Mali

Evidence from multi-stakeholder group (MSG) meeting minutes and conversations with stakeholders show that the government has created structures designed to ensure its participation in the process. Government commitment has fluctuated with changes of leadership at the Ministry of Mines, but remained relatively strong during the period under review (2013-2014). The government has provided funding and government representatives take part in outreach efforts.

Evidence such as MSG meeting minutes and conversations with stakeholders show that companies are actively engaged in the design and implementation of the EITI process, through participation in MSG meetings and input to the EITI reporting process. Capacity among company representatives is strong although coordination of industry positions could be improved in advance of meetings. Companies could also benefit from a clear system for appointing their alternates to the MSG. There do not seem to be any legal obstacles preventing company participation in the EITI.

The International Secretariat did not find legal or regulatory barriers to civil society participation in the EITI process. Civil society representatives participate actively in MSG meetings and working groups. The International Secretariat did not find restrictions to civil society freedom of expression outside MSG meetings. Stakeholders recognised weak capacities and poor coordination within the civil society constituency, but civil society representatives also acknowledged the MSG’s efforts to strengthen the capacities of its members.

The MSG meets frequently and attendance and record keeping occurs for every meeting. However, the meeting records are not necessarily a reflection of MSG discussions and further efforts could be made to ensure that MSG members always have the documents at hand during decision making. The effectiveness of the MSG could be improved with more regular meetings of its three sub-committees. It would also be useful for the actual per diem policy to be reflected in the MSG’s terms of reference. Lack of civil society capacity seem to be preventing civil society from fully and actively contributing to the design and implementation of the EITI and further capacity building should be undertaken.

The MSG has not considered opportunities for linking implementation to national priorities for the sector. Although there was limited consultation with stakeholders outside the MSG on these objectives, stakeholders confirm that they respond to interests voiced during interactions with persons in affected communities. The 2016 work plan includes a timeline and specific activities to achieve the objectives. It should be noted, however, that there is still no costing for some items and a few activities planned for the first quarter of 2016, namely the outreach activities and capacity building are behind schedule. Nonetheless, in general, the work plan appears to address most of the EITI Requirements.

The 2013 EITI Report describes the legal framework and fiscal regime governing the extractive industries, including an overview of the relevant laws and regulations, and information on the roles and responsibilities of the relevant government agencies. The report highlightes ongoing reforms. The MSG may wish to clarify ambiguities related various fiscal regimes applicable to mining companies due to stabilisation clauses. Future EITI Reports could also consider documenting deviations from the applicable fiscal regime.

Although the 2013 report provides a general overview of the process of allocating licences, the report doesn’t include a clear description of the process for awarding licenses in the fiscal period covered. The criteria for allocating licenses and to what extent these criteria were followed was not addressed. Following the update of the mining cadastre, the Mining Cadastre Administration System (MCAS) (https://revenuedevelopmentdotorg.wordpress.com/mcas/) shows that payments of licensing fees related to 75% of licences issued up to 2013 were still outstanding at the end of 2015 when the 2013 EITI Report was published. The report did not identify any deviation to the criteria used for issuing license, whereas these outstanding payments are evidently deviations to the criteria for issuing licenses.

The 2013 EITI Report provides a link to an online cadastre that includes information set out in provision 2.3.a-b for all the licenses held by mining companies covered in the EITI reporting process, but not for the oil and gas company Petroma, which was also included in the EITI reporting process. For mining companies not covered by the EITI reporting process, information set out in provision 2.3.b is also available for the licenses held. The Report explains that the lack of full disclosure is due to a lack of an up-to-date cadastre system and documents government plans to overcome these barriers through a project for the modernisation of the oil, gas and mining cadastre led by the German aid agency, GIZ.

The 2013 EITI Report includes a list of publicly accessible contracts and a link to the Ministry of Mine website. Although the 2013 EITI Report states that there is no formal government policy on contract transparency, government representatives have explained that the policy is line with the current practice of full disclosure of contracts in the mining sector and publication of the model production-sharing contract agreement for the oil and gas sector.

The MSG, together with the IA, have included beneficial ownership disclosure as part of reporting for those companies in the scope of reconciliation. The 2013 EITI Report provides beneficial ownership information or links to publicly listed companies for 13 of the 18 companies included in the reconciliation. Implementing countries are not yet required to address beneficial ownership, but more work is needed to ensure full implementation of this requirement.

The 2013 EITI Report confirms that state-participation in the extractive sector gave rise to material revenues in the form of dividends, which are disclosed in the report. Given that there were no state-owned enterprises (SOEs) operating in the extractive sector, significant aspects of this requirement are not applicable in Mali. The MSG has disclosed relevant information on state participation in accordance with the applicable aspects of the requirement.

The 2013 EITI Report provides background on solid minerals, including artisanal and small-scale mining (ASM), quarrying activities and on the hydrocarbon sector, which is still in the exploration phase. For the mining sector the 2013 EITI Report provide an overview of proven reserves for bauxite, gold, iron ore, phosphate and other solid minerals.

The 2013 EITI Report includes volumes of production for each producing mine from 2010 to 2013, the value of export of gold over the period 2009 to 2013, and reconciliation of production volumes and values between disclosures from government and companies.

The 2013 EITI Report includes information on volumes and values of production of refined gold and silver by company.

