Category Archives: EITI Mongolia

Yemeni EITI Meta-data

Bérangère Maïa N. Parizeau, MAAPPS // Feb 17, 2015

To reflect on the potential sub-national reporting frameworks that could be recommended for EITI standards in Mongolia, my cohort and I began our work by researching EITI member countries and their sub-national reporting strategies. We looked at the socio-political context and the processes involved in the implementation of EITI standards in some of the current member countries. Each graduate student individually studied one EITI member country. I decided to look at Yemen, which has a special status as the first Middle Eastern country to become an EITI member. Yemen is a country rich in minerals, gas, and oil. Oil is predicted to be exhausted in 10 to 12 years. It is important for Yemeni’s positive economic development that oil be manage intelligently.

I found fascinating to learn that until the 1990s, the north of Yemen was not structured around governmental institutions. Rather, the numerous Yemeni tribes traded with each other. The network of tribes was interconnected thru countless friendships, and facilitated by the honouring of those friendships. This is called tribal law. The political structure was based on the network of tribal alliances with minimal use of violence. The unique tribal societal politico-economic structure is a good reminder that there are limitless ways in which society can choose to structure itself. Keeping this in mind, I want to underline the importance of creative problem solving when addressing major challenges, and fostering decision-making processes outside expected norms to find intelligent solutions.

Yemen is currently undergoing a security crisis, crippling violence, and the possibility of political collapse. The parliament was recently dismantled by the Houthis rebels. The UN Security Council is demanding Houthis rebels to cease their threats, and called for the reassignment of President Abdu Rabbu Mansour Hadi to his post. Instability in Yemen has caused the country to be suspended from EITI several times between 2011 and 2014 because of Yemen’s lack of timeliness in reporting. Corruption has reach critical levels in Yemen. In fact it is one of Yemen’s core challenges.

It has been eye opening to research the current state of extractive industry transparency and EITI initiatives in Yemen. Yemen is the poorest country in the Middle East. More than 40 percent of the population is food insecure living on less than $2 a day. Yemen is currently experiencing a water crisis. Yemen is the country with the most arable land in the arab world. In December 2011, Tawakkul Karman, a Yemeni politician, and senior member of the Al-Islah political party, mother of three, became the youngest-ever Nobel Peace Laureate for her work as a peace builder activist in Yemen. The country’s civil society is very active, as is exemplified by peace activist and Nobel Peace prize recipient Tawakkul Karman. The multi-stakeholder group overviewing the standardization reporting processes in Yemen is composed of parliamentary members. Yemen is one of the few countries which had parliamentarians involved in revenue reporting and EITI standards implementation processes.

The World Bank has facilitated a knowledge exchange program between Yemen and Kazakhstan. This is a fabulous way to build Yemen’s transparency and accountability capacity in the extractive sectors. The pairing of two countries to build knowledge can be a great tool for knowledge transfer if it is exercised properly. In my opinion, this kind of knowledge transfer could be used more. It is a great way to develop ties and friendships between countries as well. In Yemen, the emerging role of civil society, and Civil Society Organizations (CSOs), are becoming more and more engaged with the various stakeholders and working towards building consensus. Although, too much of a narrow focus on consensus can detract from creative problem solving ideas.

Lessons Learned in Peru

Stephanie Zimmerling, MASc Mining Engineering // Feb 16, 2015

I have spent the past few weeks understanding and reporting on EITI in Peru. While familiar with the country’s dominance in the extractive industry, primarily in copper and gold, I was not familiarly with the decentralized nature of revenue distribution. Peru’s extractive industry revenue framework is built around the ‘canon minero’ and the distribution of mining royalties. These systems emphasize the decentralization in Peru and has put an increasing demand on regional governments. Since joining the EITI in 2004, civil society has criticized the reporting procedure for being irrelevant as it did not discuss wealth distribution at a regional level. Peru has already engaged in multiple sub-national reporting pilot projects.

Prior to the involvement of EITI, the International Finance Corporation (IFC) and the Canadian International Development Agency (CIDA) launched the MIM Peru Project (Improving Municipal Invest). The aim of the project is to address some of the issues present at a local level with regards to the canon fund allocation and to promote greater social accountability. The projects focuses on raising awareness about the importance of investments made with the canon funds and to encourage the expression of public opinion. Each of the projects work in collaboration with civil society organizations. The MIM project provided the information required by the organizations to enable the undertaking of a systematic monitoring of royalty transfers and municipal investment. The involvement of civil society organizations also allowed for more effective dissemination of information to citizens with the intent of promoting open dialogue between government authorities and the public concerning royalty investment. The projects have been successful and behavioural changes are present among communities.

