4. Transparency and Accountability
- 5.1 Policy Context
- 5.2 Sector Legislation: Design
- 5.3 Sector Legislation: Content
- 5.4 Contracts and Licenses
- 5.5 Local Content
- 5.6 The Award of Contracts and Licenses
- 5.7 Regulations
- 5.8 Contract Negotiations and Dispute Settlement
- 6.1 Institutional Structures
- 6.2 An Overview of the Key Governmental Bodies and Agencies
- 6.3 Focus on a Key Player: National Resource Companies (NRCs)
- 6.4 Key Institutional Issues
- 6.5 Efforts at Institutional Reform
- 7.1 Fiscal Objectives
- 7.2 Fiscal Instruments
- 7.3 Special Fiscal Topics and Provisions
- 7.4 Fiscal Systems
- 7.5 Fiscal Administration
- 7.6 Summary and Recommendations
- 8.1 Fiscal Rules for Saving vs. Spending
- 8.2 Fiscal Rules: Savings Funds
- 8.3 Alternative Means of Addressing Fiscal Sustainability
- 8.4 Addressing Volatility: Stabilization Funds
- 8.5 Alternative Means of Addressing Volatility
- 8.6 Spending Choices
- 8.7 Revenue Allocation
- 8.8 Summary
- 9.1 The Approach in the Source Book
- 9.2 What are the Challenges?
- 9.3 Investment
- 9.4 Expenditure Quality Control and Oversight
- 9.5 Objectives
- 9.6 Challenges and Special Issues
- 9.7 General Principles for Response
- 9.8 Policy Instruments
- 9.9 Management and Oversight
- 9.10 Stakeholder Consultation and Participation
- 9.11 Conclusions
Transparency, by promoting accountability, minimizing waste and corruption, fostering democratic debate, guiding macroeconomic management, and enhancing access to finance is fundamental to good governance in the EI sectors.
There is growing international consensus on the importance of transparency in promoting accountability and good governance, particularly in relation to the EI sector in light of the large sums of money involved with EI sector activities, transparency safeguards against many of the powerful incentives for corruption, including high entry costs, multiplicity of actors involved, technological complexity of resource development, complex revenue accounting and tradition of sector secrecy. Transparency and accountability are critical for the efficient management of natural resource revenues throughout the activities considered in Section III of the Source Book. Transparency can limit the opportunities for misuse of power and corruption, while accountability can ensure that those entrusted with the management of public resources are held accountable for their actions or inactions.
It must be clear that transparency is not an aim in itself but must be combined with effective stakeholder dialogue in order to achieve accountability. As will be discussed below, improving transparency and accountabilty require multiple measures, both voluntary (multi-stakeholder) and mandatory (regulatory). For several years now, global norms and standards have been emerging but wide differences exist in the weight given to them by particular players and in their manner of implementatino. Voluntary initiatives led primariy by civil society or international agencies have forged ahead of mandatory measures for many reasons. In the case of both types of measures, questions that arise in the shaping of global norms and standards include the following: (1) what is an appropriate level of contract disclosure; (2) how can host state and investor state transparency requirements be balanced; and (3) what is the best way to engage citizens more directly in monitoring processes and outcomes?[*]
Transparency and accountability are cross-cutting topics because they apply to all segments of the EI value chain. Across the EI value chain, these issues are addressed through: (1) transparency around the decision to extract; (2) transparent and competitive procedures for issuing licenses and allocating mineral or hydrocarbon exploration or production rights in the design of legal, contractual and policy frameworks; (3) competent and non-corrupt institutions with clear and non-overlapping mandates in the regulation and monitoring of operations; (4) publically reported, equitable and progressive fiscal regimes that avoid non-published special deals and minimize tax avoidance and evasion in the collection of taxes; (5) transparent revenue management; and (6) transparent and participatory budgeting based on development priorities with effective sustainable development outcomes in revenue management and allocation (the EI value chain is discussed in detail in Chapters 5, 6, 7, 8 and 9 of the Source Book).
If there is a lack of transparency at any one point in the EI value chain, a spread of misinformation may result, with growing mistrust in the management of the resources. In turn, this can lead to instability and ultimately to conflict. These topics are therefore dealt with in the individual chapters on the EI value chain as well as in the paragraphs below.
