TRAINING WORKSHOP REPORT

   

Training Workshop for Latin America and the Caribbean MSG members and National Secretariat

From Tuesday November 28 – Thursday November 30 2017 in Santo Domingo, Dominican Republic.

 

1. Introduction

 

The goal of the workshop was to explore the outlook for EITI implementation in the region and discuss the opportunities to strengthen EITI implementation at the country level.

The training included the following topics:

  • Extractive and Transparency – Trends and Challenges
  • EITI implementation goals
  • Resources for EITI implementation and financial sustainability
  • Validation
  • Outlook for the EITI – Mainstreaming
  • Mainstreaming in practice
  • Parallel sessions on EITI Requirements – Technical issues and mainstreaming
  • Action plans for mainstreaming
  • EITI outcomes and impact
  • Beneficial Ownership

2. Attendance

 

The workshop brought together MSG and National Secretariat representatives from Colombia, Dominican Republic, Guatemala, Guyana, Honduras, Mexico, Peru, the Philippines, Suriname and Trinidad and Tobago.

The GYEITI delegation composed of the following representatives:

  1. Hilbert Shields, Industry Representative
  2. Wallace Ng-See-Quan, Government Representative
  3. Paul Atkinson, Civil Society Representative
  4. Diane Barker, National Secretariat

3.Workshop Sessions and Discussion

 

Day 1: Tuesday 28 November 2017:

Topics 1. Extractive and Transparency – Trends and challenges.

This session focused on the key trends and challenges in the extractive industry governance. 

Highlights of some of the unique challenges facing countries in the region:

  1. Lower commodity prices
  2. Reduced investment and economic activity in the extractive industries
  3. Scarcity of resources for EITI implementation
  4. Meeting the growing demands of EITI standard

Notwithstanding these many challenges, local communities within the region continue to demand greater transparency, accountability and tangible development outcomes from the extractive sector.  It was emphasized that where there is greater transparency within the sector there is trust and more economic activities.  EITI implementing countries with natural resource wealth are therefore, looking to gain public trust with the management and governance of the people’s patrimony through transparency.  Recognizing these challenges, more so the financial constraints facing countries in the region, Mr. Sven Renner, Program Manager, Extractives Global Programmatic Support – World Bank informed participants that the EITI initiative is seen as priority for the World Bank and the World Bank stands ready to render assistance to implementing countries with EITI related activities, further develop their mining sector and assist where required with reform of the legal framework governing the sector. 

Trends: – Several countries have made great progress through EITI implementation.  Thus, the Dominican Republic and the Philippine have the disclosure of contract policy as part of their EITI framework.

 

Lessons learnt and Recommendation for MSG consideration:

  1. Financial constraints continue to plague EITI implementing countries. Hence, the need to supplement government’s contributions with donors assistance. It was highlighted that the World Bank, USAID and the Government of the United Kingdom are some of the many donors for EITI activities. Thus, the MSG may want to recommend these donors for government’s consideration. Renner of the World Bank has stated that priority is always given to countries that are in dire need of such assistance.
  2. Drawing from what was achieved in the Dominican Republic and the Philippines the MSG may want to encourage government (recognizing it will be a gradual process) to take all necessary steps to publish and disclose all contracts for natural resources.

 

Topic 2: EITI implementation goals. What have we achieved?

Participants were required to give a presentation on the following:

  • Identification of the main benefit or impact that EITI has achieved for their country to date.
  • Objectives EITI should focus on in the future?

Mr. Hilbert Shields presented on behalf of the GYEITI Delegation. Some highlights of his presentation were:

Guyana’s achievements.

  1. EITI Candidacy (major accomplishment for Guyana)
  2. The implementation of EITI has created an air of expectancy in the country for greater disclosure of contracts and management of the natural resources.

Current Challenges:

  1. Capacity building for the National Secretariat
  2. Institutional strengthening in all agencies:
  3. Government
  4. Civil Society
  • Industry

Needs:

  1. Human and Financial Resources
  2. Mentoring and Guidance from other EITI countries in the region.

 

Topic 3: Resources for EITI implementation and financial sustainability

Each participating country was given the opportunity to summarize its situation on its work plan regarding budget allocation and funding sources.  Guyana presented on the projected budget for the 2017-2019 work plan.  With the guidance from the international secretariat, the team recognized that the work plan does not reflect disaggregated information such as identification of specific donors and their contributions, staff salary derived from the government’s budget. As such the GYEITI delegation gave an undertaking to resubmit a detailed work plan that will reflect these information.      

 

 

Recommendation:

The National Secretariat with guidance from the International Secretariat to rework the work plan to reflect the recommendations of the International Secretariat and resubmit same.  It would require full cooperation and support by all parties involved.

