Republic of the Congo

The government is committed to the EITI and relevant government representatives are part of the MSG. Participation in MSG meetings is relatively low, but meetings are usually quorate.

Companies are actively engaged in the design and implementation of the EITI, including MSG deliberations.

Civil society is actively engaged in the EITI process, but the application of the civil society protocol, particularly as it relates to freedom of operation, is limited to civil society members on the MSG. This controlled space for civil society is narrowly defined to MSG members and excludes important actors substantially engaged in the EITI process who face operational administrative or practical constraints in some aspects of their engagement, particularly in public EITI dissemination and outreach events.

The MSG includes relevant actors with adequate representation of key stakeholders. The new MSG members and revised MSG TOR were agreed after the start of Validation, in 2020. The MSG met infrequently in an ad hoc manner in the 2017-2019 period, with gaps in attendance and record keeping. The MSG's policy on per diems has been formalised, even if the actual practice remains unclear. Adherence to the MSG’s new TOR, which is in line with Requirement 1.4.b, will be assessed in the third Validation, including internal governance and the per diem practice.

EITI Congo work plans include objectives that reflect national priorities, such as the extension of the scope of EITI reporting to the forestry sector and the drafting of a transparency law. Work plan activities are measurable and time-bound, structured to achieve the agreed objective. The work plans also include activities aimed at addressing capacity constraints and activities aimed at embedding EITI reporting in government system through the Transparency Code.

The 2014 EITI Report provides an overview of the legal framework and fiscal environment in the mining, oil and gas sectors. However, it does not clearly detail the functions of the different government entities in the sectors. The description of revenue flows shows which government entity collects which revenue stream and most government agencies’ role is limited to collecting taxes and revenue, except DGH, which also plays a regulatory role.

The 2017 EITI Report provides information on mining, oil and gas licenses awarded in 2017 and confirms the lack of transfers. The report provides an overview of the process for awarding and transferring licenses, including the statutory technical and financial criteria for oil and gas license awards, but only the technical and financial criteria assessed in practice in the mining license awards in 2017. The existence and nature of criteria assessed for license transfers is unclear. The report lists the companies that received licenses in 2017, but only provides an assessment of non-trivial deviations from statutory procedures for licenses in mining, not in oil and gas.

The 2017 EITI Report provides copies of the license registers for mining and oil and gas, which provide most of the information listed under Requirement 2.3.b. The online oil and gas cadastre provides all information listed under Requirement 2.3.b for all active licenses. While the 2017 EITI Report does not provide coordinates for mining licenses, the Decree numbers provided allow users to locate the coordinates of specific licenses from the Decrees awarding them, accessible on the official gazette website.

The government’s policy requires that all contracts signed by the state with mining, oil and gas companies, including PSCs to be published in the Journal Officiel and are therefore public documents. A new Transparency Law has expanded the scope to include forestry contracts. In practice, contracts are published in the Journal Officiel with a link to the website of the Secretary General of the Government and some contracts are available on the EITI Congo website.

EITI Congo has agreed a three-year beneficial ownership roadmap and the March 2017 Transparency Law codifies government beneficial ownership policy, although the 2014 EITI Report does not explicitly address beneficial ownership.

The 2017 EITI Report demonstrates the materiality of the oil and gas SOE’s (SNPC) revenues and payments to government, and provides a description of the statutory financial relations between SNPC and the state. The report’s description of the practice of SNPC’s financial relations covers the SOE’s lack of dividends, retained earnings and third-party financing by oil and gas operators, although the report does not describe in sufficient detail the statutory financial relations between SNPC and the government nor provide analysis of the change in SNPC’s statutes in November 2017. The EITI Report does not comprehensively describe SNPC’s reinvestments in 2017. The report describes SNPC’s interests in upstream oil and gas companies, subsidiaries and projects, but does not consistently provide the terms associated with SNPC’s equity. The state’s lending to SNPC and to CORAF is described, including key terms for loans to SNPC but not to CORAF. However, the comprehensiveness of the report’s description of loans and guarantees is unclear.

The 2014 EITI Report provides an overview of the mining, oil and gas sectors, but does not provide a clear description of significant exploration activities undertaken in 2014.

The 2017 EITI Report provides production volumes and values for each extractives commodity it produced in 2017 aside from production values for certain quarrying products such as sandstone and limestone. However, these quarrying products were not within the scope of operations of material mining companies in the 2017 EITI Report.

The 2014 EITI Report provides export volumes and values for crude oil and diamonds, but not for gold from artisanal mining.

The MSG has agreed materiality thresholds for selecting companies and revenue streams, although the setting of a qualitative threshold for selecting companies means that companies that had ceased activities in 2014 were nevertheless included in the scope of reporting. The 2014 EITI Report lists and describes all material companies and revenue streams. The materiality of revenues from non-reporting companies is assessed, although the netting out of discrepancies tends to underestimate their cumulative value. Full government disclosure is provided.

The 2017 EITI Report provides the volumes of the state’s in-kind revenues that were collected, the volumes actually sold and the proceeds of the sales, disaggregated (but not reconciled) by buyer and y cargo. This includes sales of the state’s in-kind revenues handled by SNPC as well as those under the alternative marketing arrangement with Total EP Congo on the Nkossa/Nsoko field. The disclosures include in-kind payments that are part of the reimbursement of pre-financing arrangements with traders. The MSG included unilateral government disclosures of cargo-level disclosures of all oil and gas companies’ sales of their equity oil.

