITI process, outreach and dissemination.
- In accordance with Requirement 1.4.b.ii, Guyana should ensure that the MSG undertakes effective outreach activities with civil society groups and companies, including through communication such as media, websites and letters, informing stakeholders of the government’s commitment to implement the EITI, and the central role of companies and civil society. The MSG should also widely disseminate the public information that results from the EITI process and encourage its analysis and use. In accordance with the Requirement 1.4.b.vi, the MSG should oversee the EITI reporting process and engage in Validation. To strengthen implementation, the MSG may wish to consider developing a capacity needs assessment and capacity-building action plan to ensure that all MSG members have adequate capacity to oversee all aspects of EITI implementation.
- In accordance with Requirement 2.4.c.ii, Guyana should clarify which license appendixes and attachments exist for licenses and contracts, publish a list of all active contracts and licenses, and indicate which are publicly available and which are not. In accordance with Requirement 2.4.c.iii, Guyana should publish an explanation for any deviations between disclosure practices and legislative or government policy requirements concerning the disclosure of contracts and licenses. In accordance with Requirement 2.4, by 1 January 2022, Guyana should ensure that any contracts and licenses in the extractive industries that are granted, entered into, or amended from 1 January 2021 are publicly and comprehensively disclosed. A list of all active contracts (including for exploration activities) should be disclosed including their amendments and information on how contracts are amended in the jurisdiction. EITI reporting should reflect activities undertaken to address barriers in their work plan, as to date lacking disclosures of mining contracts represents a significant gap in implementation. In accordance with Phase II of Requirement 2.4.b, Guyana is expected to have addressed any barriers to comprehensive disclosure of all license and contract documents.
- In accordance with Requirement 2.2, Guyana should ensure that information on mining, oil and gas license awards and transfers is publicly disclosed, including the identity of licenses transferred and companies involved, the process for transferring licenses, and the technical and financial criteria assessed. In accordance with Requirement 2.2.a.iv, Guyana is required to ensure public disclosure of its assessment of any material deviations from the applicable legal and regulatory framework governing license transfers and awards in license awards and transfers in the period under review by EITI reporting. The MSG’s assessment of non-trivial deviations in licensing practices should include a review of adherence to legal requirements for prior consent in the award of extractive rights, including free, prior and informed consent. The government is urged to develop capacities to implement free, prior and informed consent provisions of the licensing process in a meaningful manner.
- In accordance with Requirement 2.3, Guyana should establish a publicly available register or cadastre that provides information on all active licenses including names of licence holders, coordinates, dates of application, award and expiry, and commodities covered. In the interim, Guyana should ensure that this information, including dates of application and of expiry, are publicly disclosed for each active license held by companies included in the scope of reporting.
- In accordance with Requirement 2.5, Guyana 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. In the meantime, in accordance with Requirement 2.5.b, the government’s policy and multi-stakeholder group’s discussion on disclosure of beneficial ownership must be publicly documented. In accordance with Requirement 2.5.c, Guyana is required to ensure that Guyana EITI publishes an assessment of the comprehensiveness and reliability of beneficial ownership disclosures of all companies holding or applying for a mining or oil and gas license. Publicly listed companies, including wholly owned subsidiaries of companies listed on stock exchanges, are required to disclose the name of the stock exchange, and include a link to the stock exchange filings where they are listed, in accordance with Requirement 2.5.f.iii. Guyana is also required to ensure that legal ownership of extractive companies is publicly disclosed either through Guyana EITI reporting or through systematic disclosures, in accordance with Requirement 2.5.g. In accordance with Requirement 2.5.c, Guyana should seek to clarify any constitutional or significant practical barriers to the implementation of beneficial ownership disclosure, with a view to strengthen the country’s legal framework towards public disclosure of beneficial ownership.
- In accordance with Requirement 2.6, Guyana should ensure, where state participation in the extractive industries gives rise to material revenue payments, public disclosure of an explanation of the role of state-owned enterprises (SOEs) in the sector and prevailing rules and practices regarding the financial relationship between the government and SOEs. This should include disclosures of transfers, retained earnings, reinvestment and third-party financing related to SOE joint ventures and subsidiaries. Guyana should ensure public disclosures from the government and SOEs of their level of ownership in companies operating within the country’s oil, gas and mining sector, including those held by SOE subsidiaries and joint ventures, and any changes in the level of ownership during the reporting period. This information should include details regarding the terms attached to their equity stake. Where there have been changes in the level of government or SOE ownership during the EITI reporting period, the government and/or SOEs are expected to disclose the terms of the transaction, including details regarding valuation and revenues. Where the government and SOEs have provided loans or loan guarantees to mining, oil and gas companies operating within the country, details on these transactions should be disclosed. SOEs are expected to publicly disclose their audited financial statements. To strengthen implementation, Guyana is encouraged to ensure public disclosure of descriptions of the rules and practices related to SOEs’ operating and capital expenditures, procurement, subcontracting and corporate governance.