 

Topic 4: Validation

This session addressed main questions around the Validation process and highlighted how validation can be used to strengthen implementation.  The four stage process of validation were highlighted:

  1. Preparation for validation by implementing countries
  2. Initial data collection and stakeholder consultation by the International Secretariat
  3. Quality assurance by independent validator, including comments from the MSG
  4. EITI Board review and decision.

To stimulate the discussion on this topic countries that were already validated were asked to give recommendations to other countries to prevent what is called the ‘hammock effect’.  Countries yet to be validated were encouraged to document the entire validation process not limiting same to physical documentation but include decision making of industry, civil society and other key stakeholders. This is necessary because the agenda for each sector is unique and must be understood. Dissemination of information on EITI is necessary to have dialogue with key stakeholders and public debates.

Participating countries were given the opportunity to hear about the success story of the Philippines as lesson learnt and possibly draw from their experience to enhance their EITI implementation.

EITI in the Philippine – a story of success

Ms. Maria Karla Espinosa, National Coordinator of the Philippines shared the outcomes and impact of EITI implementation in the Philippines.  Some key outcomes and impact within the Philippines that GYEITI may draw from are:

  1. Sustained disclosure and dialogue among key stakeholders (government, civil society and industry).
  2. Reforms in existing systems as a result of the recommendations of the MSG and the EITI process in general
  • Policies
  • Processes/procedures
  • practice
  • perception
  1. Integration of EITI data in existing local government reporting system through the creation of a data management tool.
  2. Creation of interactive portal for contracts and maps of extractive operations in the Philippines
  3. Creation of tool for monitoring implementation.

 

 

Strategy employed:

  1. EITI was made part of broader policy agenda. Policy reforming the Philippine mining sector; Open Government; Transparency/Freedom of Information
  2. Synergy – Engage all (government) stakeholders within and outside the MSG.
  3. Pro-active involvement and assistance (National Secretariat and MSG)
  4. Project management approach. Adopt project management processes and tools.

 

Lesson learnt and Recommendation for MSG consideration:

The Philippine treats each activity on their work plan as a project. This resulted in wider participation and active involvement by all stakeholders. The GYEITI MSG may want to consider converting each activity on the work plan as a project since it would create greater impact and have positive outcomes.  Thus the hiring of a project coordinator to help plan and execute projects would be beneficial in this regard.

 

Day 2 November 29, 2017

Topic 1:  Outlook for EITI – Mainstreaming

This session focused on the opportunities and challenges associated with EITI mainstreaming.   

In 2016, the EITI Standard was revised to encourage “mainstreamed” EITI implementation which will allow countries to build on their existing reporting system and practices for EITI data collection rather than duplicating the process through EITI reporting.

As such many EITI implementing countries have already taken the initiative to make the information required by the EITI Standard available through government and corporate reporting systems namely their databases, websites, annual progress reports, portals.  This helps to ensure that this data is timely, reliable and accessible. Thus, mainstreaming has the potential to increase the effectiveness of EITI, while lowing the cost of implementation.  However, it was noted that this form of reporting should not be seen as an overnight process and countries that are now implementing the EITI standard would have to gradually transition into this form of reporting since it requires the political will and commitment of the Government to open government agencies systems to public scrutiny.  It would also require a collaborated effort by government and companies to develop the tool and reconfigure their database portal to allow for this form of information disclosure.  Moreover, winning stakeholders’ trust with this form of reporting is absolutely necessary. 

 

Lessons learnt and Recommendation:

  • Mainstreaming is a gradual exercise and provides an opportunity for reform in the extractive sector and by extension all government entities. Thus the MSG may want to eventually consider this form of reporting as a long term goal for EITI implementation.

 

Topic 2: Parallel sessions on EITI Requirements – Technical issues and mainstreaming.

Participants were divided into groups to explore key aspects of EITI implementation which included but not limited to materiality, roles and responsibilities of the MSG and the National Secretariat.

At this session participants were afforded the opportunity to ask questions relating to:

  • Materiality, its scope and scope of the EITI report. 
  • The roles and responsibilities of the MSG and the Secretariat. This topic was exhausted with questions and pellucid answers received by the moderator of the roles and responsibilities of the MSG and the Secretariat. 

Recommendations

Key take away point during this discussion:  The National Secretariat needs to be proactive, take an active and leadership role in the EITI implementation process.  In this regard there is an absolute need for the Secretariat to be adequately staffed, staff should have clearly defined roles and responsibilities, and each staff must be team driven and have the ability to listen and incorporate where necessary the suggestions and ideas of others.  This should aid in the smooth operation and execution of work within the National Secretariat.

