EITI International Secretariat 3 July Concept note: Pilot on mainstreaming EITI disclosures

Transcription

1 EITI Internatinal Secretariat 3 July 2015 Cncept nte: Pilt n mainstreaming EITI disclsures

2 2 CONCEPT NOTE: PILOT ON MAINSTREAMING EITI DISCLOSURE Cntents Intrductin... 2 Backgrund... 2 Objectives... 3 Scpe f wrk... 3 Timeline... 4 Annex - Entrenching EITI reprting: TRs fr a feasibility study... 5 Annex A infrmatin disclsures required by the EITI Standard Intrductin The Internatinal Secretariat prpses t initiate a pilt n mainstreaming extractive industry transparency in gvernment and cmpany systems. The verall bjective f the pilt is t assess and test different ptins fr mainstreaming disclsure f the infrmatin required by the EITI Standard with a view f maintaining timely, cmprehensive and reliable disclsure. Implementing cuntries will be apprached and encuraged t participate. The Internatinal Secretariat will versee the pilt, maintaining regular cnsultatins with the Wrld Bank and ther partners and regular updates t the Implementatin Cmmittee. Based n the findings frm the pilt, the Internatinal Secretariat culd develp further guidance material t assist implementing cuntries in mainstreaming transparency. As prpsed in IC paper 51-7 Suggested refinements t the EITI Standard, the Bard may als wish t assess the need fr refinements t the Standard ahead f the 2016 Glbal Cnference t encurage and enable mainstreaming EITI disclsures. 2 Backgrund In Brazzaville, the Bard recgnised the imprtance f mainstreaming the EITI int natinal systems and nted the need fr pilt prjects. The Strategy wrkplan included in Bard Circular 191 prpsed that the Implementatin Cmmittee cnsiders develping a prpsal fr a pilt fr testing different ptins fr mainstreaming transparency. The pilt wuld bring tgether experience and reflect develpments already taking place in many implementing cuntries. Sme implementing cuntries already publish data required by the EITI Standard in channels ther than the EITI Reprt. The United States, fr example, publishes federal nn- tax revenue and revenue disbursements in an nline prtal 1. Kazakhstan cllects EITI data as part f an existing reprting mechanism that all subsil users have t cmply with. 1

3 3 Cuntries like Timr Leste have decided t begin wrk n mainstreaming their EITI disclsures, and ther cuntries like Nrway and Peru have expressed an interest. The pilt prvides a framewrk fr mapping ut and testing alternative ways t disclse data and fr sharing infrmatin amng cuntries. 3 Objectives The bjective f the pilt is t assess ptins fr increasing flexibility in where and in what frmat EITI data is disclsed t encurage transparency that is embedded in hw gvernments and cmpanies perate and nt reliant n an annual EITI reprting prcess. The aim is t assess hw timeliness and accessibility f data can be imprved thrugh mainstreamed transparency withut cmprmising data reliability and cmprehensiveness. Embedding disclsure int existing systems, r building and imprving systems that are nt limited t disclsing EITI data, is als likely t reduce the financial cst f disclsing data. The pilt is expected t map ut alternatives t recnciliatin fr ensuring the reliability f revenue data. EITI cuntries nt frmally part f the pilt will als be encuraged t explre ways t strengthen transparency in gvernment and cmpany peratins and t seek embedding EITI disclsure int existing systems. Cuntries participating in the pilt will be encuraged t explre ways f integrating EITI disclsure int existing gvernment and cmpany mechanisms. The pilt wuld nt affect the scpe f disclsure (i.e. all infrmatin required t be disclsed under the EITI Standard will still be disclsed), but ffers flexibility in hw data is disclsed. Participating cuntries will prduce EITI Reprts that rather than cntaining all the infrmatin required in the Standard, pint t where infrmatin is available and assess the reliability, cmprehensiveness and usability f the available data. The EITI Reprt is expected t fill any gaps if data available elsewhere is incmplete, and t prvide a framing cntext. Mainstreaming disclsures aims at aviding verlapping reprting practices. Many cuntries already publish license infrmatin, prductin data and cntracts nline. Where such practices exist, mainstreaming shuld be relatively straight frward. Revenue data may be less available, hwever sme cuntries already publish revenue data regularly ahead f EITI Reprts. In Sierra Lene, fr example, the nline license prtal is directly linked t the mining cadastre system and includes cmpany- by- cmpany revenue data 2. Many internatinal cmpanies are nw prviding tax payment data as part f cuntry- by- cuntry reprting requirements r are disclsing this infrmatin in their annual reprts. Pilt cuntries will be encuraged t cnsider drawing n this data in their EITI prcess and als explre ptins fr disclsing data thrugh alternative channels t the EITI Reprt t imprve the timeliness f data and the sustainability f transparency, and t reduce the financial burden caused by annual data cllectin and recnciliatin exercises. A successful pilt will require supprt and buy- in frm all stakehlders, and strng engagement by the MSG. Supprt frm the relevant gvernment agencies, in mst cases the line ministry, the finance ministry and SOEs, will be needed, as well as frm cmpanies and civil sciety. 4 Scpe f wrk The Secretariat plans t initiate a pilt where cuntries will be encuraged t: 2

