The South Pacific island state becomes the 36th country that implements the EITI
The island state in the South Pacific will now implement the global EITI standard. This will ensure transparency of the payments to Solomon Islands' government from its increasingly important mining sector.
The international EITI Board approved Solomon Islands' application for EITI Candidate status at its meeting in Lima 27 June 2012. As an EITI Candidate country, it has to start disclosing payments from its extractives sector, and meet all the requirements in the EITI standard within 2.5 years to become EITI Compliant.
Bringing all stakeholders to the table
On 20 June 2012 the government, civil society organisations and extractive industries operating in the country signed a Memorandum of Understanding, establishing the Solomon Islands Extractive Industries National Stakeholder Group (SIEINSG) that will oversee implementation of the EITI.
Civil society organisations in the country are already engaged and campaigning to ensure that the revenues from gold mining and future mining operations contribute to development. The World Bank provides technical assistance to EITI implementation.
Heavy dependence on resource exports
Solomon Islands is heavily dependent on income from primary resource exports. Since 1963, with the inception of large scale commercial forestry development, logging revenues have been the main revenue earner for the economy (e.g., 17.5% of GDP in 2008). However, logging revenues are expected to decline dramatically by 2015. In response to this expected decline the government has committed to develop Solomon Islands' abundant mineral and energy resources.
From tensions to development
Primary resource exploitation has been central to the country’s development aspirations and its associated challenges. Resource related grievance is cited as the main explanations for the destabilizing civil war (“the Tensions”) that divided the country between 1998 and 2003. The Gold Ridge mine, the only producing operation in the country then and now, has been cited as both a cause and a target of the conflict that took place at the mine site and in Guadalcanal during the uprising. With this background, how the mining sector develops and is managed is not only sensitive, but critical to sustainable development outcomes in the country.
Despite these challenges there is strong economic potential in Solomon Islands' mineral sector. Potential mineral deposit of copper, gold, zinc, bauxite, and nickel have been identified in Guadalcanal, Isabel, Choiseul, and Western Province. To date three companies have been granted mining licences and there are 16 companies prospecting in the country. The Gold Ridge mine is now owned and operated by Allied Gold Plc. In 2011 the company accounted for 2.5% of GDP and 16% of exports. Projections from the Finance Ministry estimate that it will contribute 5.7% of real GDP in 2012 and 6.3% in 2013.
Map data ©2012 GBRMPA, Google, Tele Atlas, Whereis(R), Sensis Pty Ltd