Impact of the Extractive Industries Transparency Initiative (EITI)

on the Promotion of Transparency and Accountability

in Southern and East Africa

Conference Report21 May 2012, Westin Hotel, Cape Town

CONTENTS

IntroductIon

SeSSIon 1: EITI globally and ITs ImpacT on ThE promoTIon of rEvEnuE TransparEncy

SeSSIon 2: EITI progrEss, ImpacTs and challEngEs In souThErn and EasT afrIca: vIEws of naTIonal sEcrETarIaTs

SeSSIon 3: EITI progrEss, ImpacTs and challEngEs In souThErn and EasT afrIca: cIvIl socIETy’s posITIon

SeSSIon 4: vIEws of ExTracTIvE companIEs from drc and ZambIa on ThE EITI

SeSSIon 5: ThE EITI ExpErIEncE In ZImbabwE

SeSSIon 6: how To EncouragE addITIonal afrIcan counTrIEs To adhErE To ThE EITI

SeSSIon 7: EITI rEforms and fuTurE sTraTEgIc plans

Key recommendatIonS

LISt of partIcIpantS

abbrevIatIonS

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8

10

12

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15

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INTRODUCTION

on 21st may 2012, the first regional conference for southern and East africa on the Extractive Industries Transparency Initiative (EITI) was held in cape Town. Jointly organised by the EITI International secretariat and the southern africa resource watch (sarw), the conference brought together representatives from national EITI secretariats, civil society organisations and mining companies from across southern and East africa.

The conference was attended by Ms Clare Short, Chair of the EITI International Board, and a team from the EITI International Secretariat as well as participants from global organisations, such as the World Bank, Revenue Watch Institute, Open Society Foundations (OSF), Open Society Initiative for West Africa (OSIWA), Open Society Initiative for Southern Africa (OSISA) and ONE.

The overall aim was to evaluate the EITI’s impact on the promotion of transparency and accountability in southern and East Africa. Its specific objectives included:

•ExplainingtheinternationalEITIprocess,including discussing the emerging strategy;

•Sharinglessonslearntandbestpractisesintheimplementation of EITI in the region;

•AgreeingonmessagestotakebacktotheEITI International Board on opportunities and challenges in the region;

•Agreeingonmechanismstohelpnationsin their efforts to become candidate and compliant countries and discussing how best to support these mechanisms;

•Discussingdeeperandwiderprocesses,which link better to other transparency and accountability initiatives at the international level; and,

•Debatingthemeritsofholdinganannualeventto promote the EITI in the region.

The conference was officially opened by Sisonke Msimang,theExecutiveDirectoroftheOpenSociety Initiative for Southern Africa (OSISA), who outlined the rationale behind hosting the EITI conference ahead of the major OpenForum on ‘Money, Power and Sex: The Paradox of Unequal Growth’, which was organised by the four Open Society Africa Foundations from 22-24 May. She stressed that the governance and management of the extractive industries were now at the heart of the debate about Africa’s future.

Msimang said that OSISA had created SARW to produce cutting-edge research, foster policy dialogue and advocate around resource governance in ten countries in southern Africa – namely Angola, Botswana, the DemocraticRepublicofCongo(DRC),Lesotho,Malawi, Mozambique, Namibia, Swaziland, Zambia and Zimbabwe. In particular, SARW focuses on encouraging greater transparency and more prudent – and more pro-poor – policies in relation to the exploitation of the region’s wealth of minerals, timber, oil and gas. She added that SARW has always been a firm supporter of the EITI and had provided technical and financial support to EITIsecretariatsincountriessuchasDRCand Zambia – and was keen to promote the adoption of EITI in every country in the region.

DrClaudeKabemba,DirectorofSARW,thenoutlined the institution’s support for the EITI in the region and listed the key objectives of the conference. He also stressed the need to shift the mode of engagement by key stakeholders to ensure that mining companies were part of the process and were encouraged to actively participate – and pointed to the positive reaction from some companies, which had sent representative to the conference.

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SeSSIon one: EITI globally and ITs ImpacT on ThE promoTIon of rEvEnuE TransparEncy

This session covered the EITI’s impact internationally in relation to promoting transparency and accountability and increasing the revenues collected by governments. It also aimed to spark a general debate about future EITI guidelines and strategic efforts to link EITI more effectively with broader transparency and accountability initiatives.

Ms Clare Short, Chair of EITI, opened the session with a speech that focussed on promoting the global implementation of the EITI. She explained that the EITI was a response to the fact that many resource-rich countries also had extremely high levels of poverty – and was an attempt to make governments take responsibility for better natural resource management.