4 4 (i) Prduce a feasibility study t assess the feasibility f embedding EITI disclsures in gvernment systems and crprate reprting. Based n the feasibility study, agree a radmap setting ut the timeline and actins needed t mainstream transparency. The draft TOR fr a feasibility study, submitted t the EITI Bard in Brazzaville, is attached in Annex A. (ii) By the end f 2016, ensure that EITI data is disclsed in gvernment systems in accrdance with the scpe and timeline set ut in the radmap. Infrmatin that is nt yet being mainstreamed shuld be disclsed in the EITI Reprt. (iii) Prduce a shrt prgress reprt t be included with the 2015 annual activity reprt (deadline 1 July 2016) and the 2016 annual activity reprt (deadline 1 July 2017). The anticipated utputs f the pilt include (i) a reprt n lessns learnt and implicatins fr the EITI, and (ii) a guidance nte n ptins fr embedding EITI disclsure. 5 Timeline The Internatinal Secretariat prpses the fllwing timeframe fr the pilt: August - September 2015 Identify pilt cuntries Identify need fr technical and financial supprt Octber January 2015 Feasibility studies cnducted in pilt cuntries Stcktake f prgress at the December Bard meeting Define pssible refinements t the Standard t encurage and enable mainstreaming EITI disclsures February 2016 Stcktake n prgress and lessns learnt at the Glbal Cnference; presentatin f radmaps February - December 2016 Integratin f disclsure int gvernment and cmpany systems as per agreed radmap Publicatin f first EITI Reprts reflecting mre mainstreamed transparency Regular reviews n prgress December- June 2017 Assess the utcmes f the pilt, including the feasibility f different ptins fr mainstreamed disclsure, lessns learnt n imprving timeliness and accessibility f data and ptins fr ensuring the reliability and cmprehensiveness f data Develp a guidance nte n ptins fr embedding EITI disclsure int gvernment and cmpany mechanisms

5 5 Annex - Entrenching EITI reprting: TRs fr a feasibility study ENTRENCHING EITI REPORTING: TERMS OF REFERENCE FOR A FEASIBILITY STUDY [COUNTRY], APPROVED BY THE MSG ON [DATE] Cntents Backgrund Objective f the assignment Scpe f wrk Deliverables Cnsultant requirements Administrative arrangements Reference materials:... 8 Annex A infrmatin disclsures required by the EITI Standard Backgrund The Extractive Industries Transparency Initiative (EITI) is a glbal standard that prmtes transparency and accuntability in the extractive sectr. It has a rbust yet flexible methdlgy fr disclsing cmpany payments and gvernment revenues frm il, gas and mining at the cuntry level as well as ther infrmatin abut the extractive sectr such as infrmatin abut the legal framewrk and fiscal regime, licensing practices, state- wned cmpanies, prductin, exprts, etc. The requirements fr implementing cuntries are set ut in the EITI Standard 3. Fr further infrmatin, please see Each implementing cuntry creates its wn EITI prcess adapted t the specific needs f the cuntry. This invlves defining the scpe f infrmatin t be published and explring hw disclsure f infrmatin abut the extractive sectr can be integrated int gvernment and cmpany prtals t 3