- Cisse, O., Requirements for an Effective Mining Cadastre Organisation, Spatial Dimension; link to full text presentation, page 3 of which introduces the concept of a 'mining cadastre';
- Extractive Industries Transparency Initiative; link to website;
- Case study of Nigeria EITI: Making transparency count, uncovering billions, (EITI, 2012); llink to full text document;
- The EITI Fact Sheet (EITI, 2011); link to full text document;
- How to become an EITI Candidate country (EITI, 2011); link to full text document;
- Natural Resource Charter; link to summary document and website;
- 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 DC: The International Bank for Reconstruction and Development / The World Bank, 2006); link to summary document;
- Publish What You Pay; link to Partners page of EI Source Book website (& scroll down);
- Revenue Watch Institute; link to summary document;
Analysis, Policies & Strategies (43)
- Contracts Confidential (in Kazakh)
- Afghanistan, Getting to Gold
- Breaking the Curse: How Transparent Taxatio...
- China and the EU on Resource Governance
- China, CNOOC & other State-owned Firms,...
- Contracts Confidential
- Contracts Confidential (in French)
- Contracts Confidential (in Russian)
- Contracts Confidential (in Spanish)
- Corruption, Transparency and the Resource C...
- Data Overview (in French) of EITI 2005-2011...
- Data Overview of EITI 2005-2011 Reports
- Digging Deep for Profits and Development? R...
- EITI Progress Report 2014
- EITI Strategic Options late-June 2012 Board...
- Enforcing the Rules
- Enforcing the Rules (in French)
- Enhancing the Governance of Africa’s Oil Se...
- Fragmentation or Cooperation in Global Reso...
- In Pursuit of Transparent Trading
- Kimberley Process Washington Final Communiq...
- Latin America Oil, Gas and Mining Transpare...
- Latin American EI Transparency (in Spanish)
- Managing Bribery and Corruption Risks in th...
- Overview, Guiding Principles for Government...
- Pressure for Mineral Supply Chain Traceabil...
- Promoting Revenue Transparency
- PWYP June 2012 Dakar Declaration (in French...
- Rents to Riches, EI Political Economy
- Resource Governance Index 2013
- Responsible reporting of mineral assets
- Revenue Watch Index 2010
- Strengthening Governance and Tackling Corru...
- The Cancer of Corruption
- The EITI Standard 2015
- The Framework for EI Governance in ASEAN
- The Transparency Paradox. Why do Corrupt Co...
- Toward Strengthened EITI Reporting, Summary...
- Transparency in Petroleum Contracts
- Transparency International Corruption Perce...
- Transparency Mechanisms and Movements
- Transparency, UNCTAD Series on Internationa...
- World Bank's Evolutionary Approach: Mining ...
Country Briefings (26)
- Afghanistan EITI Shadow Validation Report
- Brazil Increasing Transparency and Accounta...
- Burkina Faso EITI Report 2011 (in French)
- Chinese extractive firms pay2Govts (doc)
- Chinese extractive firms pay2Govts (in Chin...
- Chinese extractive firms pay2Govts, Annex 1
- Chinese extractive firms pay2Govts, Annex 2
- DRC NRGI Country Strategy Note
- Ghana NRGI Country Strategy Note
- Ghana Tracking Transparency & Accountab...
- Guinea Contract Review Process (ToR)
- Guinea Mining Sector Governance Issues (in ...
- Guinea, Role of RWI (in French)
- Malawi Overview of Corruption and Anti-Corr...
- Malawi, Monitoring African Sovereign Risk
- Mongolia NRGI Country Strategy Note
- Nigeria Oil and Gas Management in Federal S...
- Nigeria, A Critique of Nigeria Extractive I...
- Peru 2013 EITI Report
- Peru, Disseminatiopn & Impact of EITI N...
- South Sudan, Oil and Sustainable Peace
- Sudan Crude Calculations: The Continued Lac...
- Sudan, Pursuing Transparency in the Oil Ind...
- Tanzania NRGI Country Strategy Note
- USA Conflict Minerals and Resource Extracti...
- Zimbabwe CNRG Poor Governance Press Release
Development Programmes (1)
Guides/ Handbooks (8)
Laws & Regulations (7)
Learning Modules and Training (1)
Student Work (2)
Transparency Focus (4)