Otto et al - Transparency Governance and the Management of Revenue Streams

full all chapter5 chapter6 chapter7 chapter8 chapter9

chapter4 chapter5 chapter6 chapter7 chapter8 chapter9

Transparency and Accountability

Policy, Legal and Contractual Framework

Sector Organization and Institutions

Fiscal Design and Administration

Revenue Management and Distribution

Sustainable Development

Otto, J., et al, Transparency, Governance and the Management of Revenue Streams, in Mining Royalties: A Global Study of Their Impact on Investors, Government and Civil Society, (Washington D.C.: The International Bank for Reconstruction and Development/The World Bank, 2006)

The authors in their last chapter deal with the issues of transparency and revenue stream management in the extractive industries. They note that as a result of the resource curse syndrome, corruption and civil strife in resource-rich countries there has been an increasing call for good governance and transparency by many international organizations like Publish What You Pay and the Extractive Industries Transparency Initiative (EITI).

General principles which affect the standard of disclosure such as confidentiality, relevancy, auditability and timeliness of reports are discussed by the authors. They note the challenges encountered by stakeholders in meeting the standards of disclosure. For example, some of the issues include: whether a company should make disclosures as an individual entity or as a group; choice of accounting and auditing standards; disclosure or non-disclosure of special tax packages; validation of revenue streams by independent agencies; and the importance of reporting other benefit streams accruing to local communities.

The authors also examine the EITI initiative on transparency with a case study experience of the Kyrgyz Republic. While other countries may learn from the Kyrgyz experience, the authors suggest that each country must develop its own methods, systems and legal structures in implementing the EITI principles. They, however, suggest that countries could, among other things, design equitable and globally competitive tax systems; weigh immediate fiscal rewards that which may be gained against long term benefits of a sustainable mining industry; and select a royalty that can easily be administered.

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