In 2006, an EITI International Board was set up with representatives from the extractive industries, governments and civil society organisations. An International Secretariat was also established with its head office in Oslo. Today the EITI has 35 implementing countries – 2/3rds of which are in Africa.

Ms Short suggested that “If all African member states could work together and collaborate within the EITI framework, they could become a real force during discussions on how certain important governance matters could be structured.” She challenged African states to combine forces so that they could secure real control over their resources. However, in order to achieve this, she stressed that African countries must apply the EITI fully so that its impact can be felt. She recognised that “in spite of progress in establishing a strong foundation, we have not yet managed to ensure transparency leading to proper utilisation of revenue.”

She pointed to the fact that the reliance on revenue from extractive industries reduces the interest that governments of resource-rich coun-tries have in being accountable to their citizens. This is why people must maintain the pressure on governments – but in order for the pressure to bear fruit a large number of people must be in-formed and integrated into the movement. “The population of a country must be informed about the extent of the revenues from the extractive industries – but the people must also demand that their money is well spent,” she said.

Ms Short argued that ‘compliant’ should refer to minimum standards – and that countries needed to do more to bring about real accountability in the extractive industries.

She maintained that the EITI is a superb founda-tion for greater transparency and accountability. However, it is just a start. Countries must be encouraged to continue publishing reports about the extractive industries sector – and to produce reports that are comparable to the levels of transparency seen at the international level. The International Secretariat requires reports from stakeholders in the field in order to publish them internationally. These reports allow for easier exchange of experiences between countries and regions, and help to design general recommenda-tions for the International Secretariat on how to restructure and improve the EITI.

Ms Short also suggested the need to create discussion groups to work with civil society organisations and mining companies to encourage countries to exploit their natural resources in the most rational and beneficial manner.

dIscussIons

1. problem of natural resources and conflicts

Most participants thought that the EITI was limited in its application, particularly in areas of conflict,suchaseasternDRC.Howisitpossible

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to promote transparency in natural resource management in conflict-affected areas? Should the EITI contribute to conflict resolution?

Ms Short believes that the EITI cannot resolve every problem and that it would be a mistake to set too many targets for the standard. However, she was clear that in the case of minerals and conflicts, the EITI does have a role to play but that this should always be complementary to the bodies mandated to keepthepeace,suchasMONUSCOinDRC.The UN Group of Experts has made it clear that the conflict there is fuelled by the illegal exploitationofeasternDRC’smassivenaturalresources and that this shows the importance of promoting the legal, transparent and accountable exploitation of resources.

2. the link between transparency and accountability

There was consensus that the EITI has promoted transparency through the publication of figures. This is an important foundation. Participants also agreed that transparency should not be an end in itself – but that it must lead to accountability. While there has been progress in terms of the publication of figures through the EITI, it has not yet led to accountability. There are still a number of institutional challenges at country level that need to be overcome to ensure that all relevant information about the extractive industries is available. However, there is a consensus that accountability has not been enhanced in most African countries and it is an area that the EITI must focus on.

Ms Short argued that the problem with many African countries lies in their inability to apply existing laws and that real change should come from within those countries. For example, Nigeria has a lot of work to do because most of its people are still not benefiting from its vast natural resources. Ms Short stressed that it was vital to keep battling to improve transparency since

this would help the population to demand better natural resource governance.

3. ownership of the eItI considering africa’s large membership

Civil society representatives were adamant that since Africa makes up 2/3rds of the EITI member-ship, it should have more influence over the direc-tion the EITI takes. They were also clear about wanting to expand the EITI across the continent but the lack of political will and solidarity at gov-ernment level was limiting progress. In particular, there was a feeling that Heads of State were not genuine about adopting the initiative. And despite civil society’s enthusiasm, it lacks the capacity and financial means to push the process forward through advocacy and lobbying. The meeting suggested that foreign aid could assist African civil society organisations to strengthen their capacity.

Ms Short responded that “governments had the tendency to not want to be accountable,” which is why it is necessary for civil society to be strong enough to continue pushing to promote transpar-ency. She added that it was necessary to find ways to influence Heads of State and pointed to the African Union’s Mining Vision as one potential way. Indeed, by using the African Mining Vision it might be possible to get Heads of State together to discuss transparency in the extractives sector. She also said that the International Secretariat would see whether it would be possible to include transparency discussions at AU Heads of State meetings but admitted that this approach could prove counter-productive if it appears as if outsid-ers were dictating to African countries.

Ms Short said that it would be a great day for Africa if the entire continent adopted the EITI. However, there is still a long way to go and there is a need for greater African and international solidarity to support the implementation of the EITI in candidate and compliant African countries – and to promote the expansion of the EITI to every other country on the continent.

