EITI Board: progress made, but improvements needed to consider EITI compliance.
In reaching this decision, the Board recognised the magnitude and complexity of the challenges facing the government in implementing EITI in the country. The Board commended the Government and stakeholders for their commitment to the EITI Principles and Criteria, and particularly applauded EITI stakeholders for their dedicated efforts in a challenging environment.
EITI Chair, Clare Short said:
“The DRC still receives shockingly little for its mineral resources. It is not surprising that there are great challenges for the DRC to produce reliable and comprehensive EITI reports, but it is making progress and generating important debate. As the data becomes more reliable and more comprehensive and the debate more widespread, the EITI will help identify areas for improvement in the government and company systems and create momentum for reform. Alongside government efforts on contract and license transparency and other reforms, the EITI in the DRC could be a powerful tool for a better governed sector.”
Since it became an EITI Candidate in 2008, the DRC has completed two EITI Validations. The Board concluded that the country has made significant progress towards improving transparency and accountability over the last five years. DRC has disclosed revenue figures from the extractives sector in three EITI Reports.
Despite this progress, however, the Board found that the quality of EITI Reports did not yet meet all requirements in the EITI standard, particularly requirements for full disclosure and assurance of the reliability of the figures.
Following a review of DRC’s latest Validation Report, the Board has identified corrective actions to be implemented in the next twelve months necessary to reach EITI Compliant status. The Board encouraged all stakeholders to use this temporary suspension as an opportunity to give full attention to implementing the identified corrective actions.
The suspension can be lifted when the Board is content that the agreed corrective actions have been completed satisfactorily. EITI compliance will be verified through a Secretariat Review conducted within the next twelve months. If the suspension is in effect for more than one year, beyond 17 April 2014, the Board will consider delisting the Democratic Republic of the Congo. In this case the country would lose its status as EITI Candidate and would no longer be considered an EITI implementing country.
UPDATE 19 APRIL: Included the full wording of the Board's decision
The Board's decision:
The Board agreed that the Democratic Republic of Congo is temporarily suspended. The suspension will be lifted if the Board was content that the remedial actions recommended to achieve compliance had been completed satisfactorily. Compliance will be verified through a Secretariat Review conducted within the next 12 months. If the suspension is in effect for more than one year, i.e. beyond (17 April 2014), the Board will consider delisting the Democratic Republic of Congo.
The Board noted the progress in reporting payments and revenues from the oil and mining sectors and commended the MSG for its efforts and leadership in EITI implementation. The Board called on the government and multi-stakeholder working group to ensure that the corrective actions agreed by the Board are implemented in full, and tasked the EITI International Secretariat with providing regular progress reports to the EITI Board.
The Board agreed the following corrective actions:
- In accordance with requirement 9, agree a clear definition of materiality addresses which revenue streams are included within the scope of the reporting process, including addressing payments to and from state owned enterprises, the coverage of payments and revenues to sub-national government entities and the coverage of in-kind payments, infrastructure provision or other barter-type arrangements. The Board welcomed that the 2010 report covers the “Chinese contract”, which is required in order to meet requirement 9(f).
- In accordance with requirement 11, the government is required to ensure that all relevant companies and government entities participate in the reporting process, including the full participation of state owned enterprises. The Board highlights the suggestion in requirement 11(b) that where a number of small operators pay revenues which are individually not material, but collectively material, the government discloses the combined benefit streams from such small operators.
- In accordance with requirement 12, the government ensures that company reports to the independent administrator are based on accounts audited to international standards.
- In accordance with requirement 13, the government ensures that government reports to the independent administrator are based on accounts audited to international standards.
- In accordance with requirement 14, the government ensures that all companies within the agreed scope of the reporting process comprehensively disclose all material payments in accordance with the agreed reporting templates.
- In accordance with requirement 15, the government ensures that all government entities within the agreed scope of the reporting process, including at the sub-national level where relevant, comprehensively disclose all material revenues in accordance with the agreed reporting templates.
These corrective actions could be addressed by publishing a supplementary 2010 EITI Report, or through the 2011 EITI Report. It is a requirement that the 2011 EITI Report is published by 31 December 2013.