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The EITI Board agreed that São Tomé and Príncipe has made meaningful progress with considerable improvements in implementing the 2016 EITI Standard.

Outcome of the Validation of São Tomé and Príncipe.

Decision reference
2018-36 / BM-40
Decision basis
2016 EITI Standard, Requirement 8.3 EITI Validation deadlines and consequences

Board decision

The EITI Board agreed that São Tomé and Príncipe has partly addressed the corrective actions from the country’s first Validation. Consequently, São Tomé and Príncipe has made meaningful progress overall with implementing the EITI Standard, with considerable improvements across several individual requirements.

The Board recognised São Tomé and Príncipe’s efforts to use the EITI to manage public expectations regarding the potential revenue and indirect contributions from the nascent oil and gas sector. São Tomé and Príncipe’s EITI implementation is also recognised as having increased collaboration among government agencies and improved the government’s public financial management systems. The second Validation has confirmed São Tomé and Príncipe’s efforts to use EITI reporting as a diagnostic instrument to support reforms in the licensing system, oversight of companies’ social expenditures and subnational revenue management.

The Board welcomed ongoing efforts to consider further the opportunities to improve government and company disclosures through systematic disclosures. The Multi-Stakeholder Group (MSG) should continue to ensure adherence to the EITI Principles and Requirements.

The Board has determined that São Tomé and Príncipe will have 12 months, i.e. until 29 June 2019 before a third Validation to carry out corrective actions regarding license allocations (2.2), license register (2.3) and data quality (4.9). Failure to achieve meaningful progress with considerable improvements across several individual requirements in the third Validation will result in suspension in accordance with the EITI Standard. In accordance with the EITI Standard, São Tomé and Príncipe’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 São Tomé and Príncipe. Progress in addressing these corrective actions will be assessed in a third Validation commencing on 29 June 2019:

  1. In accordance with Requirement 2.2.i and iii, São Tomé and Príncipe is required to disclose the technical and financial criteria used in awarding licenses and any non-trivial deviations from the applicable legal and regulatory framework governing license transfers and awards related to the award or transfer of licenses pertaining to the companies covered in the EITI Report during the accounting period covered by the EITI Report.

  2. In accordance with Requirement 2.3.b, São Tomé and Príncipe is required to maintain a publicly available register or cadastre system which includes the timely and comprehensive information on the date of application for each of the licenses pertaining to companies covered in the EITI Report. Any significant legal or practical barriers preventing such comprehensive disclosure should be documented and explained in the EITI Report, including an account of government plans for seeking to overcome such barriers and the anticipated timescale for achieving them.

  3. 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. The MSG should ensure that future EITI reporting includes a clear statement from the IA on the comprehensiveness and reliability of reconciled financial data.


São Tomé and Príncipe was admitted as an EITI Candidate in 2008.  The first Validation of São Tomé and Príncipe commenced on 1 July 2016. On 8 March 2017, the EITI Board found that São Tomé and Príncipe had made meaningful progress in implementing the 2016 EITI Standard. Nine corrective actions were established by the EITI Board, pertaining to the following requirements:

  1. MSG oversight (Requirement 1.4)

  2. Work plan (Requirement 1.5)

  3. License allocations (Requirement 2.2)

  4. License register (Requirement 2.3)

  5. Exploration data (Requirement 3.1)

  6. Data quality (Requirement 4.9)

  7. Social expenditures (Requirement 6.1)

  8. Follow-up on recommendations (Requirement 7.3)

  9. Outcomes and impact (Requirement 7.4).

The Board asked São Tomé and Príncipe to address these corrective actions to be assessed in the second Validation. STP has undertaken a number of activities to address the corrective actions:

  • At its 27 January 2017 meeting, the MSG appointed PWC (Portugal) as the Independent Administrator for the 2015 EITI Report.

  • On 16 March 2017, the MSG agreed the scope of the 2015 EITI Report with the Independent Administrator.

  • On 28 September 2017, the MSG approved the 2016 Annual Progress Report, in light of the corrective actions related to Requirement 7.4.

  • On 5 October 2017, the MSG agreed revised Terms of Reference (TOR) and work plan for 2017-2018 in light of corrective actions related to Requirement 1.4 and 1.5.

  • On 22 December 2017, the 2015 EITI Report approved by the MSG was published.

  • On 2 April 2018, the government invited EITI stakeholders to re-select their representatives on the MSG, in accordance with the approved TORs.