- To strengthen implementation in accordance with Requirement 4.2 that will become applicable for EITI reporting covering 2020 onwards, Guyana is required to disclose the volumes received and sold by the state (or third parties appointed by the state to sell on their behalf), the revenues received from the sale, and the revenues transferred to the state from the proceeds of oil, gas and minerals sold, where the sale of the state’s share of production of oil and gas or other revenues collected in kind is material. The published data must be disaggregated by individual buying company in accordance with Requirement 4.7. GYEITI, in consultation with buying companies, is expected to consider whether disclosures should be broken down by individual sale, type of product and price. In accordance with Requirement 4.2.b, Guyana is encouraged to disclose a description of the process for selecting the buying companies, the technical and financial criteria used to make the selection, the list of selected buying companies, any material deviations from the applicable legal and regulatory framework governing the selection of buying companies, and the related sales agreements. In accordance with Requirement 4.2.c, companies buying oil and gas from the state, including state-owned enterprises (or third-parties appointed by the state to sell on their behalf), are encouraged to disclose volumes received from the state or state-owned enterprise and payments made for the purchase of oil and gas. The published data could be disaggregated by individual seller, contract, or sale. In accordance with Requirement 4.2.d, where there are concerns related to data reliability and where practically feasible, Guyana EITI should consider further efforts to address any gaps, inconsistencies and irregularities in the information disclosed.
- In accordance with Requirement 4.5, Guyana must ensure that the EITI reporting process comprehensively addresses the role of SOEs, including comprehensive and reliable disclosures of material company payments to SOEs, SOE transfers to government agencies and government transfers to SOEs.
- In accordance with Requirement 6.2, where state participation in the extractive industries gives rise to material revenue payments, Guyana must include disclosures from SOEs on their quasi-fiscal expenditures. Guyana EITI is required to develop a reporting process with a view to achieving a level of transparency commensurate with other payments and revenue streams and should include SOE subsidiaries and joint ventures.
- In accordance with Requirement 4.1, Guyana should demonstrate that all material payments and revenues are comprehensively disclosed by government entities and extractive companies. In addition, Guyana should guarantee that any material omissions should be disclosed, and the non-reporting entities named. To strengthen implementation, Guyana is encouraged to consider mechanisms for systematic disclosures of government (non-tax) revenue data through routine government and company systems.
- In accordance with Requirement 4.7, Guyana should ensure that reconciled financial data in future EITI Reports is disaggregated by project for revenue streams that are levied on a per-project (rather than per-company) basis. To do so, Guyana should agree a definition of the term ‘project’ for the purposes of EITI reporting, determine the revenue streams that are imposed at the level of legal agreements rather at the company level, and document legal agreements that are substantially interconnected or overarching of several licenses.
- In accordance with Requirement 4.9.a, the EITI requires an assessment of whether the payments and revenues are subject to credible, independent audit, applying international auditing standards. In accordance with Requirement 4.9.b.iii and the standard Terms of Reference for the Independent Administrator agreed by the EITI Board, the MSG and Independent Administrator should:
- examine the audit and assurance procedures in companies and government entities participating in the EITI reporting process, and based on this examination, agree what information participating companies and government entities are required to provide to the Independent Administrator in order to assure the credibility of the data in accordance with Requirement 4.9. The Independent Administrator should exercise judgement and apply appropriate international professional standards in developing a procedure that provide a sufficient basis for a comprehensive and reliable EITI Report. The Independent Administrator should employ his/her professional judgement to determine the extent to which reliance can be placed on the existing controls and audit frameworks of the companies and governments. The Independent Administrator’s inception report should document the options considered and the rationale for the assurances to be provided.
- ensure that the Independent Administrator provides an assessment of comprehensiveness and reliability of the (financial) data presented, including an informative summary of the work performed by the Independent Administrator and the limitations of the assessment provided.
- ensure that the Independent Administrator provides an assessment of whether all companies and government entities within the agreed scope of the EITI reporting process provided the requested information. Any gaps or weaknesses in reporting to the Independent Administrator must be disclosed in the EITI Report, including naming any entities that failed to comply with the agreed procedures, and an assessment of whether this is likely to have had material impact on the comprehensiveness and reliability of the report.
- In accordance with Requirement 5.1, Guyana should ensure public disclosure of which extractive industry revenues, whether cash or in kind, are recorded in the national budget. Where revenues are not recorded in the national budget, the allocation of these revenues must be explained, with links provided to relevant financial reports as applicable.
- In accordance with Requirement 6.1, Guyana should ensure public disclosure of the legal or contractual terms that require extractive companies to undertake mandatory social expenditures. In accordance with Requirement 6.1, Guyana should ensure that all mandatory social expenditures are disclosed, where material social expenditures by companies are mandated by law or the contract with the government that governs the extractive investment. Guyana should also ensure the comprehensive and reliable disclosure of all environmental payments to government by extractive companies, where these are considered material. To strengthen implementation, Guyana is encouraged to consider disclosing extractive companies’ voluntary social and environmental expenditures.
