Turning recommendations into reforms

Turning recommendations into reforms

Recommendations in EITI Reports often guide a country on how to improve extractive sector management. They can make an important contribution to policy reform and change. 

The extent to which the recommendations are followed up can significantly influence the impact of EITI implementation on extractive sector reforms. In many countries EITI Reports have been a useful diagnostic tool to highlight weaknesses in government systems.

Examples of recommendations from EITI Reports

Making data accessible.

Recommendations related to making data more available and/or accessible.

  • Government declarations on projects in which it participates should be broken down by company (The Philippines 2012 EITI Report).
  • The online cadaster should be improved to make the license information more available (DRC 2011 EITI Mining Report).
  • The MSG should consider including contracts and beneficial ownership in the next report (Kazakhstan 2012-13 EITI Report).

Improving government/company audit practices.

Recommendations related to strengthening government and/or company audit practices.

  • Government revenue collection monitoring systems should be centralised (Mozambique 2011 EITI Report).
  • Company payments made directly to the Central Bank should be monitored by the Supreme Audit Institution (DRC 2011 EITI Oil&Gas Report).
  • Categorisation of payments to government should be consistent to avoid inaccurate recording of payments (Trinidad and Tobago 2011 EITI Report).

Improving extractive sector governance.

Recommendations focused on legislative, regulatory and administrative reforms.

  • Open licensing rounds should be introduced to make biddingcompetitive (Ghana 2012-13 EITI Reports).
  • The Government and Revenue Authority should ensure that royalty receipts are transferred to local government on time and in accordance with the fiscal framework (Ghana 2011-12 Mining Report).
  • Consistent formula for calculating mineral royalty payments should be established (Nigeria 2007-10 EITI Mining Report).

 

 

From recommendations to action in the Philippines

In the Philippines, the Mining Industry Coordinating Council, a high-level body tasked to implement reforms in the mining sector, has directed government agencies to develop concrete action plans based on EITI recommendations. The recommendations relate to improving the  EITI process and natural resource governance, including giving local government units a clearer picture of how much they receive from extractive Companies and eliminating delays in transfers.

The goal should be transparency that translates to accountability and drives reform: the starting point towards that goal is to address gaps in existing systems that the report has identified.

Alessandra Gay Ordenes, The Philippines EITI National Coordinator

From recommendations to action in Ghana

EITI Reports in Ghana covering the years 2004 to 2011 revealed that extractive sector revenues earmarked for sharing between various national regulatory and oversight bodies, local government authorities, traditional land-owning authorities and communities affected by mining activities did not reach the intended beneficiaries. This was due to a misapplication of these funds, lack of proper accounting for and reporting of the use of these resources, and irregular transfers. Implementing recommendations on timely, regular and full transfers of the funds has resulted in increased accountability at subnational levels, dedicated accounts set up for local governments and guidelines developed by the Minerals Commission for the use of mineral revenues at subnational levels.

Many of the present reforms in the Nigerian oil sector – including the discontinuation of the oil swap arrangements, the review of fuel subsidies, the restructuring of the national oil company, the review of contracts and the management of the joint ventures – are recommendations from the NEITI reports. As well as the recovery of USD 2.4bn of unpaid taxes and royalties, NEITI’s operations are on course to save Nigerians tens of billions of dollars through better management of the oil and gas sector.

Orji Ogbonnaya Orji, Acting Executive Secretary Nigeria EITI