Post on 04-Jan-2016
description
EXTRACTIVE INDUSTRIES AND PARLIAMENTARY OVERSIGHT: MAKING
THE LINK
Dr. Rasheed Draman
Extractive Sector and Developing Countries
• Many developing countries rich in natural resources
• Challenge: Ensuring that revenue from extractive sector is used to help reduce poverty and improve living standards of population
NATURAL RESOURCES
ENHANCED WELFARE
Extractive Sector Governance
• Transparency and Accountability
• Strong institutions
• Clarity of Goals, Roles and Responsibilities
• Accurate and timely information
Extractive Sector Governance
• Proper policies and regulatory frameworks
• Effective systems and processes for decision-making and implementation
• Proper oversight of revenue management and wealth distribution
Failure of Extractive Governance – “The Resource Curse”
• Conflict• Corruption• Damaged social
contract/compact• Difficult macroeconomics:
volatility excessive borrowing; low savings
• Skewed development
• Lack of diversification/ enclave effects
• Insufficient investment in human resources
• Lack of democracy and human rights
• All leading to low growth & worsened level of poverty
Dividends of Good Extractive Governance
• Peaceful Society• Investor confidence• Diversified economy with
forward & backward linkages to the extractives sector
• Economic Growth• Improved Social
Infrastructure• Shared Prosperity• Positive Corporate Social
Response
THE PARLIAMENT-LED REFORM PROCESS
Weak Governance
System/Structures
Status quo
No or Weak Laws &Institutions
StrongGovernanceFramework
Improved state
Good Laws & Well ResourcedInstitutions
Parliamentary - Representation - Legislation - Oversight
THE EXTRACTIVE INDUSTRIES VALUE CHAIN
Role for Parliament in the Extractive Value Chain
• Assessment of the resource base and potential social & economic impact in exploiting it
• Obtaining prior informed consent of resource owners or communities
Role for Parliament in the Extractive Value Chain
• The Award of Contract relies on:
• Institutional, legal, regulatory and contractual framework
• Open access to title• Local content
Role for Parliament in the Extractive Value Chain
• During Monitoring of Operations (Regulation) important to ensure that it is:
• In line with contract clauses
• In line with international standards
• National cadastre• Geological data centre
Role for Parliament in the Extractive Value Chain
• Fiscal terms choice• Transparent reporting • Procedure to budget EI
revenues• Country economic
policies• Revenue saving and
expenditure• Transparent revenue
redistribution
Role for Parliament in the Extractive Value Chain
• Revenue to benefit the population
• Ensure procurement practice
• Monitor expenditure at local level
A Role for the State??
0 50 100 150 200 250 300
Saudi Aramco
NIOC
Gazprom
Iraqi NOC
PDVSA
KPC
ExxonMobil
RD/Shell
Qatar Petroleum
TotalFinaElf
Abu Dhabi NOC
Sonatrach
ENI SpA
PEMEX
BP
Oil (bn bbl)
Condensate (bn bbl)
Gas (bn boe)
The Case of Ghana
• Parliamentary Centre has supported the Parliament of Ghana since 2009 in strengthening its oversight capacity of its emerging petroleum sector
• Key committees: • the Committee on Mines and Energy• the Committee on Local Government and Rural
Development• the Finance Committee • the Public Accounts Committee
The Case of Ghana
• Support included: • Capacity building to better understand the sector and
make new laws • Training on key governance issues in extractive industries• Facilitation to participate in international conferences and
networking sessions to share ideas• Implementation of public consultation on petroleum bills• Expert analyses and direct input into bills under
consideration and amendments, through memorandum
The Case of Ghana
• Several key results have been achieved: • Parliament adopted the Petroleum Revenue Management Act,
2011 (Act 815)• Parliament rejected a weak Exploration & Production Bill and
insisted redrafting• An independent regulatory body - the Petroleum Commission
was established• An innovation – the Public Interest Accountability Committee
(PIAC) established• Greater insight on extractive revenues and potential increased
demands for accountability• Active Civil Society • Short Guide to Parliamentary Oversight of the Oil & Gas Sector
Oversight Challenges• Oil Partisan Politics• Lack of resources for oversight• Extractive Industry Transparency Initiative (EITI)
Legislation – from voluntary to non-voluntary• Contract Transparency• Disclosure of Revenues/Corporate Taxes• The Africa Progress Panel Report 2013• Freedom of Information Law – “The Right To
Know” Legal Process• Good laws but no resources for implementing the
laws – i. e. PIAC
A United Parliament and Independent Committees
• Effective oversight depends on how united Parliament is in protecting its independence and institutional interests– Partisanship– Executive Dominance/Subordination of Parliament– Fusion vs. Separation of Powers– Winner-takes-all
• How skilled or determined/independent committees are in utilizing powers, rules and tools available to them