The MSG has considered various options and agreed a clear materiality threshold in accordance with EITI requirement 4.1.a. While all government agencies provided information for companies included in the reconciliation in accordance with Requirement 4.1.c, only two government entities fully reported all receipts including revenues below the materiality thresholds. Although significant aspects of the requirement have been implemented, the broader objective of comprehensive disclosure by reporting entities have not been achieved.

According the 2013 EITI Report the state does not collect any revenue in-kind, as it holds its stakes in mining directly and there is no SOE. Furthermore Mali did not produce oil or gas during the reporting period.

The scoping report adopted on 30 September notes that the independent administrator (IA) did not any infrastructure or barter provisions in Mali. The 2013 EITI Report confirmed these findings.

The IA states in the 2013 EITI Report that they had not been aware of the existence of significant revenues from mineral transport activities, and stakeholders confirmed that transport revenues were not material. Mali being a landlocked country, gold production is refined near mining site and transported by trucks and/or by air for export.

Mali does not have SOEs participating in the extractive sector, neither does the applicable legal and regulatory framework provide for an SOE. This was confirmed by the stakeholders.

According to the 2013 EITI Report, there are no direct subnational payments. MSG members confirmed that there are no direct subnational payments and that no laws or regulations provide for any extractive industry payments to be made directly to local governments.

Both the 2012 and 2013 EITI Reports show financial data disaggregated by individual company, government entity and revenue stream, in accordance with the EITI Standard. Unilateral disclosures for companies below the materiality threshold and payments made by subcontractors were not disaggregated by individual company,but these aggregated figures were not part of the reconciliation process.

Both reports under the Standard were published in accordance with two year reporting requirement. MSG members stated that they were satisfied with the regularity and timeliness of EITI Reporting, but stakeholders outside the MSG noted two-year-old EITI data was not necessarily useful at the time of publication, reports from dissemination campaigns show that local communities are interested in more recent data, particularly as it relates to subnational transfers. Thus the MSG is encouraged to include disaggregated payments for companies below the materiality threshold.

Significant aspects of this requirement have not been fully implemented, and the underlining objective of ensuring reliability of financial information disclosed in EITI reports has not been achieved. The IA has reviewed the auditing practices and recommended quality assurance procedures, which have not been followed by a large number of companies and government entities participating in EITI reporting, seriously undermining the credibility of the disclosed financial information.

The 2012 and 2013 EITI Reports disclose how revenues are allocated in accordance with requirement 5.1. The 2013 EITI Report shows that 93.7% of reported revenues from the extractive sector were recorded in the state budget. The MSG may wish to provide a brief overview of the state budget, particularly as it relates to social expenditures, such as health and education, and provide links to a public document of the state budget.

Although the MSG identified subnational transfers as material revenue stream in the scope of the report and the subsequent reporting templates, no materiality threshold was set for subnational transfers, meaning that the threshold was effectively zero and all subnational payments and transfers are therefore material. Based on this significant aspects of requirement 5.2.a have not been implemented.

The 2013 EITI Report shows that 93.7% of reported revenues from the extractive sector were recorded in the state budget, described the different phases in the process of preparation and adoption of the state budget, referred to the revenue collection process as it relates to extractive revenues and allocation of revenues from extractive industries. Disclosing information on revenue management and expenditures is only recommended and will not count in the assessment of compliance.

The 2012 and 2013 EITI Reports both disclosed mandatory social payments made by companies in accordance with Requirement 6.1.a. Disclosure of voluntary social expenditure appears to correspond with disclosure of mandatory payments. Beneficiaries of social payments were not government agencies and these payments were therefore unilaterally disclosed by companies.

The 2013 report confirms that when state participation gives rise to material payments in the form of dividends, these payments are paid directly to the state treasury. Mali does not have an SOE operating in the extractive sector and hence this requirement is not applicable in Mali.

The 2012 and 2013 EITI Reports include most of the information set out in requirement 6.3 apart from estimates of employment in the informal sector. The 2013 EITI Report provides an overview of the size of the extractive sector in absolute terms and as a share of GDP, an estimate of informal activity (ASM estimated production volumes), total government revenues in absolute terms and as a share of total revenue, exports in absolute and relative terms, employment in the sector and key regions where production is located.

The MSG had taken steps to ensure that the 2012 EITI report is comprehensible, actively promoted and publicly accessible. Through the organisation of dissemination events and workshops, Mali EITI has ensured that the EITI has also contributed to public debate. The EITI provided a platform for discussions and debates about how the mining sector is managed, in particular discussion regarding sub-national payments. However, this work has not been undertaken for the 2013 EITI Report.

Requirement 7.2 encourages the MSG to make EITI Reports accessible to public in open data formats. The Mali EITI as not yet started its work on making EITI Reports machine readable. However, mainstreaming has been included in one of the functions of the MSG, providing a mandate for the EITI to undertake more work on this requirement.

The MSG has taken steps to act upon lessons learnt, to identify, investigate and address the causes of any discrepancies and to consider the recommendations for improvements from the Independent Administrator. It has also formulated its own recommendations on improving reporting through the supervisory committee. However, given that weaknesses in reporting templates have been highlighted by the Independent Administrator over the last three reporting cycles, the MSG ought to consider necessary improvements in consultation with the Independent Administrator for future EITI Reports.

The MSG has reviewed progress and outcomes of implementation on a regular basis, including by publishing annual progress reports over the past four years. The 2015 annual progress report contains a brief section on impact but further details and information could be given. Mali EITI may wish to consider undertaking an impact assessment, with a view to identify opportunities to increase impact.