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4. Successes of the eItI

The participants all agreed that the EITI had made a lot of progress since it was launched in the region. There was an appeal for the concept of transparency to be expanded beyond revenue to include the entire value chain. Ms Short reiterated that it was necessary to speak not only about transparency of revenues but also contracts, in particular provisions regarding tax matters. There was also debate about the question of minimum standards in relation to governance – since setting a very high target might not attract other countries and investors to join the process.

SeSSIon tWo: EITI progrEss, ImpacTs and challEngEs In souThErn and EasT afrIca: vIEws of naTIonal sEcrETarIaTs

This session concerned the challenges and opportunities related to the implementation of the EITI in four southern african countries – the drc, madagascar, mozambique and Zambia – and one East african nation – Tanzania. all the countries that have signed up to the EITI had published their latest EITI report with the exception of madagascar, which had been sus-pended from the EITI due to political instability.

The first speaker, the EITI/Mozambique Coordinator, Rogerio Ossemane, stated that the Government of Mozambique decided to join the EITI in 2008 – the same year that it appointed the Ministry of Mineral Resources as the entity responsible for carrying out the process of accession to the initiative. In May 2009, the EITI International Secretariat accepted Mozambique as an EITI candidate country after reviewing its application, which included the government’s commitment to participate in the EITI and to work with all interested parties in the process.

Ossemane said that various measures had been taken to move this process forward, such

as the production and dissemination of the first and second EITI reconciliation reports and submission of the validation report to the International Secretariat. In August 2011, the EITI Board communicated that Mozambique had made meaningful progress in implementing the EITI. The Board added that Mozambique would remain a candidate country until February 15, 2013 and recommended a number of remedial measures. Mozambique has now completed these measures and is in the process of putting forward a request for a review by the International Secretariat.

The national EITI secretariat of Mozambique is made up of five people and has the support of development partners such as the World Bank. A three-year action plan was introduced in 2011 and the country hopes to publish its third report in 2013 in order to be finally approved. A programme to increase the capacity of stakeholders has also been launched.

ThesecondspeakerwastheEITI/DRCCoordinator,ProfessorJeremyMackDumba,who began his presentation with a few key principles, including “Publicise all extractive industry payments to the State and publicise all the revenue received by the State from the extractiveindustries.”HestatedthattheDRCbecame a member of the initiative in 2005 and had just published its second report in March 2012, which related to 2008-2009. The first report was published in 2010 and covered 2007. The delay in the publication of the second report meant that the country was unable to attain the required compliance but another extension has been granted to theDRCtopublishitsthirdreportforthe2010 financial year, which if adhered to could resultinitsapproval.TheDRCCoordinatoremphasised the importance of this meeting, which was initially supposed to take place inKinshasa,butwasmovedtoCapeTownon the recommendation of the International Secretariat and SARW.

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The third speaker was a member of EITI/Tanzania,InnocentLughaBash.Hestatedthat his country became a member of the EITI in February 2009 and its first report was approved in May 2011. He said that the impact of the EITI on Tanzania could be seen in the two ways – an increase in State revenue from the extractive industries and the implementation of various on-going reforms, including:

•Legalreforms;•Localgovernmentreforms;•Publicmanagementreforms;and•Anationalanti-corruptionactionand

strategy programme.

Tanzania’s second report will be published in 2012 and work will be carried out with auditors to analyse deviations from the first report. With regard to challenges, Tanzania has finished drawing up a legal framework for transparency and comments have been obtained from various groups on the EITI law, which could be introduced by the end of this year. The speaker concluded by saying that EITI is bringing about real, positive change in the extractive sector in Tanzania.

The Madagascar Coordinator, Tahiny Tsarabory Judicael, stated that his country had been accepted as a candidate country in February 2008 and that both a national committee and secretariat had been set up in 2011. The first report was published in September 2011. However, the country is currently suspended from the EITI due to the political situation. The speaker stated that the country’s political environment was improving. He added that several companies have come out in support of the EITI process and that steps had been taken to involve Chinese companies. The current target is to amend the law, in particular to make it compulsory for companies to be involved in the EITI process.

The Coordinator claimed that the EITI had en-couraged real progress in Madagascar, including:

•Sparkingagenuinedebateontheuseofextractive industry revenues;

•Bringingaboutarevolutioninthegovernanceofthe sector; and,

•Ensuringrespectforminingtaxlaws.