São Tomé and Príncipe’s second Validation commenced on 8 March 2018. The Secretariat assessed the progress made in addressing the nine corrective actions established by the EITI Board. The EITI International Secretariat’s assessment is that São Tomé and Príncipe has fully addressed six of the nine corrective actions, with significant improvements on the three outstanding requirements. The draft assessment was sent to the Multi-Stakeholder Group (MSG) on 1 June 2018. Following comments received on 25 June 2018, the assessment was finalised for consideration by the EITI Board.

Scorecard for São Tomé and Príncipe: 2018

Assessment of EITI requirements

  • Not met
  • Partly met
  • Mostly met
  • Fully met
  • Exceeded
Scorecard by requirement View more Assessment View more

Overall Progress

MSG oversight

1.1Government engagement

The government is fully, actively and effectively engaged in the design, implementation, monitoring and evaluation of the EITI process. Government representatives are taking part in outreach and efforts to promote public debate. While there has been continued and consistent support expressed by the government, challenges remain with respect to obtaining data on the Joint Development Zone with Nigeria from the Joint Development Authorities.

1.2Company engagement

Companies with presence in the country are actively and effectively engaged in the EITI process. There has been a positive step to expand company representation on the multi-stakeholder group (MSG), but there are also limitations in engaging any companies within the Joint Development Zone. Companies can also be more proactive particularly in outreach and information dissemination for their constituency and with other stakeholder groups.

1.3Civil society engagement

The active involvement of some civil society organisations in São Tomé and Princípe EITI demonstrates that civil society are fully, actively and effectively engaged in the design, implementation, monitoring and evaluation of the EITI process. There is however a continuing need for greater capacity and knowledge regarding the oil sector and transparency, as well as financial resources to support their operations.

1.4MSG governance

The MSG approved a revised ToR in 2017, defining the MSG’s roles and responsibilities in accordance with Requirement 1.4.b. The MSG has initiated a renewal of its membership, ensuring that all constituencies are adequately represented and qualified. Internal nominations procedures for selecting MSG representatives have been codified.

1.5Work plan

In accordance with requirement 1.5, the MSG approved an updated fully-costed work plan in October 2017. The objectives are in harmony with national priorities and outline plans for addressing capacity constraints that could form obstacles to EITI implementation. The work plan addresses the scope of EITI reporting.

Licenses and contracts

2.2License allocations

The 2015 EITI Report contains a description of the process for transferring or awarding licenses and information about the recipients and consortium members where applicable. Information on transfers and non-trivial deviations from the applicable framework governing license transfers aren’t reported.

2.3License register

Dates of application are not publicly available for contracts and licenses held by companies within the scope of reporting.

2.4Policy on contract disclosure

Building on its clarification of the government’s policy on contract disclosure in previous EITI Reports, the MSG has worked with relevant stakeholders to publish all active oil and gas contracts, aside from the PSC for Block 2 concluded with Sinoangol, as encouraged by the EITI Standard.

2.1Legal framework

The 2014 EITI Report contains an overview of the legal framework and fiscal regime governing the extractive sector.

2.5Beneficial ownership

Not assessed

The multi-stakeholder group has initiated discussions related to disclosure of beneficial owners of companies operating in both the J Joint Development Zone and the Exclusive Economic Zone, and is considering to request beneficial ownership information in forthcoming EITI Reports. Disclosure of beneficial ownership is also an objective in the 2016 work plan.

2.6State participation

The 2014 EITI Report describes the participation of the government in production sharing agreements in the Exclusive Economic Zone and details this block-by block. The report explains that holdings are monitored by the National Petroleum Agency and sets out the terms of state participation. Until production, the company covers all costs. Accordingly, to date, state participation has not led to any revenues or costs.

Monitoring production

3.1Exploration data

The 2015 EITI Report provides an overview of the extractive industries in STP, including significant exploration activities in the EEZ. Gaps in coverage of activities in the JDZ are not assessed in terms of compliance with Requirement 3.1, given the Board’s prior approval of adapted implementation for the 2015 and 2016 EITI Reports.

3.2Production data

Not applicable

There is no production in the Exclusive Economic Zone and the Joint Development Zone. The requirement on production data is therefore not applicable to São Tomé and Princípe.

3.3Export data

Not applicable

There being no production, there are no exports from the Exclusive Economic Zone or the Joint Development Zone. The requirement on export data is therefore not applicable to São Tomé and Princípe.

Revenue collection

4.3Barter agreements

Not applicable

There is no evidence suggesting that infrastructure provisions and barter arrangements exist. The requirement on infrastructure provisions and barter arrangements is therefore not applicable to São Tomé and Princípe.

4.6Direct subnational payments

Not applicable

There are no provisions on direct subnational payments and no indication that extractive companies make payments to sub-national levels of government. The requirement on subnational direct payments is therefore not applicable to São Tomé and Principe.


