Malawi

The government is fully engaged, and agencies are cooperating to address recommendations from reporting and EITI Requirements.

Companies participate actively in the MSG’s work, and the Chamber of Mines and Energy effectively engages with its members on EITI issues. However, companies not members of the chamber have limited opportunities to participate, and there is a lack of adherence to data quality assurances agreed by MSG (see Requirement 4.9).

Civil society is an active stakeholder in the process and can fully engage. CSOs support the EITI, use it to promote reforms and produce analysis of the sector. Networks that enable coordination have been successfully formed.

The MSG functions in an equitable and effective manner, and the ToR is followed. Constituencies are adequately represented. The nomination process of CSO members was free and transparent.

The work plan is linked to priorities and includes relevant activities, but the level of stakeholder consultation remains unclear and funding has not been identified for most activities. The plan has not been widely available to the public.

MWEITI provides a description and overview of the existing legal and fiscal frameworks. This also encompasses on-going reforms and recommendations for further reforms.

License awards are covered while no transfers occurred during the reporting period. The process for awards and transfers are fully detailed in legislation and in the report. No evidence suggests any deviations from statutory procedures. Descriptions of technical and financial criteria used, though limited, is deemed sufficient.

The Department of Mines systematically discloses information through a license registry. Coordinates are not explicitly detailed, but contracted areas are visible on a scale of 1:5,000. The score has been downgraded due to limitations with petroleum license data.

The 2015-16 EITI Report describes key provisions and regulations related to contract transparency. There is no government policy preventing disclosure of contracts. The government has not published contracts themselves, but the report and MSG confirm that Malawi relies on third-party disclosures through ResourceContracts.org.

MWEITI has clarified the government’s policy and legislation on beneficial ownership disclosure. A beneficial ownership roadmap is published, and the report discloses beneficial owners for some companies. Legal owners of each material company are included in the report, referencing securities exchanges where several companies are listed.

MWEITI demonstrates that the state participates through minority shares in two operations, that are not material or significant. Ideally, they should have clarified that status of the National Oil Company of Malawi (NOCMA) but publicly available data implies that NOCMA was not relevant during the period under review, according to the definition provided under Requirement 2.6.a.

The 2015-16 Report provides a current overview of the extractive industries, and lists the main type of mineral reserves, prospective projects, and a brief history of the sectors in Malawi.

The report includes production volumes and values for each commodity, by company and license. MWEITI supplementing data from different sources when unavailable or unreliable. Malawi have gone beyond the minimum requirements by highlighting differences between different reports and provides recommendations for improving production statistics.

The MWEITI Report covers available data for export volumes and values for all commodities, combining various sources to ensure comprehensiveness. Differences in numbers are noted, although the methodology for ensuring comparability is not identified.

MWEITI succeeds in setting materiality thresholds for payments, revenue streams and for companies, adequately describe reporting entities, and identifies non-reporting companies and their payments. Omissions were not considered to influence comprehensiveness of reporting, however, the EITI Board could not guarantee that all payments were included.

There are statutory provisions for royalties in mining, oil and gas sectors enabling in kind payments, at the discretion of the Minister of Natural Resources, Energy and Mining. However, the report and stakeholders confirm that no in-kind payments were made by either mining or petroleum companies during the period under review.

MWEITI claims there were no infrastructure nor barter arrangements. The report still describes one contract with such provisions, without stating if it is material. But, all stakeholders agreed that the contracts only cover social expenditures, not transactions of physical goods or terms in exchange for license awards; treated under Requirement 6.1.

The report unilaterally discloses total government revenues from the mineral transportation sector. Concession fees amounted to MWK 336 715 113 in 2015-16, but since no company is partially owned by the government, nor involved in upstream extractive sector activities, the requirement is not applicable.

The International Secretariat’s initial assessment is this requirement is not applicable in Malawi. For more details please refer to requirement 2.6 on state participation and the existence of state-owned enterprises.

The 2015-16 MWEITI Report presents ambiguous statements of the applicability of direct sub-national payments in Malawi, but further documentation and stakeholder consultations confirm that no such fees are extractive specific nor material.

Reconciled financial data in the 2015-16 EITI Report is disaggregated by company, revenue stream and government entity. The report also presents recommendations for further disaggregation of data by individual project.

The MWEITI report was published within the two-year deadline of the EITI Standard, although online access was not as timely. Stakeholder consultations also revealed that companies are willing and able to provide more timely data, if provided with reporting templates in alongside other reporting processes.

MWEITI deviates from the standard procedures, but all are met by an expanded inception report. However, public access to the report must be ensured. The does not conclude that data is reliable, but stakeholders remain confident. However, contrary to the overall objective of #4.9, only three companies adhered to quality assurances, limiting data quality.

Extractive sector revenues are largely recorded in the single treasury account. Some revenues are retained internally in off-budget funds, such as the Petroleum Training Fund, managed by the Department of Mines. But significant information is missing or unclear, with no values reported through EITI or otherwise.

The 2015-16 MWEITI Report presents ambiguous statements of the applicability of sub-national transfers in Malawi, but further documentation and stakeholder consultations confirm that there are no such transfers in Malawi.

MWEITI has made some attempt to including information on the budget-making process through references and documentation of the budget framework of Malawi for 2015-16. The general description of the key documents and procedures related to the budgeting process provides a clear guide for interested readers and users of the EITI Report.

The report covers mandatory social expenditures for two mining companies and all petroleum sector companies. But almost no payments are reported nor is any reason for lack of payments identified. Reported mandatory social payments are not disaggregated sufficiently. The report does describe and disclose voluntary social payments associated with one reporting oil and gas company.

The International Secretariat’s initial assessment is this requirement is not applicable in Malawi. For more details please refer to requirement 2.6 on state participation.

Estimates are provided for the extractive sector’s contribution to gross domestic product, exports, government revenues and employment, and areas of significant operations. No estimates were provided for the informal sector’s contribution, although estimates are available for the artisanal and small-scale miners’ contributions.

EITI Reports are comprehensible, and CSOs and the media are spreading awareness. Especially contract transparency has contributed to public debate. Data is available in open formats and its use is not restricted.

MWEITI has made efforts to make data accessible. There is further potential for systematic disclosures.

MWEITI has produced remedial action plans, which it used to follow up on recommendations from reporting. Government agencies have collaborated to address recommendations, and the MSG has discussed progress.

The annual progress report captures activities and follow-up on recommendations but lacks a review of the impact of EITI implementation. The description of progress in meeting EITI requirements is vague.