The Zambia secretariat was not represented. The chairperson sent his apologies. The World Bank representative, Anwar Ravat, briefed the meeting on the state of the EITI in Zambia. He stated that the implementation of the EITI in Zambia has been effective and that the second EITI report would be distributed as soon as possible throughout the country. Furthermore, the process for drawing up the third report had already been agreed upon. He indicated that there is active participation by all stakeholders in the EITI/Zambia multi-party group, including the new government.

dIscussIons

The discussions after these presentations were fruitful, especially with regard to the:

•Efficiencyofthegroupsofstakeholders,inparticular the attitude of the government when confronted by companies that do not want to abide by the government’s wishes;

•Problemsofimplementingtheinitiativeinconflict-affected countries;

•Questionofaccountabilityandcommunicationstrategies;

•Commitmentandeffectivenessofcivilsociety;and,

•Difficultiesinpromotingtransparencywithoutthe financial commitment of the government and with some key enterprises, such as Chinese companies in most countries.

Madagascar’s suspension was discussed. Its suspension was due to the presence of a key stakeholder (the government) that is not rec-

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ognised by the international community and is therefore illegitimate. This situation makes it difficult for the international secretariat to collaborate with the EITI secretariat. Mada-gascar was suspended a year ago and could be reinstated within the next six months if there is political progress. It was stressed that Madagascar is not unique. Guinea and Yemen have also been suspended for country-specific reasons. Nevertheless, Ms Short acknowledged the quality of the work done by the Madagascar secretariat.

There was a strong view from civil society representatives that the experiences from EITI implementing countries have exposed the EITI’s limitations. The argument is that EITI outcomes are not quantifiable. The series of regular EITI country reports – replete with receipts and payments from mining, oil and gas companies to governments – only satisfy the necessary condition – showcasing revenue changing hands from companies to governments. The real public concern is whether the EITI is having an impact on people’s everyday lives. Citizens expect the EITI to increase government revenue, root out corruption and guarantee the equitable distribution of extractive industries generated revenue.

The EITI must expand to evaluate whether contracts comply with international conventions and standards vis-à-vis local commitments. The corresponding recommendation that the meeting advanced, which was repeated throughout the day, was for the EITI International Board to ensure that on-going reform efforts enhance the efficiency and effectiveness of the EITI by expanding its scope to include contract transparency, increased negotiating capacity of communities, improved income distribution through equitable delivery of social services, and minimisation of the negative impacts of mining on local people and the local environment.

SeSSIon tHree: EITI progrEss, ImpacTs and challEngEs In souThErn and EasT afrIca: cIvIl socIETy’s posITIon

civil society representatives were present in order to discuss their participation in the EITI process, as well to outline their views on the efficiency and impact of their national processes.

Taking to the floor, the Zambian civil society delegate, Mwiya Mwandawande, started his speech by indicating that the initiative in Zambia is ‘technically’ presided over by a government official from the Ministry of Finance, but that he is constantly absent – so his deputy, who is from civil society, takes charge. However, the delegate questioned whether Zambian civil society was really taking advantage of this situation. There are five civil society members on the Zambian EITI committee, including three civil society organisations, as well as one representative of traditional leaders and one representative of trade unions. It seems that there is no solidarity between the civil society representatives who are in the multi-stakeholder group and those who are not. Those participating in the multi-stakeholder group do not feel obliged to be accountable to other civil society organisations, which mandated them. There is also no mechanism to compel them to report to their civil society peers. This lack of collaboration and transparency and the absence of any kind of feedback mechanism mean that civil society as a whole is in an awkward – and weakened – position and that its voice does not usually represent the voice of the majority and for this reason it is not considered by the other members of the multi-stakeholder group.

The civil society representative from Madagascar, Ernest Joseph Gilbert, stated that there were four civil society representatives on the multi-party group. He informed the meeting that Madagascar experienced problems during the compilation of the first EITI report due to

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problems on the civil society platform. While the second report was being compiled, a new platform was created specifically around natural resources so that civil society could discuss the report in detail. However, unfortunately, no time was given to civil society to do this. The report was published without checking whether civil society contributions had been taken into account – and the result was a number of inconsistencies in the report (for example, ten companies that were supposed to be included in the report were missing).

It is remarkable that in all areas in Madagascar where there are mining operations, there is already a civil society structure. In spite of the political situation, the speaker indicated that there is active participation of the three stakeholders and that open and democratic discussions do take place in order, for example, to decide on the accuracy level for the report. Furthermore, in compiling the report, all details arediscussedbyallthestakeholders.Directeffects have definitely been noted following the implementation of the EITI in Madagascar, including the establishment of a national ‘Publish What You Pay’ coalition.

IntheDRC,Congolesecivilsocietyisveryactivein the EITI process. Indeed, civil society is the driving force behind the EITI – and has four representatives on the executive committee. For example, it was Congolese civil society that was entrusted with the distribution of both the firstandsecondEITIreports.ADRCcivilsocietydelegate to the regional conference said that four key issues needed to be taken into account:

•Challengesduetoweakgovernanceandon-going conflict;

•Existenceoftaxhavens;•Generalcorruption;and,•Diversityofnaturalresourcesinavastcountry.