Guyana is encouraged to consider the following recommendations to strengthen EITI implementation:
- To strengthen implementation, the civil society constituency is encouraged to consider innovative ways of expanding the constituency engaged in EITI implementation by undertaking further outreach to additional civil society organisations. The MSG is urged to monitor the extent to which the government enables, in policy and practice, public participation in policy making for extractive sector governance, including in the implementation of legal provisions related to free, prior and informed consent in the extractive licensing process.
- To strengthen implementation, Guyana may wish to ensure systematic disclosures of information about reserves and significant exploration activities in the mining, oil and gas sectors. Guyana is encouraged to systematically disclose any relevant national plans for artisanal and small-scale mining as well as for oil and gas, given the significant public interest in these extractive sectors.
- To strengthen implementation, Guyana is encouraged to ensure publication of employment information in the extractive industries disaggregated by gender. Where possible, Guyana may wish to include disaggregated information by company and occupational level. To strengthen implementation, Guyana is expected to document and provide estimates of the informal mining sector activity, including artisanal and small-scale mining. Guyana is encouraged to use its annual EITI reporting to document methodologically robust estimates of informal extractive activities and could consider a scoping study to determine the availability of information on informal extractive activities in Guyana.
- To strengthen implementation, Guyana is encouraged to systematically disclose information on ongoing legal reform in the extractive industries, such as draft legislative reforms, with a view to using EITI reporting as an annual diagnostic of implementation of key reforms.
- To strengthen implementation, Guyana is encouraged to ensure that all legally required environmental impact assessments and environmental management plans for extractive industry projects are publicly accessible. Guyana may also wish to consider disclosing information on any environmental liabilities, environmental rehabilitation and remediation programmes relevant in the jurisdiction in the period under review. Finally, Guyana is encouraged to systematically disclose information on regular, governmental environmental monitoring procedures as well as administrative and sanctioning processes.
- To strengthen implementation, Guyana is encouraged to consider using its EITI reporting to explain the methods used for calculating production volumes and values in the extractive industries. When including its calculation methods, Guyana should comment on data reliability and its compliance with international data standards. Given the relevance of artisanal and small-scale mining for civic society and local economies, Guyana could consider strengthening implementation by including estimates of production volumes and values of artisanal-mined minerals.
- To strengthen implementation, Guyana may wish to consider ensuring systematic disclosures of disaggregated export information by state, region of origin, company or project. Guyana is also encouraged to consider using its EITI reporting to explain the methods for calculating export volumes and values. When including calculation methods, Guyana should also report on the reliability and compliance with international data standards.
- To strengthen implementation, Guyana is encouraged to ensure public disclosure of any extractive revenues that are earmarked to specific programs, uses or geographical zones within the country, as well as of audit reports and disclosures related to revenue sustainability, including production projections and the proportion of future fiscal revenues expected to come from the extractive sector.
- To strengthen implementation, Guyana is encouraged to review the existence and materiality of any direct subnational payments by extractives companies on an annual basis to ensure that all material direct subnational payments are comprehensively and reliably disclosed, where applicable.
- To strengthen implementation, Guyana is encouraged to review the existence and materiality of any subnational transfers of government extractive revenues on an annual basis to ensure that all such subnational transfers are publicly disclosed in accordance with Requirement 5.2, where applicable.
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.
Guyana was accepted as an EITI implementing country on 24 October 2017. The first Validation of Guyana was scheduled to commence on 25 April 2020. Due to the transition to the revised Validation model, the Board rescheduled the Validation to commence on 1 July 2021. On 9 July 2021, the EITI Board approved Guyana’s request for an extension to its Validation deadline, to 1 October 2021.
Guyana EITI collated documentation for Validation using the Board-agreed data collection templates on Stakeholder engagement, Transparency and Outcomes and impact. The files are available on the Guyana EITI website. The International Secretariat’s Validation team prepared an initial assessment following the Validation procedure and Validation Guide. In accordance with the Validation procedure, a public call for stakeholder views on EITI implementation was open from 1 September to 1 October 2021. Virtual stakeholder consultations were undertaken from 11 to 29 October 2021.
The draft assessment was shared with the MSG for feedback on 6 December 2021, with a deadline of 3 January 2022. The MSG requested an extension for the period for comments on the draft Validation report on 21 December 2021, which was granted in accordance with the Board-approved approach to Validation during Covid-19. MSG comments were received on 31 January 2022, after which the assessment was finalised for the Validation Committee’s review.
In accordance with Article 4.c of Section 4 of the 2019 EITI Standard, the overall assessment consists of component scores on Stakeholder engagement, Transparency and Outcomes and impact, as well as an overall numerical score. The component score represents an average of the points awarded for each applicable requirement. The points awarded on the effectiveness and sustainability indicators are added to the component score on Outcomes and impact. The overall score is the average of the three component scores.
Scorecard for Guyana: 2022
Assessment of EITI requirements
- Not met
- Partly met
- Mostly met
- Fully met
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The three components of Validation each receive a score out of 100, as follows:
Outcomes and impact
60 Fairly low
53.5 Fairly low