 

Day 3 November 30, 2017

Topic 1: EITI outcomes and impact

The EITI requirements relating to outcomes and impact seek to ensure that stakeholders are engaged in dialogue about natural resources revenue management.  The EITI Reports lead to the fulfilment of the EITI Principles by contributing to wider public debate and stakeholders’ engagement. Thus turning recommendations into reforms and monitoring that the country is achieving its goals in the hallmark of EITI.

This session focused on how to monitor and evaluate the progress made in achieving implementation goals and national priorities.  In that light the EITI implementation of other countries such as Colombia was shared with participants.  It was noted that the country action plan must line up to the national priorities and any activities undertaken must be cohesive to the political climate of the country. It was further noted that implementing countries should have indicators to measure the national impact of EITI implementation.  Participants were encouraged to make EITI activities interesting to stakeholders so as to generate their interests and involvement in the process.  MSG were encouraged to make recommendations to see if their governments will adhere and implement the recommendations. 

The Philippines success story was shared.  This country has seen many of the recommendations made by its MSG implemented into policies and legislative reform.

 

Recommendations:

The GYEITI MSG must be actively involved in the EITI implementation process. The MSG should be encouraged to use EITI as the launching base to bring about changes and reform in law and other policies as they relate to the governance and management of the extractive industry.

 

Topic 2: Beneficial Ownership

This session focused on the EITI requirement to disclose the beneficial owners of oil, gas and mining companies by 2020.  Participants were asked to share their progress on the BO roadmaps and identify possible next steps and support needed to move the agenda forward.

At this forum it was discovered that Guyana is in a better position that many countries across the region as it relates to the road map for beneficial ownership. This is so since  the Anti Money Laundering and Countering the Financing of Terrorism Act (No 2) Act 2015 defined beneficial ownership under Section 2.

Pursuant to the AMLCFT Act beneficial ownership means

ownership by a natural person or persons who ultimately exercise individually or jointly voting rights representing at least twenty-five per cent of the total shares, or otherwise have ownership rights of a legal entity; or ownership by a natural person or persons who ultimately owns or controls a customer or the person on whose behalf a transaction is being conducted and includes those persons who exercise ultimate effective control over a legal person or arrangement.”

Like Guyana, many countries across the region have set the threshold to at least 25% of total shares.  However, it was discovered that because the threshold is set for at least 25% per cent many companies tend to lower the threshold of total shares owned by an individual in a company as a means of evading the disclosure of beneficial information.  Nonetheless the Act provides the base for the beneficial ownership road map for GYEITI.

 

Recommendations

  • The MSG must determine what is important for Guyana.
  • All politically exposed persons to be identified.
  • Develop a cadaster system where extractive industries database with regards to contracts, leases, ownership etc. can be readily and easily accessed.
  • Encourage disclosures that are less than twenty-five percent. This would require an amendment to section 2 of the ALMCFT Act (No 2) Act 2015

 

 

Conclusion

In conclusion the workshop was timely, proved fruitful and beneficial to the GYEITI team that attended.  Our work has now begun with sixteen (16) months remaining to submit our first report.  It is therefore necessary that we work smart by utilizing our time wisely to execute the activities on the work plan.  Countries in the region that have walked this journey have pledged unwavering support to us.  Thus, we should be encouraged to seek all the necessary support and guidance when required. We should also be encouraged (MSG and Secretariat) to be more proactive in the EITI implementation process to bring about the changes we would like to see in the governance and management of the extractive sector so that EITI can be a success story for Guyana.   

 

Recommendations

  1. Seize the opportunity to approach external donors such as the World Bank for assistance to fund the GYEITI activities since donors funding/contributions should be reflective in the work plan
  2. The current work plan must be redone to reflect greater details of each activities.
  3. Activities in the work plan that can be converted into project is encouraged and recommended. This has the propensity to create an environment for greater engagement and involvement of all stakeholders which can result in greater outcomes and impact of EITI implementation in Guyana.  Thus the need for a project coordinator for the Secretariat.
  4. The 2016 EITI Standard was revised to include mainstreaming reporting. However, mainstreaming is a gradual exercise and provides an opportunity for reform in the extractive sector. Thus, the MSG may want to encourage Government to consider this form of reporting as a long term goal for EITI implementation.
  5. The National Secretariat needs to take an active and leadership role in the EITI implementation process in Guyana. Greater team work is encouraged.
  6. The GYEITI MSG should be encouraged to use EITI as the springboard to bring about changes in the management and governance of the extractive industy. As such the MSG may want to encourage government to take all necessary steps to publish and disclose all contracts for natural resources.
  7. As it relates to beneficial ownership the MSG must:
  • Determine what is important for Guyana.
  • Politically exposed persons to be identified.
  • Develop a cadaster system where extractive industries database with regards to contracts, leases, ownership etc. can be readily and easily accessed.
  • Encourage disclosures that are less than twenty-five percent.