DRCcivilsocietydeploresthesaleofsharesinCongolese public enterprises to companies based

in international tax havens. It utterly condemns this practise, which is based on complicity between the Congolese government and western companies. Transparency is critical.

For Tanzanian civil society, the process in their country kicked off in difficult circumstances when the government was suddenly forced to carry out mining reforms. It had to satisfy the population, which felt that extractive companies were earn-ing more money than the Tanzanian State. But civil society and extractive companies were not prepared for the government to suddenly decide to join the initiative, and consequently there were some problems with the first report. However, by 2010, all the key stakeholders were more organ-ised and had developed a deeper understanding of the initiative. Tanzanian civil society acknowl-edges that everyone involved in the process is on a learning curve but that the situation is definitely improving as they prepare the country’s second report. Civil society delegates on the committee are appointed by their civil society colleagues. Some of the activities that are undertaken by civil society organisations include outreach workshops and seminars; media interaction and networking; reconciliation report analysis; and the publication and dissemination of a popular version of the first reconciliation report. How-ever, the biggest weakness has been the inability of civil society to carry out EITI report-based outreach activities to allow for a fair assessment of their efficiency, effectiveness and impact.

The representative of civil society from Mozambique said that the experience with EITI implementation shows that civil society organisations are leading the fight for transparency in the country. However, when it comes to the EITI, the driver of the process is the government and therefore the core EITI requirements become the maximum threshold and not the minimum as they should be. He argued that to implement the core EITI requirements, there is no need to have a multi-stakeholder group (MSG) in place. All

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that is needed are clearly defined standards and an entity to implement them. The role of civil society organisations should be to analyse the published information. The MSG can only be justified on the grounds that it is working to shape the EITI to the specific challenges of the country and that it is going beyond the minimum requirements. However, there is nothing that gives this responsibility to the MSG and any attempt by civil society organisations to move beyond the core EITI requirements is kept off the agenda with the simple argument that ‘this is not within the EITI’. As a result, in Mozambique andDRC,theEITIisnotdealingwiththemostrelevant issues related to state absorption of the wealth from the extractive sector. In these two countries, the most relevant deviation of funds, which could be used to finance broad-based development strategies, is done before the phase that is monitored by the EITI (contracts and fiscal negotiations and reporting taxable values) and afterwards (allocation of public expenditure and infrastructure

dIscussIon

The discussions following the civil society presentations led participants to reflect on new approaches. In particular, civil society must do more than simply help to publish EITI reports. It must gather information on the actual production figures of the extractive industries, the real revenue generated by the sector and what has happened to this revenue. There was another key point raised – namely the ‘decentralisation of the EITI process’, which for the most part onlyoperatesatanationallevel.Lastly,theparticipants debated the role of civil society leadership and how civil society can help to secure the overall EITI objective – to ensure that the natural resources of a country benefit the population as a whole. To conclude this session, four key points were identified:

•TheEITImustnotbeseenasanendinitself;•TheEITImustberegardedasagovernance

tool, particularly in relation to the overall extractive industry value chain, contract content, determination of the tax system, tax collection and use of financial resources;

•Thereisaneedtoinvolvethegeneralpublicnow that the EITI has shed some light on the extractive industries; and,

•TheEITIshouldbeusedtoencouragepolitical reforms.

There was consensus on the need to find innovative ways to support relevant civil society coalitions in the sub-region in terms of networking, independent mobilisation, capacity building, and sharing experiences and skills around EITI issues in particular and good governance of extractive industries in general. In the same vein, EITI supporting countries and theMulti-DonorTrustFundshouldalsoconsiderdirect funding support to home-grown, cross-border, EITI-promoting civil society coalitions in the sub-region.

SeSSIon four: ThE vIEws of ExTracTIvE companIEs on EITI: KamoTo coppEr company (drc) and mopanE coppEr mInIng (ZambIa)

This session was designed to allow representatives of companies in the region to give their views on the way the EITI operates and to make recommendations about how to increase and improve the participation of companies in the initiative.

SimonTumawaku,PresidentoftheKamotoCopperCompany(KCC),presentedtheviewsof mining companies on the implementation of theEITIintheDRC.TumawakustatedthattheEITI/RDC2007reportlisted20companies,whereas the 2008-2009 report listed 21 mining companies in production, 14 in exploration and 22 mineral buying counters – in addition to six oil companies. He indicated that the EITI provides an opportunity – and indeed an incentive – for companies to pay taxes correctly and to

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contribute more to the nation’s economy. He decried the fact that many people believe that extractive companies take all the profits and do not pay taxes. In his opinion, the companies are transparent and some of them are helping to fund the EITI process.

