Implementing country feedback on proposed changes to the 2016 Standard

This page documents the feedback the International Secretariat has received from implementing countries on the IC's working group options for adjustments to the 2016 Standard. The feedback was received between January and February 2019. It is reflected in the table below.

Russian version of the feedback.

 

Table of contents (issues addressed)

  1. Gender
  2. State-owned enterprises (SOEs)
  3. Licensing transparency
  4. Contract transparency
  5. Production and export data
  6. Systematic disclosures
  7. Commodity trading
  8. Project-level reporting
  9. Subnational transfers
  10. Environmental reporting
  11. Open data efforts
  12. Impact and outcomes from EITI implementation
  13. Consequences related to compliance and deadlines for implementing countries

1. Gender

Reference document IC paper pp. 4-5 and 15

Requirement coveredProposed changesFeedback from implementing countriesHow comments have been addressed

1.4 - MSG governance

6.3 - Contribution to the economy

7.1 - Public debate

  • Encouraging MSGs to consider gender balance in representation;
     
  • encouraging disclosure of employment figures by project, role and gender;
     
  • and encouraging gender considerations in dissemination of EITI data.

Representatives from South-East Asia expressed concerns regarding the feasibility of implementing the proposals on gender due to the cultural context and lack of influence of the MSG on the genders of the appointed government representatives.

A national coordinator from Central Asia explained that they had requested gender-disaggregated employment information from companies. As for MSG members, there was support for meritocracy and equal opportunities: MSG members should be selected taking into account their capacities and readiness to work and gender shouldn’t be a criterion for the selection. It was suggested not to have a mandatory wording on this.

There was general agreement from Francophone African national secretariat representatives that the theme was important.

A national coordinator from Anglophone West Africa commented that the proposals on gender made a lot of sense. It was suggested that in the future, if considering a revision of principle 1, the relevant group could mention inclusiveness in addition to gender equality and poverty.

A national coordinator from Latin America and the Caribbean said the changes to the Standard related to gender considerations were all acceptable

Comments from MSG members from other constituencies:

Industry representatives from an MSG in a Francophone African country noted that there were no observations on the proposed changes in all three requirements.  

The Secretariat has taken note of general support for encouraged aspects and has not suggested any changes to the proposal.

2. State-owned enterprises (SOEs)

Reference document IC paper pp.5-6

Requirement coveredProposed changesFeedback from implementing countriesHow comments have been addressed

2.6 - State participation

4.5 - Transactions related to state-owned enterprises

6.2 - Quasi-fiscal expenditures

  • Clarifications to definition of SOEs and quasi-fiscal expenditures, coverage of transfers related to joint ventures and subsidiaries, and loan details to be disclosed;
     
  • expecting SOEs to disclose financial statements;
     
  • and encouraging further disclosures on operations and governance.

A representative from South-East Asia said the proposals were too detailed. Loan details as proposed could be numerous and confidential. It was noted that annual audit reports already contained information on debts and liabilities which should be enough.

A representative from Latin America and the Caribbean said the changes to the Standard related to improving systematic disclosures around state participation and SOEs were all acceptable.

A representative from Francophone Central Africa noted that the Standard put too much emphasis on SOE transparency, with less focus on multinational companies. 

One representative from Latin America and the Caribbean expressed concerns around adding further expectations or encouragements under these requirements. It was added that there were barriers around disclosing audited financial statements.

Comments from MSG members from other constituencies:

Industry representatives from an MSG in a Francophone African country noted that more clarity on the definition of quasi-fiscal expenditures was indeed needed. 

The Secretariat has taken note of general support for encouraged aspects and will seek to clarify that the proposal does not suggest to require further details to be disclosed.

To place equal burden on SOEs and private companies, the Secretariat has suggested to add to Requirement 4.1 that “companies are expected to publicly disclose their audited financial statements, or the main items (i.e. balance sheet, profit/loss statement, cash flows) where financial statements are not available.”

3. Licensing transparency

Reference document: IC paper pp. 6-7

Requirement coveredProposed changesFeedback from implementing countriesHow comments have been addressed

2.2 - License allocations

  • Clarification that Requirement 2.2 covers contracts and license allocations and encouraged strengthened disclosures

A representative from Latin America and the Caribeean said the changes related to license allocations were all acceptable.

A national coordinator from Anglophone West Africa suggested to also add ‘suspended’ licenses under the proposed Requirement 2.2.e.

Comments received appear to be supportive of the proposal.

The Secretariat has taken note of general support for the proposal, and has proposed to include suspended licenses under the proposed Requirement 2.2.e.