The 2014 EITI Report presents revenue data by individual company and revenue stream, and revenue is also presented by individual government entity.

4.9Data quality

The 2015 EITI Report provides a detailed description of the approach to ensuring the reliability of reconciled data, review of audit and assurance procedures and practices, description of the assurance procedures and an assessment of the materiality of non-complying entities. The report excludes a clear statement by the IA on the comprehensiveness and reliability of the reconciled financial data.


The multi-stakeholder group has agreed a clear definition of materiality and materiality thresholds for company and government reporting, and the rationale is documented. Revenue flows are mapped out and all payments by companies (and receipts by government) from the Exclusive Economic Zone are included in the report and there were no financial flows from the Joint Development Zone in 2014.

4.2In-kind revenues

Not applicable

There is no production and thus no in-kind revenue collected by the government. The requirement on in-kind revenues is therefore not applicable to São Tomé and Princípe.

4.4Transportation revenues

Not applicable

There is no indication that revenues from the transportation of commodities would constitute one of the largest revenue streams. The requirement on transportation revenue is not applicable to São Tomé and Princípe.

4.5SOE transactions

Not applicable

There is no extractive sector state-owned enterprise in São Tomé and Princípe. The requirement on transactions between state-owned enterprises and government is therefore not applicable.

4.8Data timeliness

The 2014 EITI Report was published in October 2015, less than one year after the end of the financial year.

Revenue allocation

5.1Distribution of revenues

Extractive revenues that are not recorded in the budget and their relation to the national budget are explained in the 2015 EITI Report. The detailed description of off-budget revenues and the reconciliation of transfers from the national oil account to the budget demonstrates that STP has gone beyond Requirement 5.1.

5.2Subnational transfers

Not applicable

Sub-national transfers are disclosed in the 2014 EITI Report. The legal provision related to subnational transfers of oil revenues is referenced, and the revenue sharing formula explained. There is no explanation for how the revenues are shared among the municipalities. Discrepancies between calculated and actual transfers are disclosed. Subnational transfers since the establishment of the Exclusive Economic Zone are reported by year, as absolute figures, share of the state budget and share of oil revenues.

5.3Revenue management and expenditures

Not assessed

The report describes all income to the National Oil Account from the Joint Development Authority and companies in the Exclusive Economic Zone and transfers to the treasury since 2005, and reconciles the transfers from the Central Bank (National Oil Account) to the treasury for 2003-14. The report also documents whether transfers were in line with the law. The report also includes the annual budgets of the Joint Development Authority for 2003-2014, and the contributions to the budget made by companies and governments.

Socio-economic contribution

6.1Mandatory social expenditures

The 2015 EITI Report clearly distinguishes between mandatory and voluntary social expenditures. It discloses comprehensive information on mandatory social contributions by companies in accordance to the PSCs, disclosures of mandatory social expenditures by companies disaggregated by project, beneficiary and between cash and in-kind expenditures.

6.2Quasi-fiscal expenditures

Not applicable

There is no extractive sector state-owned enterprise in São Tomé and Princípe. The requirement on quasi-fiscal expenditures by state-owned enterprises is therefore not applicable.

6.3Economic contribution

The 2014 EITI Report includes, in absolute and relative terms, the contribution of the extractive industries to government revenue, exports and employment. GDP and other general information on the economy are presented in the report, but the contribution of the oil sector is not mentioned. With no production this is likely to be negligible.

Outcomes and impact

7.2Data accessibility

Not assessed

EITI data is accessible, machine-readable and actively disseminated, both in print and summarised formats. There is no reference to national revenue classification systems or international standards in the EITI Reports.

7.4Outcomes and impact of implementation

The 2016 annual progress report has been made publicly available and provides a summary of the MSG’s follow-up on past EITI recommendations, as well as a narrative account of efforts to strengthen implementation and general observations on the impact of EITI implementation.

7.1Public debate

The MSG has sought to ensure the EITI Reports are comprehensible, written in a clear style and actively promoted. The reports include information of national relevance that goes beyond the EITI Requirements and provides facts for public debate on the management of oil revenue, social projects and the management of the Joint Development Zone. Media references to the findings of the EITI Reports have been relatively few but have clearly resulted from outreach activities by São Tomé and Princípe EITI.

7.3Follow up on recommendations

The 2016 annual progress report and 2015 EITI Report detail the MSG’s follow-up on recommendations of STP’s EITI Reports and Validation. The MSG has actively followed up on past recommendations and the 2017-18 work plan has been updated with specific objectives and activities related to follow-up on EITI recommendations.