In conclusion, Tumawaku highlighted the following key issues:

•Thenumberofcompaniesinvolvedintheprocess should be increased;

•Thefactthatcompaniesarefinancingtheprocess demonstrates that they are interested in seeing the process continue and make progress; and,

•AstheEITIprocessmakesprogress,companieswill see their management improve.

Charles Nakasama, Tax Manager for Mopani Copper Mines in Zambia, stressed that the initial responsibility of mining companies is to provide the conciliator with information. This information is given in the form of financial reports, which are duly audited and approved. Mopane has been working with the EITI since the beginning of the process and submits information for conciliation. A high level official of the company participates in the EITI process. However, Mopani is not the only company that is involved. The Chamber of Mines appoints five representatives from its member companies to sit on the council of the multi-stakeholder group.

dIscussIon

The participants discussed several key questions, including the:

•Credibilityoftheinformationprovidedbycompanies;

•Truthfulnessofthefiguresthatcompaniesdeclare;

•Benefitsgainedbythecompanies;and,•Publicationofcompanyorprojectdata.

With regard to the reliability of data, the companies referred to the law that stipulates what must be done – adding that sometimes declarations are made on audited accounts. In relation to the payment of taxes, the companies said that they have to pay far too much, as considerable budgets are also set aside to fund social projects. With regard to declarations, they are either based on the company or on the project. The stakeholders have indicated that when there is a single project, it is confused with the company and it is the latter which makes the declarations. However, when a company has several projects, each project corresponds to one company and declarations are made per company.

According to Mopani, each project has a separate licence and each one has particular conditions pertaining to it. Mopani has two projects – or two mines – in Zambia, which are situated in different parts of the Copperbelt. Cobalt and tin is extracted from the mines but under the same single license. Therefore, production takes place at two different sites but the data is compiled into a single report.

In their replies, the representatives of both companies came back to the question of the publication and transparency of contracts. And they both identified the following challenges:

•Delayinthetransmissionofinformationtotheconciliator; and,

•PoorcommunicationsbetweentheSecretariatand the conciliator, which causes a delay in the process.

The participants also discussed the fact that deviations have been noticed between the companies’ declarations and those of financial bodies. Factors responsible for this discrepancy include:

•Timelapsebetweenreceivingtherequiredinformation and the length of time it takes to compile and publish the report (for example,

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the publication in 2010 of the 2008 report);•Problemsposedbydifferenttypesoftaxes;

and,•Intentionalerrorsonthepartof

government officials.

LessonslearntbyMopaniincludeproducingfinancial reports that cover contract terms and notjusttheproject’soperations.ForKCC,oneof the most positive steps is the fact that mining contractsintheDRChavenowbecomepublicdocuments, which are published on the website of the Ministry of Mines.

SeSSIon fIve: ThE EITI ExpErIEncE In ZImbabwE

The Zimbabwe case study was presented by Thabani mpofu, who revealed that the EITI process started in 2010. following the various crises in the country, which resulted in a drop in agricultural production, it was necessary to start relying on another economic sector – namely, the mining sector. In July 2011, it was announced that the EITI was being implement-ed but it is only in 2015 that the initiative will be effective. Therefore, a Zimbabwean-type EITI and a secretariat (Zog) were created so that some objectives could be achieved before then. In the Zog, there are three stakeholders, including the government (office of the deputy prime minister, minister of mines, reserve bank of Zimbabwe), mining companies (Zmdc, mmcZ and the chambers of mines) and civil society (two civil society organisations and universities). The speaker stated that there were two major challenges to overcome – the mistrust between government and civil society, and the lack of financial resources.

According to Zimbabwean civil society, the Zimbabwe Mining Revenue Transparency (ZMRT) project is civil society’s reaction to the manner in which government manages the revenue from diamonds. The creation of the ZMRT involved:

•Civilsocietyorganisationscarryingoutastudywith the support of SARW on the importance of the EITI in managing resources;

•Acceptanceoftheconceptbyabroadrangeofcivil society organisations; and,

•OppositionfromthegovernmentbasedaroundState sovereignty (although a parliamentary committee is going to be set up to monitor the mining sector).

ZMRT is the confirmation of the willingness of Zimbabwean civil society to promote a culture of transparency and accountability in the min-ing sector. Four years ago, it was not possible to speak about transparency in the extractive industries, but now everyone is talking about it and it is being referred to as a national emer-gency. The delegate to the regional confer-ence added that civil society is busy proposing reforms in order to increase transparency in the country. Along with a new constitution, civil society organisations are considering how to restructure the law governing mining extraction in Zimbabwe, which dates back to the colonial period.