4. Contract transparency

Reference document: Annex A

RequirementProposed changesFeedback from implementing countriesHow comments have been addressed

 

2.1 - Legal framework

2.4 - Contract disclosure

  • Clarifications for fiscal regime to cover the types of contracts, and what constitutes a ‘policy’ on contract disclosure.

Further options for 2.4.a.:

a) Requiring contracts to be made public with deadline for implementation

b) Requiring contracts signed after a deadline to be made public

c) Moving towards an expectation that contracts should be made public

d) No change to Requirement 2.4.a ahead of the Global Conference 

Several implementing country representatives stated support for changes to Requirement 2.1 and 2.4.b

A country representative from Latin America and the Caribbean commented that in their context, requiring contract disclosure might prove problematic. The government’s policy on contract transparency cited strict confidentiality clauses in local legislation and specific contracts that prohibited disclosures of terms and conditions of contracts. Option 3 would be a feasible/preferable option as it moved towards an expectation that contracts were disclosed rather than requiring disclosure. Due consideration had to be given to the different circumstances in each country. In the specific country, due to the integrated nature of the energy industry, there were arguments that upstream contract disclosure would impact on the negotiating power of the state-owned enterprise. While Option 3 was the preferred option, if Option 4 were accepted there would be room for promoting more rigor related to discussions on contract transparency. An in-depth study could be conducted among EITI implementing countries to highlight why 21 out of the 51 countries did not disclose contracts and highlight recommendations and a way forward tailored to each country’s needs. This would help identify a “roadmap” towards disclosure.

A representative from Anglophone West Africa stated support for option 4, or option 3 if this did not entail ‘penalties’ in cases where contracts were not published. The representative commented that for the sake of meaningful transparency to all stakeholders, implementing countries should be required to publish summary versions of their contracts, and be encouraged to use EITI websites or other means to publish contracts.

One representative from Central Asia expressed support in principle for option 1 but noted that it might not be a feasible option for most countries with the indicated deadline. It was suggested that countries have until 1 July 2020 to disclose all contracts, giving them more time to be able to adopt the necessary legislation.

The Secretariat takes note of comments suggesting that contract transparency is important, while requiring contract disclosures at this point may be problematic. The Secretariat also takes note of some support for option 3, and general support for the proposed changes to Requirement 2.1 and 2.4.b.

The Secretariat takes note of the comments on making contracts more accessible and will reflect this in the updated guidance. The Secretariat also takes note of the suggestion for more in-depth analysis of the challenges faced by implementing countries that don’t publish contracts.

5. Production and export data 

Reference document: IC paper pp. 8-9

RequirementProposed changesFeedback from implementing countriesHow comments have been addressed

3.2 - Production

3.3 - Exports

  • Encouraging disclosures of production and exports by company and project

A representative from South-East Asia said they were not sure if the proposal relating to energy transition metrics was feasible for them.

A country representative from Latin America and the Caribbean stated that the changes to Requirements 3.2 and 3.3 were acceptable. However, it was added that it was important to explicitly differentiate between changes being encouraged and those that were required.

Comments appeared to be broadly supportive of the proposal. The importance of distinguishing between required and encouraged disclosures was emphasised.

The Secretariat has taken note of general support for encouraged aspects and has not suggested any changes to the proposal.

6.  Systematic disclosures

Reference document: IC paper pp. 9-11 and Annex B

RequirementProposed changesFeedback from implementing countriesHow comments have been addressed

4.1 - Comprehensive disclosure of taxes and revenues

4.9 - Data quality and assurance

  • Shifting emphasis to comprehensive and reliable disclosures by reporting entities rather than reconciliation

Some national coordinators raised the issue of mistrust in government figures, explaining that citizens trusted the data because of the reconciliation process undertaken by the Independent Administrator.

A national coordinator from South-East Asia explained some of the issues the MSG was concerned with related to systematic disclosures: How the MSG could retain its oversight functions on disclosure, how to keep leveraging the EITI brand to require disclosure and maintain credibility even without physical reports, and how to address the concern that compiled data will again no longer be available, as this had been the added value of EITI Reports. 

A representative from Latin America and the Caribbean raised that mainstreaming would have implications on the competencies required for national secretariat staff.

There was no opposition from national coordinators from Francophone Africa to these changes, although wider consultations with MSG members were needed.

A representative from Latin America and the Caribbean supported the proposed changes on 4.1 and 4.9. It was suggested that the Secretariat could do an annual audit of implementing countries’ data management and assurance systems. 