6 6 cmplement and strengthen wider effrts t imprve extractive sectr gvernance. T date, mst f the infrmatin required t be disclsed by the EITI Standard has been cllected and made public thrugh EITI Reprts. As f March 2015, EITI Reprts have been published cvering 237 fiscal years 4. EITI Reprts have and will cntinue t be an imprtant tl fr bringing abut transparency t the extractive sectr in implementing cuntries. Hwever, in the lng term, extractive industry transparency shuld becme an integral part f hw gvernments manage the sectr and hw cmpanies perate. Rather than simply relying n the EITI reprting mechanism t bring abut transparency, gvernments implementing the EITI are encuraged t explre hw t make the infrmatin required by the EITI Standard available thrugh gvernment and crprate reprting systems such as databases, websites, annual reprts, prtals, registers, etc. In sme cases, there might already be reprting mechanisms in place that the EITI can build n. In ther cases, such systems may nt exist and need t be built r are incmplete and require imprvements. A key cncern will be ensuring that the published data is cmprehensive and reliable. In this regard the [cntracting party] seeks a cmpetent and credible firm r individual t prduce a feasibility study and develp a radmap fr embedding EITI disclsures in gvernment systems in accrdance with these Terms f Reference. [This sectin shuld prvide further general backgrund infrmatin n EITI implementatin in the cuntry. This shuld include specifying the bjectives fr EITI implementatin as agreed by the MSG and as elabrated in the MSG s EITI wrkplan. A link shuld be prvided t the EITI wrkplan, with additinal cmmentary as required n the current status f EITI Reprting and the MSG s bjectives fr integrating EITI reprting int ther gvernment and cmpany prtals.] 2. Objective f the assignment The bjective f the assignment is t assess the feasibility f embedding EITI disclsures in gvernment systems and crprate reprting. The cnsultant will prduce a feasibility study that (1) assesses t what extent infrmatin that is required in the EITI Standard, r is therwise relevant fr achieving the bjectives utlined in the MSG s wrkplan, is already made publicly available by the gvernment f [Cuntry]; (2) utlines any barriers r gaps in timely, cmprehensive and reliable disclsures, as well as technical r financial supprt needs; (3) dcuments stakehlders views and willingness t embed EITI disclsures in gvernmental and crprate systems; (4) prpses a radmap fr embedding EITI disclsures. This shuld include actins, respnsible parties, timelines, resurce and technical assistance needs. The feasibility study will supprt the MSG in cnsidering entrenching EITI reprting. 3. Scpe f wrk The cnsultant will be expected t undertake the fllwing tasks: 1. Examine the MSG s wrkplan in rder t gain a clear understanding f the bjectives and scpe f [cuntry s] EITI implementatin. The cnsultant shuld als review any annual activity reprts that 4

7 7 have been prduced by the MSG t understand the prgress made in achieving the bjectives and review any actins undertaken by the MSG t address recmmendatins frm any previus EITI reprting exercises and validatins. Where applicable, the cnsultant shuld undertake a review f all past EITI Reprts and Validatin reprt/s t gain an understanding f the current scpe and state f EITI reprting prcess in [cuntry] and areas where further imprvement is needed. 2. Cnsult stakehlders, in particular the members f the multi- stakehlder grup as well as the gvernment agencies invlved in the management f the extractive industries and cmpanies in [cuntry], n their views and cncerns related t embedding EITI disclsures in gvernment and crprate systems. 3. Prduce a feasibility study that: (i) identifies the gvernment agencies and cmpanies that are respnsible fr cllecting and maintaining the infrmatin required by the EITI Standard (EITI Requirements 3 and 4, summarised in annex A); (ii) assesses what infrmatin required by the EITI Standard is already made publicly available by gvernment agencies and in what frmat such as n n- line cadastres and registers, gvernment webpages n legal, fiscal and administrative arrangements fr the sectr, etc. The cnsultant shuld als review what data is made publicly available by cmpanies in their reprts and n their websites and explre ptins fr extending this disclsure; (iii) assesses whether the infrmatin is up t date, cmprehensive (includes all infrmatin required by the EITI Standard), and reliable. If there are several public surces fr the data, the cnsultant shuld assess whether they are cnsistent; (iv) where infrmatin gaps are identified and/r where there are cncerns abut data reliability, recmmends measures t address the gaps, including imprving the timeliness, cmprehensiveness, reliability, availability and accessibility f the infrmatin. The cnsultant shuld assess if there is infrmatin available in gvernment systems that is nt publicly available but culd easily be published nline. The feasibility study shuld als identify any ther bstacles t making the infrmatin required by the EITI Standard publicly available in gvernment reprting systems. (v) utlines a credible apprach t disclsure f the financial infrmatin required by the EITI Standard (Requirement 4 and 5). The feasibility study is expected t make recmmendatins n hw t embed financial disclsures in cmpany and gvernment systems, fr example by integrating data int nline license cadastres r including a database and/r reprting templates n gvernment, cmpany and/r natinal EITI websites. Based n the review f previus EITI reprts, including levels f discrepancies and the strength f auditing and assurance prcedures in cmpanies and gvernment entities that have participated in EITI reprting, the cnsultant shuld prvide ptins addressing recnciliatin f financial data. This culd include full recnciliatin as per cnventinal EITI reprting, spt- checks recnciling certain transactins r a certain percentage f ttal disclsures, etc. The cnsultant is expected t explain the ratinale fr the recmmended ptin. 4. Based n the feasibility study, the cnsultant shuld suggest a radmap fr embedding EITI disclsures, taking int accunt Requirement 2 fr timely EITI reprting. The radmap shuld

