Indonesia recognised as compliant with EITI transparency standard

Clare Short: Indonesia shows that also a country with a large natural resource sector can be transparent.

Wednesday, 15 October 2014 - Indonesia was today accepted as a full member of the EITI.

As ‘compliant’ with the global EITI transparency standard, citizens of Indonesia have access to extensive information about how their natural resources are governed. Industry, government and civil society in the country are working together to inform the debate about the management of its oil, gas and mineral resources.

The international EITI Board designated the country ‘EITI compliant’ at its meeting in Myanmar and congratulated the Government of Indonesia for its sustained commitment and leadership in the implementation of the EITI.

Clare Short, Chair of the EITI said:

“By reaching compliance, Indonesia has shown the world that also a country with a large and complex natural resource sector can be transparent about its resource revenues. What Indonesia EITI has achieved is no small feat. I look forward to seeing how the country continues to make use of its EITI to embed transparency into its government systems and to ensure that natural resources benefit its citizens.”

Dr Monty Girianna, Deputy Coordinating Minister for Energy and Mineral Resources of Indonsia welcomed the decision. He said:

“The Government of the Republic of Indonesia is fully committed in implementing the principles of good governance. Indonesia’s heavy involvement in the Extractive Industries Transparency Initiative is part of its good governance programs and is a show of commitment in creating a transparent and accountable system of governance.”

“The naming of Indonesia as EITI compliant is a privilege and a proof that with hard work and resolute will, bureaucratic and governance reform has transform Indonesia into a country with a stable, transparent and accountable system of governance. We would like to thank our friends and partners in the EITI International Board and Secretariat, as well as the World Bank, who have provided us with cooperation and assistance in achieving this compliant status.”

Rodrigo Chaves, Country Director of the World Bank office in Indonesia, said:

“Given the scale and very complex nature of Indonesia’s extractive sector, achieving EITI compliance is an outstanding achievement. I congratulate Indonesia’s multi-stakeholder Implementing Team and National Secretariat on their hard work in producing a report covering 230 companies who collectively paid almost US $80 billion to the Government during 2010 and 2011. The World Bank Group looks forward to continuing to support this important work.”

The Board’s decision in full:

The EITI Board designates Indonesia as Compliant with the EITI Requirements as of 15 October 2014. In accordance with the EITI Standard:

• Indonesia must be revalidated within three years i.e. Validation will commence on 15 October 2017 or earlier upon request of the MSG. Validation will be conducted in accordance with the EITI Standard.

• Stakeholders in the process may call for a new Validation at any time within that period if they think the process needs reviewing. Where valid concerns exist that a country has become compliant with the EITI requirements, but its implementation of the EITI has subsequently fallen below the required standard, the Board reserves the right to require the country to undergo a new Validation.

• In accordance with the EITI Standard, Indonesia is expected to produce EITI reports annually. EITI reports should cover data no older than the second to last complete accounting period. Indonesia is required to produce the 2012 EITI Report by 31 December 2014 in accordance with the EITI Standard.

• In accordance with Requirement 7.2, Indonesia is required to publish an annual report on the previous year’s activities, detailing progress in implementing the EITI. The annual report for 2014 should be published by 1 July 2015."

In taking this decision, the Board takes note of the complexity of the Indonesian mining sector and the challenges related to tax confidentiality. The Board recognized that Indonesia had taken steps to address these issues, including by issuing waiver letters, develop an inter-ministerial Decree with the aim of addressing the delays that have affected EITI implementation to date, and full government disclosure of all revenues from the oil, gas and mining sector in accordance with EITI requirement 11 (EITI Rules) and Requirement 4.2 (EITI Standard). The Board calls upon the government of Indonesia to increase the coverage of reconciliation of payments and revenues from the mining sector and will monitor progress towards comprehensive reconciliation in the 2012 and 2013 EITI Reports.

The Board congratulates the Government of Indonesia and the EITI Indonesia Implementation Team for its efforts to achieve compliance with the EITI Requirements. In accordance with the transitional arrangements, Indonesia is requested to transition to the EITI Standard as soon as possible, including ensuring timely EITI reporting in accordance with EITI Requirement 2.”

 

Notes

• The EITI is a coalition of governments, companies, civil society groups, investors and international organisations. Learn more at www.eiti.org

• EITI is chaired by the Rt. Hon. Clare Short. Ms Short was the UK Secretary of State for International Development (1997-2003).

• 48 countries are now implementing the EITI standard, and recognised as either EITI compliant or EITI candidate. See the list of countries at www.eiti.org/countries.

• For further information about the EITI Indonesia, please visit the country page on the EITI website and the national EITI website.