Comments from MSG members from other constituencies:

Industry representatives from an MSG in a Francophone African country suggested that the proposed modifications to Requirements 4.1 and 4.9 be delayed until the Global Conference to ensure that all national MSGs had the opportunity to comment.  

Comments appeared to be broadly supportive of the proposal. Several comments were raised related to the capacity needed by national secretariats and MSGs to move towards systematic disclosures.

The Secretariat has taken note of general support for encouraged aspects and has not suggested any changes to the proposal. The Secretariat takes note of comments on capacity needs and the importance of reliability of and trust in the data.

7.  Commodity trading

Reference document: IC paper pp. 11-13 and Annex C

RequirementProposed changesFeedback from implementing countriesHow comments have been addressed

4.2 - Sale of the state’s share of production or other revenues collected in kind.

  • Clarifying the scope of the requirement;
  • encouraging disclosures of buyer selection;
  • encouraging disclosures by buying companies.

A representative from South-East Asia raised concerns regarding the level of detail, particularly on disclosure per cargo which they found tedious when preparing their commodity trading report.

Some representatives from Francophone Africa suggested that companies be required to disclose information about production volumes and costs, providing useful information to countries to inform their negotiations of contracts.

A representative from Latin America and the Caribbean commented that changes around commodity trading transparency were acceptable.

A representative from Latin America and the Caribbean expressed concerns around adding further expectations or encouragements on commodity trading disclosures. It was noted that the MSG did not have access to information about buyers, given that the latter were foreign companies.

Comments from MSG members from other constituencies:

Industry representatives from an MSG in a Francophone African country noted that they did not have further observations on the proposed changes.

The Secretariat has taken note of general support for encouraged aspects and has suggested that cargo by cargo disclosures are encouraged, not required.

The Secretariat has also taken note of calls for improved transparency of production volumes and costs (cost oil), and for more detailed sales data by private companies.

8. Project-level reporting

Reference document: IC paper pp. 13 and Annex D

RequirementProposed changesFeedback from implementing countriesHow comments have been addressed

4.7 - Level of disaggregation

  • Clarifying the scope of the requirement;
  • encouraging disclosures of buyer selection;
  • encouraging disclosures by buying companies.

A representative from Latin America and the Caribbean commented that Option 1 was acceptable and in line with their approach.

A national coordinator from Anglophone West Africa commented that project level reporting was complex due to the leeway given companies to report certain revenue streams at company level.

A representative from Central Asia expressed support for option 2, noting that option 1 was not applicable to all countries and did not clearly outline the role of the MSG, whereas option 2 let each country agree a definition of “project” and therefore provided more flexibility.

A representative from Latin America and the Caribbean expressed support for option 2, noting that it was necessary for the discussion to take place within MSGs and document it. It was noted that there might be pushback from companies and governments to move towards project level reporting.

Comments from MSG members from other constituencies:

Industry representatives from an MSG in a Francophone African country noted that they did not have further observations on the proposed changes.

There appeared to be general support for the ‘preferred’ option 1.

9. Subnational transfers

Reference document: IC paper p. 13 

RequirementProposed changesFeedback from implementing countriesHow comments have been addressed

5.2 - Subnational transfers

  • Encouraging further disclosures of management of subnational transfers

A representative from South-East Asia expressed support for proposals on revenue management.

A national coordinator from South East Asia questioned why only a description of any extractive revenues earmarked for specific programmes or geographic regions was being disclosed rather than disclosing the figures themselves.

A representative from Latin America and the Caribbean said that changes to Standard 5.3 were acceptable but the language of Standard 5.2 should remain the same.

A national coordinator from Anglophone West Africa was supportive of this proposal, noting that it would have great value for transparency.

Comments from MSG members from other constituencies:

Industry representatives from an MSG in a Francophone African country noted that they did not have further observations on the proposed changes.

Comments appeared to be broadly supportive of the proposal, with a suggestion to also encourage disclosures of the actual revenue allocations at the subnational level.

The Secretariat has taken note of general support for encouraged aspects and has suggested to encourage information on actual disbursements.

10. Environmental reporting

Reference document: IC paper pp. 14-15 

RequirementProposed changesFeedback from implementing countriesHow comments have been addressed

6.1 - Social expenditures by extractive companies

Proposals yet to be agreed:

a) Revising Requirement 6.1 to cover environmental expenditures

b) Encouraging disclosures of contextual information related to   environmental monitoring

c) Encouraging links to existing disclosures on climate risks 

d) No changes to the EITI Requirements, scaling up guidance and support

Representatives from South East Asia expressed support for EITI doing more on environmental reporting. There appeared to be general support for the proposals, while it was noted that the proposal on energy transition metrics might be challenging.