8 8 include actins that are needed t fully embed disclsures in gvernment and cmpany systems, respnsible parties, timelines, resurce and technical assistance needs. Where significant wrk is needed t make the data publicly accessible thrugh gvernment systems, the radmap shuld suggest a step- by- step apprach specifying the infrmatin can be surced frm existing surces, and the infrmatin that wuld need t be partially r fully cllected r disclsed thrugh the EITI reprting prcess. The cnsultant is expected t take int accunt the lcal premises (e.g. level f access t Internet) and internatinal best practices. 4. Deliverables [The assignment is expected t cmmence n [date], culminating in the finalisatin f the feasibility study by [date]. The prpsed schedule is set ut belw: Signing f cntract Desk review Cnsultatin with stakehlders and data cllectin Draft feasibility study Final feasibility study, including presentatin f actin plan [date] [date]- [date] [date] - [date] [date] [date] 5. Cnsultant requirements The Cnsultant will need t demnstrate: Technical and financial skills, including knwledge and wrk n transparency and gvernance, public finance and financial accuntability, and multi- stakehlder dialgue. Preferably, prven experience related t the EITI. Knwledge f the il, gas and mining sectrs r ther natural resurces sectrs, preferably in [cuntry]. A demnstrable track recrd in similar wrk. [Add infrmatin abut any ther skills and cmpetencies required, staff days etc.] 6. Administrative arrangements [Add infrmatin abut reprting lines, supprt t the cnsultant during the assignment, ther lgistical and administrative arrangements t be prvided by the MSG.] 7. Reference materials: The EITI Standard, in particular Requirements 2-5, EITI implementatin guidance ntes issued by the Internatinal Secretariat, ntes- implementing- cuntries, in particular the guidance ntes n scping (#9) and defining materiality (#13). The cnsultant is advised t cntact the EITI

9 9 Internatinal Secretariat fr any questins r clarificatins related t the EITI Standard and the implementatin f the EITI requirements; Agreed upn prcedures fr Independent Administratrs, including standard EITI reprting templates, available frm the Internatinal Secretariat; Implementing EITI fr Impact: A Handbk fr Plicymakers and Stakehlders, in particular chapters 4 and 5; Examples f Scping Studies, available frm ntes- implementing- cuntries and the Internatinal Secretariat; and [Add ther relevant surces f infrmatin, including links t EITI Reprts, infrmatin abut licensing systems, n- line cadastres and registers, gvernment webpages n legal, fiscal and administrative arrangements fr the sectr, etc.]

10 10 Annex A infrmatin disclsures required by the EITI Standard This annex summarises the infrmatin disclsures that are required by the EITI Standard and that shuld be assessed in the feasibility study. In undertaking the assessment, the cnsultant must refer t the detailed disclsure requirements utlined in the EITI Standard in rder t ensure that all details are fully cnsidered. The legal framewrk and fiscal regime gverning the extractive industries (EITI Requirement 3.2); Key features f the extractive sectr, including any significant explratin activities (EITI Requirement 3.3); Infrmatin abut the cntributin f the extractive industries t the ecnmy fr [year] in accrdance with EITI Requirement 3.4; Prductin and exprt data (EITI Requirement 3.5); Where applicable, infrmatin abut the rle f state- wned enterprises (SOEs) in the extractive sectr and the financial relatinships between the gvernment and the SOE, quasi- fiscal expenditures, and gvernment wnership in il, gas and mining cmpanies perating in [cuntry] (EITI Requirement 3.6). Infrmatin abut revenue allcatins and distributin f revenues in accrdance with EITI Requirements 3.7 and 3.8; The availability and cmprehensiveness f a public license register as well as infrmatin abut license allcatin prcesses and prcedures (EITI Requirements 3.9 and 3.10); The availability f a public register f the beneficial wners f extractive cmpanies (EITI Requirement 3.11); The [cuntry s] plicy and practices n disclsure f cntracts and licenses that gvern the explratin and explitatin f il, gas and minerals and any refrms underway (Requirement 3.12); The revenue streams that must be disclsed in accrdance with EITI Requirement 4.1 and 4.2. The analysis shuld cver: The taxes and ther revenue streams listed in 4.1.b; Any revenues related t the sale f the state s share f prductin r ther revenues cllected in- kind (4.1.c), Any revenues related t infrastructure prvisins and ther barter arrangements (4.1.d); Any mandatry and vluntary scial expenditures by extractive cmpanies (4.1.e); Any revenues related t transprtatin payments (4.1.f); Any revenues cllected by subnatinal gvernment frm il, gas and mining cmpanies (4.2.d); Any transfers f extractive industry revenue between central and subnatinal levels f gvernment (4.2.e); and Any transactins between SOEs and ther gvernment agencies (4.2.c).