Mining Laws and Transparency in Extractive Industries:International Experience and Vietnam’s Perspectives

Agenda8:30-9:00: The Value Chain 9:30-10:30: Issues and International Best Practice in

Formulating the Mining Laws10:30-11:00: Questions and Discussion11:00-11:15: Coffee Break11:15-11:45: EITI and the Natural Resource Charter11:45-12:30: Questions and Discussion

Introduction to the Extractive Industries Transparency Initiative (EITI)

Hanoi, Vietnam 12 October 2009

What does EITI stand for?

EITI in the ‘Value-Chain’

• The basic EITI focuses only on one aspect of extractive industries governance: revenue transparency

Spending the money

SelectingCompanies

Long-termPlanning

CollectingRevenues

DecidingTo Extract

MonitoringService delivery

CreatingA budget

NegotiatingA Contract

EITI

EITI involves multiple stakeholdersNational Multi-stakeholder Group (MSG)

Civil Society

Companies

Government

MSG

EITI Minimum Standards: Each country creates its own EITI

• EITI involves the reconciliation of company payments with government receipts by an independent administrator and disclosure of that information to the public.

• The objective of the EITI is to identify potential discrepancies between payments and receipts and investigate and address the underlying causes.

Source: EITI factsheet

The EITI Criteria In Theory

• The EITI criteria set the minimum standards of EITI implementation

Benefits of the EITI for the Government

• Demonstrate a commitment to transparency and fight against corruption• Improve revenue collection and management processes:

– increased transparency and scrutiny over payments will make it easier to detect corruption + recommendations of the Administrator will help identify management systems’ weaknesses and initiate reforms.

• Improve sovereign ratings: – a country’s ability to raise funds on the international markets (e.g.

through loans) is based on ratings provided by international companies – these ratings depend also on the quality of national governance

• Improve a government’s national or international reputation with its citizens and the international community

Benefits of the EITI for Civil Society

• Open a space for dialogue by engaging multiple stakeholders

• Increase government accountability by increasing the amount of information in the public domain about those revenues that governments manage on behalf of citizens

• Give a voice to civil society in a permanent consultation and participation framework that allows an ongoing discussion with government and companies under internationally agreed rules and monitoring

Growth of EITIS

ource: EITI w

ebsite (June 2009)

30 EITI implementing countries (29 candidate and 1 compliant) and several others such as Afghanistan, Indonesia, Iraq and Ukraine have expressed their intention to sign-up.

The EITI International Governance• The EITI International

Board consists of representatives from EITI implementing country governments, extractive companies, civil society groups, investors, and supporting country governments.

• There is a small Secretariat in Oslo• The highest governing body is the Members Meting at the EITI

International Conference. The last EITI Conference took place in Doha in February 2009.

The EITI International Secretariat• Responsible for turning policy decisions of the EITI Board into

action and coordinating worldwide efforts in implementing the EITI.

• Support to implementation including coordination between supporting countries and assistance providers

• Specific roles include:– Outreach & advocacy– Communicating & sharing lessons learned with stakeholders– Managing a resource center on revenue management &

transparency– Oversight of the validation process

Useful Sources of Information

• The EITI website has general information and access to many useful publications www.eitransparency.org

• The RWI website has lots of information on the EITI and other extractive industry transparency topics www.revenuewatch.org

• The PWYP network website has useful information targeted specifically for civil society organizations and particularly coalitions working on EITI and related initiatives and campaigns www.publishwhatyoupay.org

Key Publications• EITI Rules including the Validation Guide – Brings together

the EITI’s requirements for implementing the EITI (EITI Secretariat, 2009)

• Implementing the EITI – Builds on lessons learned by the countries who led the way on EITI implementation (World Bank & EITI, 2008)

• Drilling Down: The Civil Society Guide to Extractive Industry Revenues and the EITI – Comprehensive guide to EITI issues and the challenges of extractive industry accounting for civil society audience (RWI, 2008)

• EITI Beyond the Basics – Examines some of the best innovative implementation examples from EITI countries going beyond basic EITI (RWI, 2009)

Introduction to the Natural Resource Charter

Hanoi, Vietnam 12 October 2009

From Oil, Minerals, and Gas to Better Development

Current transparency effortsin the ‘Value-Chain’

Prior and informedConsent

Accounting Standards

BudgetMonitoring

Freedom to Information ActContract

Transparency

PWYP

EITI

Discovery and Decision

To Extract

Actual Expenditures and

Development

Revenue Distribution

And Management

Revenue Collection

Awards and Negotiation of Contracts

Why a Resource Charter?

• Need to:– Go beyond transparency to other management

policies– Link and addresses the economic decisions

necessary in different areas of the value chain– Tie academic research with practical experiences– Capture best practice and our evolving knowledge

Natural Resource Charter

Creating a guide for citizens and governments of resource rich countries

to use the opportunities created by natural resource effectively.

www.naturalresourcecharter.org

What’s in the Natural Resource Charter?

• Preamble• 12 Precepts• Detailed descriptions of each

precept• Technical recommendations on

achieving these objectives

To be updated and reviewed annually

The Precepts

Next Steps

• Consultation phase – comments and suggestions welcome (particularly precepts #2 and #12)

• Suggest additions to oversight board• Identify target countries for initial

implementation• Brainstorm means to use this as a

monitoring/advocacy tool