Indonesia’s natural resource history stretches back to its fabled spice islands. Moving forward several centuries to the 1960s, the nation introduced an innovative contract, now typical in the oil and gas sector, called a production sharing agreement (PSA). This type of agreement is currently used in many oil- and gas-rich countries, as a way for governments to obtain a share of the oil and gas produced.
Kosmos Energy has been a leader on contract transparency for many years. Since publishing their first set of contracts for Ghana in 2011, the company has established a policy that they “prefer to make the material terms of [their] Petroleum Agreements (PAs) and Production Sharing Contracts (PSCs) publicly available”. They have filed all of their PAs and PSCs with the United States Securities Exchange Commission and published links to all of these contracts on their website. Sophie Durham,
The Government of Malawi formally committed to disclose all oil, gas and mining contracts in December 2015 at a Malawi EITI stakeholders meeting in Lilongwe. At the meeting, the then Principal Secretary Ben Botolo responsible for mining said that all contracts were already available upon request at the Department of Mines. As civil society, we were quick to take government at their word. But we soon discovered that while mining contracts were easily accessible,
Creating a level playing field for all companies in Mali
The Publish What You Pay (PWYP) Mali coalition and the Office of the Auditor General (OAG) have made numerous calls for the publication of mining contracts. They are doing this because publication of contracts will help improve the monitoring of revenues received by local government and ensure that companies comply with their social and environmental commitments.
The International Council on Mining and Metals (ICMM) is a partner and supporting organisation to the EITI. Twenty-seven companies are members of ICMM, through which they are supporters of the EITI. ICMM CEO Tom Butler attended the recent EITI Board meeting in Berlin and participated in a side event on contract transparency with EITI Chair Fredrik Reinfeldt. Tom explains ICMMs policy on contract transparency and the impact it has had in this Q&A.
Download slides presented at the event
Read the address given by EITI Chair Fredrik Reinfeldt on contract transparency
15:15-17:00 hrs
The Contract transparency landscape within EITI is changing fast. More than half of EITI member countries have disclosed extractive industry contracts and 16 EITI supporting companies have now made statements supporting publication in some form. In the last year alone,
Mining giant Rio Tinto was the first major mining company to announce that they will support the public disclosure by countries of their mining contracts and licenses. By coming out in favour of contract transparency, the company is joining ranks with Total, as well as smaller oil companies Kosmos Energy and Tullow Oil. In a statement, EITI Chair, Fredrik Reinfeldt “welcomed and commended Rio Tinto’s policy, as a transparency leader in mining.” Simone Niven, EITI Board member and Group Executive,
In the Philippines, communities can be involved in developing social and community programs with extractive companies' support, such as the construction of schools, hospitals and roads. Communities are then involved in monitoring the terms of contracts and making sure programs are fully delivered. In order to do this, access to timely, relevant, and comprehensive data and contracts is key. Equally important is understanding what the data means.
The French oil company Total becomes one of the first major oil companies to announce that they will advocate for the public disclosure by countries of their petroleum contracts and licenses. By coming out in favour of contract transparency, the company is joining ranks with mining giant Rio Tinto, as well as smaller oil companies Kosmos Energy and Tullow Oil. In a statement, EITI Chair, Fredrik Reinfeldt “welcomed and commended Total’s new policy,
How stakeholders from government, civil society and industry worked together to make contract disclosure a reality.
Last month, Ghana launched its new petroleum register, which discloses a wealth of information on the companies extracting the country’s oil and the terms of their agreements with the Government of Ghana. This includes the actual contracts, outlining the legal and fiscal terms and conditions for the companies’ activities.