Mario Ramirez, MASc Mining Engineering // March 21, 2015
Today, I came across some interesting information that answered some of the questions and concerns I had from the beginning of this project. I was, somehow, skeptical about EITI sub-national reporting, and wondered if these reports could really be of any use to communities where extracting projects are in operations. However, it was after reading the report“Implementing EITI at the Subnational Level[1]”, sponsored by the World Bank, and conducted by Mr. Javier Aguilar, that I began to see the light at the end of the tunnel.
The report is broken down in three main topics; being the first one, “the understanding of Subnational governments”, then it goes into “emerging experiences from EITI implementation countries”, which is my favorite, and ends with “the subnational dimension of EITI: an operational framework”. The report uses the example of 6 countries which have implemented subnational reporting, and presents the case study of each country, describing each one’s distinctiveness but at the same time comparing its similarities.
In a note sent by the World Bank to the EITI in 2012[2], the World Bank mentions how sub-national EITI reconciliation can be identified from existing reporting practices, this note contains information extracted from the previous 2011 report presented by Aguilar:
Four different forms of possible sub-national EITI reconciliation can be identified from existing reporting practices:
1. The reconciliation process focused on direct EI revenues collected by the sub-national governments and compared them to companies’ payments (revenue collection, i.e. Mongolia).
2. The effort focused on revenue transfers from the central to the sub-national governments and compared them to the sub-national governments’ receipts (revenue distribution cash flow, i.e. Peru).
3. The process focused on revenue transfers from the central to the sub-national governments and compared them to the rules that should be applied (revenue distribution process, i. e. Ghana).
4. In addition to these subnational EITI reconciliation processes, some governments have decided to unilaterally disclose subnational governments’ expenditures. (Aguilar, 2011)
Out of the four, the last practice called my attention significantly. In the report, Aguilar gives the example of two countries that have not only implemented sub-national reporting but went beyond EITI call for it. They have segregated subnational government accounts to separate the money coming from extractive industries, by so doing, they can have better control of the money and the expenditure of it. This initiative allows subnational governments explain, how and where the money from extractive industries is invested. Let us read the abstract from the World Bank report:
3.4.4 Going Beyond Disclosure of Access to Revenues: Disclosing Expenditures Both Ghana and the Cajamarca region in Peru also decided to disclose expenditures of the respective subnational governments. In Ghana, two of the three regions had a separate budget account allowing for disclosure of expenditures of mineral royalty transfers. In the Cajamarca region, selected municipalities reported on their expenditures, and the disbursement rate of the revenues for projects was taken as measure for efficiency (Aguilar, 2011, p. 42)
These types of initiatives by Subnational Governments are the ones that make a difference. At the end of the day, this information is what a common citizen values the most. Long reports with many numbers and graphs are indeed important for those who understand them. However, for the majority of us, regular citizens. It is by tangible actions that TRUST can be regained and transparency can be measured.
References
Aguilar, J. (2011, October). World Bank. Retrieved from World Bank Website: http://www-wds.worldbank.org/ external/default/ WDSContentServer/WDSP/IB/2011/ 11/04/000386194_ 20111104022536/Rendered/PDF/ 653730NWP0P1250he0Subnational0 Level.pdf
Bank, W. (2012, April). Retrieved from EITI, Extractive Industries Transparency Iniciative: https://eiti.org/files/SWG/ World_Bank_SWG_Paper_Note_on_ EITI_reporting_by_subnational_ governments_April_2012.pdf