But there are two serious challenges to further progress:

•Acoalitiongovernmentwherethetwopoliticalparties do not have the same vision; and,

•Theon-goingbattlebetweencivilsocietyandparts of government – and no clear idea about how to reach a compromise.

SeSSIon SIx: how To EncouragE addITIonal afrIcan counTrIEs To adhErE To ThE EITI

This session discussed the possibility of other countries, such as south africa and uganda, joining the EITI. by sharing experiences of discussions held with the governments of these countries, the delegates tried to identify what must be done to speed up their acceptance, and implementation, of the EITI.

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With regard to South Africa, several meetings on the EITI have been held with key South African ministries (Planning and Finance) but the perception that the EITI is only intended for corrupt third world countries is preventing South Africa from signing up. The conference delegates agreed that it was important to try and secure South Africa’s participation because there were a lot of complaints about the behaviour of South African mining companies in other Southern AfricanDevelopmentCommunity(SADC)member states.

In South Africa, rigorous regulations are in force. Indeed, another reason why South Africa has not wanted to adhere to the EITI until now is because it feels that it already has the best management systems, audit mechanisms and controls in place. But it is still worth continuing to promote the EITI in South Africa – and the International Secretariat should continue to support these efforts.

SeSSIon Seven: EITI rEforms and fuTurE sTraTEgIc plans

senior representatives from the International secretariat, world bank and the open society foundations (osf) discussed three critical issues:

•Theprocessincountrieswithgovernance problems;

•FuturereformsoftheInternationalSecretariat;and,

•RelationsbetweennationalEITIsecretariatsand the International Secretariat.

EddieRich,EITI’sRegionalDirectorforEasternand Southern Africa and the Middle East, stated that the data from reports from other countries could be used for comparative purposes to give an increasingly clear picture of whether all stakeholders are getting a good deal. He also

raised the question of whether the EITI platform could be used to cover areas beyond revenue transparency, such as license and contract transparency, so stakeholders could not just see what is paid, but work out what ought to bepaid.Lastly,heinvitedtheparticipantstocontribute their views to the reform process through the EITI website.

For Anwar Ravat from the World Bank, the participation of civil society, with all its weaknesses and strengths, must continue to influence the implementation of the EITI in the different countries. He noted that the impact of EITI is currently being driven by civil society in most countries.

AntonyRichter,OSFAssociateDirectorand a member of the EITI Board, mentioned once again the encouraging progress that is taking place in southern and East Africa and the positive manner in which the EITI has been implemented. There have been impacts on both the economy and governance. For example, in Tanzania it has been shown that the EITI has contributed to an increase in State revenues. There are certainly challenges, in particular in Zimbabwe and Madagascar, but these challenges are being dealt with in an innovative manner. He pointed out that there is agreement that communities must participate in the EITI. He also mentioned that there are many African countries in the EITI and they can influence the reform process, adding that there is space for the representation of Africans in the international committee and that the International Secretariat is keen to have representation from all regions.

Inhisconclusion,DrKabembathankedMsShort and her entire team for taking part in the inaugural regional conference on the impact of the EITI on southern and East Africa. Then he thanked all the participants and said that he hoped that this conference would be held every year.

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KEY RECOmmENDaTIONS

•Ensurethattransparencygoesbeyondjustrevenue and includes contract transparency;

•IntensifylobbyingonSouthAfricatoensurethat it implements the EITI;

•EncouragegreaterintegrationbetweenEITIandthe AU Mining Vision;

•Buildthecapacityofcivilsocietyandenhanceits participation in the entire EITI process;

•Enhancethecapacityofcivilsocietytoanalyseaudit reports as there is a general feeling that transparency is growing but that accountability is still lacking – this will require that funding is provided to civil society organisations promoting the EITI;

•SupporttheexpansionoftheEITItoincludemonitoring how governments are spending the revenues raised from the extractive industries;

•ExpandstakeholderparticipationintheEITItoinclude communities;

•Thereisaneedtostrengthencivilsociety’srepresentation on multi-stakeholder groups and participation in the entire process to ensure that credible and critical issues are pushed forward;

•Thereisneedforregularcapacityenhancementfor all key players in the EITI process;

•Effortsmustcontinuetoensurethatmorewestern countries sign up to the EITI; and,

•Effortsmustbemadetopromotethedomestication of the EITI.