The 2017 EITI Report describes a barter-type infrastructure arrangement involving ENI’s development and management of the CEC integrated power project, including the terms of the relevant agreements and contracts, the parties involved, the resources which have been pledged by the state, and the value of the balancing benefit stream. The report describes two other types of arrangements that it does not categorise as barter-type arrangements, related to the reimbursement of the cost of infrastructure projects funded under the framework government-to-government agreement with China and the repayment of pre-financing agreements with commodity traders. There is insufficient information in the report to assess whether the financing agreements constitute a form of barter-type arrangement.

While there is evidence of the MSG’s assessment of the materiality of the Maritime Tax (see Requirement 4.1), the Maritime Tax is a payment from oil and gas companies to a private company.

The 2017 EITI Report comprehensively addresses the role of SOEs, including comprehensive and reliable disclosures of material company payments to SNPC and SNPC transfers to the Treasury. The lack of government transfers to SNPC in 2017 is confirmed. The report provides the volumes of the state’s crude oil that were transferred to SNPC’s subsidiary CORAF in 2017 and confirms the lack of payment for these deliveries. While the report only provides SNPC’s unilateral disclosures of transfers of a share of the proceeds from the sale of the state’s in-kind revenues in reimbursement of China-funded infrastructure loans and of pre-financing agreements with commodity traders, these accounts do not represent government accounts.

While the 2014 EITI Report could be clearer in stating that direct subnational payments from extractives companies do not exist, the International Secretariat’s understanding is that this is not applicable in the period under review.

The 2014 EITI Report presents reconciled financial data disaggregated by receiving government entity, by company and by revenue stream.

Although the timeliness of the ROC’s EITI reporting has slipped since 2014, data in the ROC’s EITI Reports has always been published within two years of the end of the fiscal period under review.

The MSG approved ToR for the IA in line with the Board-approved template as well as the recruitment of the IA. There were no significant deviations from the IA’s ToR in practice, and the MSG approved the reporting templates. The 2017 EITI Report provides a review of statutory audit and assurance procedures. It describes quality assurance procedures and provides an assessment of compliance with these procedures in practice. The report includes the IA’s assessment that the reconciled financial data is comprehensive and reliable, as well as a review of follow-up on past EITI recommendations and new recommendations. The MSG has prepared summary data for the 2017 EITI Report.

The 2017 EITI Report confirms that all mining revenues are recorded in the national budget and lists specific oil and gas revenues accounting for 58.17% of 2017 oil and gas revenues that are not recorded in the national budget. However, the report does not categorise the two types of in-kind deductions from the state’s Profit Oil as off-budget revenues, even though it clearly describes the nature and volumes of these deductions. There is no evidence of these oil and gas revenues in the 2017 budget execution report or the government’s 2017 balance sheet (TOFE), although they have been reflected in the government’s TOFE from mid-2018. While the report provides a general description of the allocation of most off-budget oil and gas revenues, it highlights that the IA was not provided access to the details of the agreements related to these deductions from transfers to the Treasury.

The 2014 EITI Report describes the general system of subnational transfers of oil and gas royalties to host local governments. However, the International Secretariat understands that the statutory subnational transfers were not effective in 2014 due to the lack of implementing regulations. The report does not refer to any ad-hoc subnational transfers.

EITI Congo has made modest efforts to include additional information on earmarks of extractives revenues for off-budget infrastructure projects (see Requirements 4.3 and 5.1) and the budget-making and audit processes.

While the 2017 EITI Report provides a cursory and general description of social expenditures mandated by law or the contract with the government that governs the extractive investment, the legal or contractual basis for mandatory social expenditures reported is unclear from the report. the report presents oil and gas companies’ unilateral disclosures of social expenditures categorised as mandatory, although it is unclear whether these disclosures are comprehensive. The report confirms that all mandatory social expenditures were made in cash, but provides descriptions of the expenditures and the identity of the beneficiary for only some, not all, of the mandatory social expenditures reported.

This requirement is not applicable in the mining sector, but has appeared to be applicable in the oil and gas sector in recent years. The 2017 EITI Report lists three quasi-fiscal expenditures by the SNPC foundation that have been mis-categorised. The report describes the allocation of oil and gas revenues not transferred to the Treasury, at least three of which appear to be forms of off-budget repayment of sovereign debt and infrastructure works. However, the lack of sufficient information on these arrangements constrains the ability to properly categorise these arrangements. Since mid-2018, the deductions from the state’s petroleum revenues for reimbursements of some ‘special agreements’ have been reflected in the government budget and TOFE, albeit without sufficient details. The detail of the agreements underpinning these deductions from government revenues have not yet been clarified to date.

The 2017 EITI Report provides, in relative and absolute terms, the extractive industries’ 2017 contribution to GDP, government revenues, exports, employment and the location of extractive activities. There is some coverage of artisanal mining production.

While the 2016 and 2017 EITI Reports have been published since the first Validation, there has been little concerted effort towards outreach and dissemination by the MSG or national secretariat beyond a press conference to launch the annual EITI Report. Terms of Reference for dissemination of the 2016 and 2017 EITI Reports in Brazzaville have been agreed, but partly implemented at the start of Validation.

EITI-Congo does not yet provide EITI data in open data formats, despite some effort to develop an online portal with SAP. However, mainstreaming transparency in government systems through the transparency law has been a major achievement for the MSG.

The MSG has been thorough in taking steps to act upon lessons learned and monitoring progress with the implementation of recommendations in EITI Reports. Together with the IA, significant efforts have been made to identify, investigate and address the causes of discrepancies in EITI reporting.

EITI-Congo has produced annual progress reports for 2014 and 2015 that thoroughly document progress and outcomes of implementation.