'Trust is one of the most critical factors for success.'

Sven works as a program manager for the World Bank’s Extractives Global Programmatic Support (EGPS) Multi-Donor Trust Fund, which supports developing countries govern their oil, gas and mineral resources in a sustainable and transparent manner to reduce poverty and boost shared prosperity. We spoke with Sven on the sidelines of the EITI’s gathering of partner organisations, dedicated to discussing priorities for strengthening extractive industry governance, which was held in Oslo in September 2018.

What do you do and is there a project you are currently working on that you're particularly excited about?

I manage the World Bank’s extractives trust fund. Trust funds are a valuable tool in the World Bank’s portfolio of financial instruments and technical assistance. In the case of EGPS, we have a trust fund that is programmatic, which means its scope is wide and the individual projects are decided upon as the program evolves. This arrangement means we can be more responsive to demand, which is also one of the most important criteria of our decision making. The grants we allocate, which are usually between USD 50,000 and 500,000, are non-refundable and relatively modest in World Bank terms. This implies that they need to be very focused and targeted in order to make an impact.

EGPS currently manages around 50 individual projects that cover much of the extractives sector. An important pillar of EGPS is EITI support. In fact, around 60% of our funds go to EITI implementation at the country level. EGPS has three other pillars: one is focused on local content; others are focused on the legal framework reforms and contracts in the extractives sector; and one that covers social and environmental aspects, artisanal and small-scale mining, gender and others. Such a wide remit makes it important to operate based on very clear selection criteria that focus on impact.

There are some projects that truly stand out, such as our engagement in Iraq, which helps establish an economically viable domestic gas market in a country that still needs to address energy access. Iraq also wastes vast quantities of associated gas during oil production – it’s the second-largest gas flaring country in the world – so we have incorporated gas flaring reduction into the strategy and plan. The project acts as a trigger for World Bank budget support to Iraq in the order of USD 1.1 billion, a tremendous leverage. In terms of challenges, one noteworthy project is focused on capacity-building in Papua New Guinea-Bougainville. Mining has played a controversial role in the past. We had to manage substantial safeguard challenges, but it seems that we’re on track now – with great support especially from our Australian donors. That being said, we’re especially proud of some of our EITI engagements, specifically where our client countries managed to reach satisfactory progress, such as Colombia, Mongolia and Philippines.

How is the EITI’s work and data relevant to what you do?

The outstanding value of the EITI is its capacity to convene a wide array of stakeholders. This was groundbreaking.  The dialogue between civil society and industry has been incredibly helpful. It helped build trust, which, as I see it, is one of the most critical factors for success in the development of a mining sector. If there is no trust in institutions and their capacity to develop an effective framework in which companies can work, it becomes very difficult to build social consensus on the role of mining in a country. And this of course has consequences, not only for the mining sector, but more broadly the economic growth of the country.

What are the policy areas the EITI should prioritise in the run up to next year's Global Conference?

The EITI already has a strong focus on mainstreaming, which to me makes sense. However, the challenge of integrating a currently external process into sector management is substantial. But this is where the World Bank sees an important role for the EITI: to adapt the transparency agenda to local requirements and thereby integrate the concept of transparency into the administration at the national, regional or local level.

It’s clear that beneficial ownership is an emerging topic. There is great enthusiasm about its potential. The World Bank’s position is clear in its support for beneficial ownership disclosure without being sector specific, but more broadly referring to corporate law and administration. In the Extractives unit we support beneficial ownership disclosure, but also believe that for it to become effective, two things have to be taken into account. One is its price tag and the need to balance cost and benefit. Second, we consider that implementation of beneficial ownership disclosure requires strong government commitment. Without true ownership of the process, which would most probably include an ownership that goes beyond the mining sector, implementation will be very challenging.