Peru has also been at the forefront of EITI sub-national reporting. The Cajamarca region of Peru has been participating in a sub-national pilot project. The EITI has reflected upon the successes and struggles on these pilot projects as a means of informing the transition to sub-national reporting. Although subnational reporting makes sense in a decentralized nation like Peru, the ease of implementation may be significantly more difficult in centralized countries. The EITI has acknowledged that there are several constraints to overcome to implement subnational EITI successfully. Challenges include constraints of local capacity, legal uncertainty, access to funding, logistics and lack of infrastructure, political issues such as lack of political support, and a lack of engagement with local and civil society organizations. The approaches used by countries will vary in nature and need to be flexible and adaptive.

Subnational Reporting – Lessons from the Philippines

Christina Toepell, MAAPPS // Feb 11, 2015

When thinking of glorious mining countries in the world, the Philippines is most likely not amongst the first countries that come to mind. The archipelago, located in the Western Pacific and consisting of more than 7,000 small islands, is more known for its political instability in the 20^th century, the comparatively good education system and the large Philippine diaspora living around the globe. Our perceptions on mining are not wrong – to date, only 1.28% of the country’s GDP is generated from the extractive sector, and only 0.58% comes from metallic mining.

Why are we even observing this country and its mining activities? According to numbers from the Mines and Geosciences Bureau of the Philippines (MGB), about 30% of its land is geologically promising, with the total estimated value of the country’s mineral reserves adding up to USD 1,387.1 billion. Thus, the work of EITI will become increasingly important in the future.

First engaging with the country in 2013, EITI is still in the initial stage, engaging with mining on a national sector. With its maiden report published in December 2014, it is expecting to gain full EITI membership in the upcoming years. Not surprisingly when looking at the strong level of civil society organizations, it has been warmly welcomed to the country and has been cooperating with national organizations such as Bantay Kita from the beginning.

Bantay Kita, which can be translated to English as “We Guard”, is a national NGO working on increasing transparency and accountability in the extractive industries. Established in 2009, it has had sufficient time to build a strong network across the country and start two subnational activities in the Southern island of Mindanao, the least developed of the three big islands. While the initiative in T’Boli, South Cotabato mainly focuses on empowerment of civil society and artisanal mining, the Compostela Valley transparency initiative was the first subnational organization in the country.

With most of the mineral land falling under special protection due to its Ancestral Domain status, Compostela Valley is one of the regions were subnational reporting is most urgently needed. Bantay Kita’s subnational multi-stakeholder group gained full legitimacy in 2012 and has been working on issuing a subnational report on mining activities ever since. In 2013, it issued a 72-pages handbook with background on the area and the initiative. The main part contains detailed reporting templates for all relevant entities, assisting these institutions in disclosing their revenues, payments and contracts according to the initiative’s standards. While still waiting for the final disclosures of some entities, the Compostela Valley transparency initiative expects to be able to publish the first subnational report in the Philippines later this year.

Starting to focus on our mandate for Mongolia, I am wondering how we could translate the excellent initiative in Compostela Valley to our work in Northern Mongolia. How can we adequately adapt a Philippine project that has put more than 3 years of effort into their subnational report? How can it fit the context of a small UBC graduate student project focusing on the Mongolian mountains with less than 3 months to go? I am more than excited to finally start with our work in Mandal Soum, but simultaneously understand that my expectations will probably need to bow to smaller projects with more realistic outcomes and higher feasibility.

Civil Society Living in Fear? Well, Good Luck with Local Reporting….

Debbie Prasad, MAAPPSS // Jan 26, 2015

On my last blog post I discussed Myanmar’s candidacy in the EITI and how their participation in the organization was contrary to the argument that they joined the EITI as a means to attract foreign aid and a better world reputation through increased transparency. It’s been just a day since that post and I’m not so sure I can stand by what I said earlier…..

As I’ve been studying the extractive industry in Myanmar, I am seeing a hot mess. On the one hand, the government is passing new mining legislation and anti corruption laws, but on the other hand, they have passed the 2014 Electronic Transfers Law, which in essence limits public access to information. A key component of becoming an EITI member is transparency- as listed in the name! If there are laws which limit public access to information, coupled with only the Central Bank having the jurisdiction to publish annual fiscal reports, (which are not readily available, and unavailable online) how will Myanmar meet transparency goals?

