Publisher: 
EITI International
Publication Type: 
Analysis by the EITI
Published Date: 
June, 2018

Contract transparency in oil, gas and mining: opportunities for EITI countries

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Summary

The EITI encourages implementing countries to publish contracts and license agreements governing oil, gas and mining operations. To this end, the paper brings together findings from implementing countries on the contract transparency requirements of the EITI Standard as documented during Validation.

Introduction 

This document recaps some of the stakeholder views gathered during Validation on the benefits and challenges with contract disclosure.

The EITI encourages implementing countries to publish contracts and license agreements governing oil, gas and mining operations.

The following key findings have been identified:

  1. The EITI has significantly influenced the contract transparency debate in implementing countries. Five years after the EITI began encouraging contract disclosure, multi-stakeholder groups (MSG) around the world have considered or taken up the encouragement to publish contracts.
  2. Validation has highlighted several benefits of contract transparency for many stakeholders. This includes improved ability to monitor contractual obligations, improved inter-agency collaboration, greater potential for forecasting future revenues and assessing the implications for affected communities. Yet, it is also clear that there is still limited use and analysis of contracts that have been made public.
  3. There appears to be little focus on the EITI’s encouragement of contract transparency in Validation. The EITI encourages implementing countries to disclose any contracts and licenses that provide the terms attached to the exploitation of oil, gas and minerals. Yet, given that validation only measures the level of transparency in a government’s policy and practice in terms of contract publication, a country whose stated policy is zero public disclosure can nonetheless show satisfactory progress by stating that policy and disclosing no further information.
  4. There continues to be a discrepancy between policy and practice in countries that provide for full disclosure. In at least six countries, the government’s policy provides for full contract transparency but in practice not all the contracts are published[1]. In countries with contract transparency provisions, it was unclear to stakeholders whether all contracts had been published, such as Liberia and Niger, and whether the legal provisions were retroactive, such as in Burkina Faso and Cote d’Ivoire
  5. Validation has shown a need for clarification of the meaning of confidentiality clauses, and to what extent they prevent contract publication. There was general confusion on the role of confidentiality clauses, government’s ability to use their sovereign prerogative to break confidentiality clauses, and the use of model contracts to progress on these issues. This was highlighted as an issue in Albania, Cote d’Ivoire, Ghana, Iraq, Mozambique, Timor-Leste and Ukraine.

EITI Reports could provide further contextual information for stakeholders. Reports could pay further attention to the distinction between the mining and oil and gas sectors, the different types of contracts