Representatives from Francophone Africa expressed support for requirements on the environmental impact of the extractive sector, but they also emphasised the importance of information on the local social and economic impact of the sector. Some highlighted that none of the proposed changes encouraged more disclosures about the ASM sector.

A representative from Latin America and the Caribbean commented that changes to Requirement 6.1 were acceptable. It was explained that the civil society constituency on the MSG had developed an environmental reporting template on data including: disclosure of GHG emissions, disclosure of major environmental incidents (such as oil spills), compliance with air and water pollution rules etc. Countries could also be asked to disclose laws related to environmental management.     

A national coordinator from Anglophone West Africa suggested to also consider disclosure of information related to environmental hazards.

A representative from Central Asia supported options 1 and 2, noted that option 1 was the most feasible. While option 2 was more ambiguous, it was deemed realistic and understood as part of the information collection and reporting process on the regulatory framework around environmental considerations. However, there were concerns around option 3, arguing that it was too ambiguous for countries to understand what was expected, and that it might weaken the Standard.

A representative from Latin America and the Caribbean expressed support for option 2, noting that it clearly outlined what information would be disclosed, whereas option 3 needed more clarifications.

Comments from MSG members from other constituencies:

Industry representatives from an MSG in a Francophone African country expressed their support for option 1.

The Secretariat has taken note of general support and concerns raised and will reflect these in the upcoming EITI Board deliberations.

11. Open data efforts

Reference document: IC paper pp. 15-16 

RequirementProposed changesFeedback from implementing countriesHow comments have been addressed

 

7.1 - Public debate 

7.2 - Data accessibility

 

Proposals yet to be agreed:

a) Revising Requirement 6.1 to cover environmental expenditures

b) Encouraging disclosures of contextual information related to   environmental monitoring

c) Encouraging links to existing disclosures on climate risks 

d) No changes to the EITI Requirements, scaling up guidance and support

There was no strong support nor objection to the proposals.There was no strong support nor objection to the proposals.

12. Impact and outcomes from EITI implementation

Reference document: IC paper pp. 16-18 

RequirementProposed changesFeedback from implementing countriesHow comments have been addressed

7.3 - Discrepancies and recommendations from EITI Reports

7.4 - Review the outcomes and impact of EITI implementation

  • Encouraging MSGs to consider recommendations in EITI reporting;
  • providing more flexibility for how MSGs choose to assess progress 

Several national coordinators highlighted the need for a common understanding of what impact meant. They said an annual review of impact was not feasible because impact took a while to be visible. One explained that what is required was an annual review of impact and if the review said there was no impact, then it was important for it to be documented. They welcomed the proposal that the APR be replaced by impact and outcome reviews.

A representative from Latin America and Caribbean was supportive of proposed changes to Requirement 7.3 related to discrepancies and recommendations from EITI Reports as well as review of the outcomes and impact of EITI implementation.

A national coordinator from Anglophone West Africa said the encouragement to consider recommendations had to be made stronger (i.e. expected), as many MSGs would be likely to leave this up to the IA, when MSG ownership was key for extractive governance. 

A national coordinator from Anglophone West Africa stated support for the proposal.

Comments from MSG members from other constituencies:

Industry representatives from an MSG in a Francophone African country noted that they did not have further observations on the proposed changes..

The Secretariat has taken note of general support for the proposal and the calls for improving the measuring of impact.

13. Consequences related to compliance and deadlines for implementing countries

Reference document: IC paper pp. 18-20 

RequirementProposed changesFeedback from implementing countriesHow comments have been addressed

8.3.c.i on consequences for non-compliance with Requirements related to stakeholder engagement

  • Clarification that implementing countries must achieve meaningful progress or beyond on stakeholder engagement to avoid suspension;
  • adding a category for ‘outstanding’ progress;
  • clarification that suspension is temporary.

A representative from Latin America and the Caribbean was supportive of changes to Section 8 and Requirement 8.3.

Comments from MSG members from other constituencies:

Industry representatives from an MSG in a Francophone African country noted that the idea of introducing an additional category for “outstanding” progress was welcome, but requested to clarify the difference in practical terms with regards to “satisfactory” progress.

The Secretariat has taken note of general support for the changes and has not suggested any changes to the proposal. The Secretariat also notes that there would be no practical implications with regards to “satisfactory progress.”