4. Transparency and Accountability

Transparency, by promoting accountability, minimizing waste and corruption, fostering democratic debate, guiding macroeconomic management enhancing access to finance, is fundamental to good governance in the EI sectors.

There is a growing international consensus on the importance of transparency in promoting accountability and good governance, and of its particular relevance to the EI sector. Transparency and accountability are critical for the efficient management of natural resources 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 and/or inactions.

At the same time, transparency is not an aim in itself, but needs to be combined with effective stakeholder dialogue in order to achieve accountability. Improving transparency and accountability require multiple measures, both mandatory (regulatory) and voluntary (multi-stakeholder). 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 implementation. For example, what is an appropriate level of contract disclosure; how can host country and investor country transparency requirements be balanced and how best to engage citizens more directly in monitoring the processes and outcomes).

At the same time, neither are ends in themselves,and the ways of achieving them can be either voluntary or mandatory or a combination of both. 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 implementation. 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?[1]

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: (1) through  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; (2) through competent and non-corrupt institutions with clear and non-overlapping mandates in the regulation and  monitoring of operations; (3) through publically reported, equitable, and progressive fiscal regimes that avoid non-published special deals and minimize tax avoidance and evasion in the collection of taxes; and (4)  through 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.

Additional Reading:


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  • Brian Moore: Is there too much focus on this issue amongst universities and the do gooding public sector in general? Not to mention NGOs. Instead, would not a better focus be on helping countries to make more money from their extractive industries, as opposed… read more