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name country organISatIonClare Short UK EITIEddie Rich UK EITI

Anvar Ravat Zambia World Bank

Anthony Richer New York OSF

OladayoOLAIDE Senegal OSIWA

KarinLissakers New York RWI

EmmanuelKuyole New York RWI

DrSiphoMoyo Johannesburg ONE

JeremyMackDumba DRC EITIDRC

MrsMarylouDjuma DRC EITIDRC

MrsLeonieKiangu DRC EITIDRC

Tahiny Tsarabory Judicael Madagascar EITI Madagascar

Hélder dos Santos Sindique Mozambique EITI Mozambique

Thabani Mpofu Zimbabwe Zimbabwe Government

Florent Michel Okoko Republic of Congo EITI Congo Brazzaville

InnocentLughaBash Tanzania EITI Tanzania

Jean Pierre Muteba DRC(Lubumbashi)

Jacques Bakulu DRC(Boma)

Ernest Joseph Gilbert Madagascar KMF/CNOE

Rogerio Ossemane Mozambique IESE

Herculano Vilanculo Mozambique KUWUKA

Camilo Nhancale Mozambique KUWUKA

BubelwaKaiza Tanzania Fordia

LucyMunthali Zambia Caritas Zambia

Mwiya Mwandawande Zambia Positive

MutusoDhliwayo Zimbabwe ZELA

Merjury Mhlanga Zimbabwe SAPST

Simon Tumawaku DRC KatangaMining

Euphrasie Amina DRC OSISA

Georges Bokondu DRC SARW

Patricia Ngoy Mango DRC SARW

ClaudeKabemba JHB SARWMoratuoa Thoke JHB SARW

EdwardLange Zambia SARWAliceKanengoni JHB OSISAMasego Madzwamuse JHB OSISA

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aBBREVIaTIONS

cepeco: Centre pour la Promotion et l’Education des Communautés de basedrc: DemocraticRepublicofCongoeItI: Extractive Industries Transparency Initiative fordIa ConcernforDevelopmentInitiativesinAfricaKcc: KamotoCopperCompanymdtf: Multi-DonorTrustFundmmcZ: Minerals Marketing Corporation of ZimbabwemonuSco: United Nations Organization Stabilization Mission intheDemocraticmSg: Multi-Stakeholder GroupndS: NouvelleDynamiqueSyndicaleoSf: Open Society Foundations, oSISa: Open Society Initiative for Southern Africa oSIWa: Open Society Initiative for West AfricarWI: Revenue Watch Institute, Sadc: SouthernAfricanDevelopmentCommunitySapSt: Southern African Parliamentary Support TrustSarW: Southern Africa Resource Watch Wb: World BankZeLa: ZimbabweEnvironmentalLawAssociationZmdc: ZimbabweMiningDevelopmentCorporation Zmrt: Zimbabwe Mining Revenue TransparencyZog: Zimbabwe Mining Revenue Transparency Initiative Oversight Group

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The mission of the Southern Africa Resource Watch (SARW) is to ensure that extraction of natural resources in southern Africa contributes to sustainable development, which meets the needs of the present without compromising the ability of future generations to meet their needs. SARW aims to monitor corporate and state conduct in the extraction and beneficiation of natural resources in the region; consolidate research and advocacy on natural resources extraction issues; shine a spotlight on the specific dynamics of natural resources in the region and building a distinctive understanding of the regional geo-political dynamics of resource economics; provide a platform of action, coordination and organization for researchers, policy makers

www.sarwatch.org

www.eiti.org

and social justice activists to help oversee and strengthen corporate and state accountability in natural resources extraction; and, highlight the relationship between resource extraction activities and human rights and advocate for improved environmental and social responsibility practices. SARW focuses on 10 southern Africa countries but is also working to build a strong research and advocacy network with research institutions, think tanks, universities, civil society organizations, lawyers and communities in southern Africa, the African continent and beyond that are interested in the extractive industries as it relates to revenue transparency, corporate social responsibility, human rights and poverty eradication.

The EITI International Secretariat is based in Oslo. Officially opened in September 2007 and hosted by the Government of Norway, the Secretariat is an independent body solely accountable to the EITI Board. The Secretariat is responsible for turning policy decisions of the EITI Board into action, and for coordinating worldwide efforts in implementing the EITI. Its role specifically includes: outreach and advocacy, communicating and sharing lessons learned with stakeholders, managing a resource centre on revenue management and transparency, and oversight of the Validation process. It organises, jointly with supporting and implementing countries,

the biennial EITI Conference. An important role of the Secretariat is to support implementation. Although implementation is the responsibility of local EITI stakeholders, the Secretariat aims at ensuring coordination between supporting countries and assistance providers such as the WorldBank,theAfricanDevelopmentBank,andbilateral donors. The Secretariat closely follows in-country implementation and findings of Validation processes to guide and inform the national EITI processes. Finally, as a platform for exchange of experience and information, the Secretariat welcomes a constant dialogue and collaboration with all partners.