In addition to all this, according to article 1.3 of the EITI Standard, Myanmar has pledged to refrain from obstructing freedom of expression in relation to the extraction of natural resources. This is not so much the case in Myanmar. The recent conflict in Letpadaungtaung has lacked government action on police and military brutality towards civil society in areas that are closely located to mining operations. To take this a step further, Myanmar military-owned companies and holding groups such as UMEHL (Union of Myanmar Economic Holdings Limited) and MEC (Myanmar Economic Corporation) are heavily invested in the extractive sector. The recently established EITI goals of encouraging local reporting makes civil society an integral part of the picture, but in the case of Myanmar, this will prove difficult, when civil society is not given freedom to protest and express their concerns about extractive industries in the region. If the military is heavily invested in industry, how will civil society be able to express concerns without the fear of military coercion and violence? How will living in fear from the military allow civil society to work with other stakeholders to achieve goals to become an official EITI member? It’s high time for the government to mean what they say, and to take responsibility for allowing civil society to express their concerns freely.

Sources:

Thet Aung Lynn and Mari Oye “Natural Resources and Subnational Governments in Myanmar: Key Considerations For Wealth Sharing. June, 2014”

“Whistle Blowers Report Myanmar to Global Mining Body” http://www.elevenmyanmar.com/index.php?option=com_content&view=article&id=8650:csos-report-govt-s-breach-of-intl-eiti-standard&catid=33&Itemid=356

Myanmar to Follow the Mongolian Path?

Debbie Prasad, MAAPPS // Jan 25, 2015

According to a study conducted European Research Centre for Anti-Corruption and State-Building, some reasons why corrupt countries join the EITI are “because they are concerned about international donors and expect to be rewarded by increase aid”

A country comparison between Mongolia and Myanmar using Transparency international shows that Mongolia holds a rating of 39/100 while Myanmar stands at 21/100. The ratings uses a scorning guide of 0-100 in which 0 is the most corrupt and 100 is corruption free; both countries appear to be quite high on the corruption scale

There is arguably a link between corruption and its negative impact on economic growth. The more corrupt a country is, the less benefits their economy will reap. Since the Mongolia’s initial entry into the EITI in 2006, their GDP has shown steady growth. In 2006, their GDP was 3.4 billion USD and in 2014, their GDP was 11.7 USD. Perhaps, it can be said that the implementation of the EITI has been a positive factor in increasing transparency in resource extraction, and concurrently reducing corruption, attributing to economic growth.

In the case of Myanmar, which has recently sought entry into the EITI, it remains to be seen if the EITI will have a positive impact on reducing corruption and resultantly improving their GDP. Recently, Myanmar has been taking major steps to improve their economy through a new anti-corruption law, and also by requesting a World Bank Public Expenditure and Financial Accountability Assessment in 2013. The report recommended, among various other remedies, a need for more transparency and organized form of reporting in order to eliminate budgetary discrepancies.

According to the EITI, Mongolia, since it’s membership. has had a high level of transparency with their reporting. Company payments seem to equally match government revenues. Mongolia’s implementation of the EITI supports the idea that they have joined the EITI with the intention of improving their economy through sound implementation of transparency, rather than merely paying lip service to the EITI and using membership as a means to get foreign aid.

Currently, it appears that Myanmar may follow the Mongolian path in their entry into the EITI. Their changes in legislation in terms of new mining and anti corruption laws, and also requests of assessment from the World Bank give evidence of their willingness to join the EITI not just to receive foreign aid, and better their reputation in the international community, but rather, to follow the prescribed methods of transparency in order to improve their resource economy. Contrary to the study conducted by the European Research Centre for Anti-Corruption, it can be argued that both Mongolia and Myanmar, (who are seen to have corruption problems) are on their way to economic growth through self sufficiency from their resource extraction industry, rather than joining the EITI merely for foreign aid.

Sources:

www.EITI.org/Mongolia/reports

http://www.worldbank.org/en/country/myanmar/publication/myanmar-economic-monitor-october-2013

Liz David-Barrett and Ken Okamura ”The Transparency Paradox:

Why do Corrupt Countries Join EITI? Working Paper No.38.

European Research Centre for Anti-Corruption and State-Building. November 2013.