Category Archives: Trade Course Material

The EITI Process in Plain English in the Context of Ghana – Part 2

Carlos da Costa, PhD Mining Engineering // Feb 15, 2015

The second goal should be to help representatives of civil society organizations understand thoroughly and comprehensively, the nature, structure and dynamics of the extractive industries sectors, from both a global and a Ghanaian-national perspective. It is trite knowledge that the extractive sectors (minerals and energy) are intrinsically opaque.

Its governance is encased in principles of confidentiality; the language of its laws, regulations and memoranda of understanding (MOU) are couched in complex technical language, often defying the achievement of consensus in interpretation based on the ordinary meanings of the words. Its operations are often carried out in remote subnational areas, sometimes inaccessible to even those charged with the responsibility for regulating these sectors.

This opacity aids the maximization of profit and rent seeking; but it undermines the promotion of citizens’ welfare and the protection of national interest, through an accurate knowledge of what is produced and monetized, and a judicious and just allocation and utilization of the proceeds from the nation’s natural resources. Shining light on the dark recesses of the extractive sectors and demystifying its complex laws and technical processes is an important purpose of this training. If and when civil society fully understands these sectors, then it can help to explain it to the people. It is then and only then will the problem of misperception of the extractive industries companies by the citizens be reduced. It is then and only then will peace and harmony reign in mineral and oil producing communities in Ghana.

Such training is also meant to enhance the capacity of civil society organizations to engage extractive industries companies directly in a manner that is harmonious and friendly, instead of mutual suspicion and bitterness. The leadership role that civil society organizations are expected to play in mobilizing citizens to ask for their rights, extends also to the relationship between companies and the citizens at the community level where the company / citizen interaction is direct, intimate and unavoidable. Where formal structures of organized citizens, led by responsible and accountable leaders of civic organizations, exist, the company-community inter- face is likely to be harmonious and mutually beneficial.

Conflicts arise and intensify where those who claim to project community interests are individuals or agents of private citizens with no clear or indisputable mandate from any group or any one. Such individuals often front for non-existent groups and organizations, and claim the material fruits of corporate social responsibility, which they appropriate for themselves. How civil society organizations can fill this gap in the structure of the relationship between companies and communities, and even between governments at local levels and the citizens at that level, requires special knowledge and skill. GHEITI (Ghana Extractive Industries Transparency Initiative) is keenly aware of this need.

A key principle in the implementation of EITI at the national level is ownership. Ownership of the process of data gathering, the instrument of data gathering, and the planning and implementation of communication strategies is central to the success of EITI implementation. Initially, international consultants may be needed and used for any of these processes which form part of the mechanism of EITI reporting. As time goes on, however, members of the MSG, including civil society representatives, should be in a position to take on these responsibilities; generate data gathering templates, help to supervise their population by companies and regulatory agencies, help to analyze the data collected, help to produce the reports and participate in getting them published. It is then and only then that “publish what you pay” and “publish what you earn” can become an ongoing daily and monthly routine. As long as the process is dominated by consultants, and so long as the cost of producing the reports remains exceedingly high, it will be difficult for EITI reporting to be regular, frequent and timely. More importantly, it will be difficult to sustain the EITI disclosure and reporting process for a long time in some EITI member countries.

For soon, governments will tire of it, or regard it as a nuisance, and kill it through under funding. Furthermore, when the technical process becomes well known among civil society leaders and members, it will be easier for them to make meaning out of the figures in the EITI reports, understand the story behind those figures, and be in a position to explain them to all. A nation’s people will then be better empowered to hold government to account. And the EITI will have a better chance of surviving possible successive regimes in their country. Laws and establishment of EITI secretariats at the national level, in them cannot ensure the sustainability of EITI.

Oil price drop, the potential impact on Republic of Congo and implications for Mongolia

Harry Li, MAAPPS // Feb 8, 2015

In 2014, Republic of Congo received $10.7 billion revenue from petroleum alone, equivalent to 74% of its total GDP. Petroleum export is the biggest resource export of the country, accounting for over 90% of all exports. With such heavy reliance on petro, the global oil price drop recently would potentially play a destructive force toward the national development of ROC.

Currently, ROC has $4.225 billion of growth external debt. Amadou Sy, the director of Africa Growth Initiative, argues that it will be more difficult to service debt as their oil revenues fall and the depreciation of their currencies makes U.S. dollar denominated debt more expensive.

According to the Financial Times, South Sudan is receiving the lowest oil price in the world at $20-$25 a barrel because of the combination of falling prices and unfavorable pipeline contracts. ROC’s government could face similar unpopularity. ROC’s government is currently running as an authoritarian regime controlling nation’s resources, suppressing the activeness of civil societies, such as Observatoire congolais des droits de l’Homme(OCDH). OCDH is the biggest Human Rights group in ROC and it constantly criticizes the government. However, ROC’s decreasing ranking in the Democracy Index, Human Development Index, Corruption Percentage Index and Economic Freedom Index would make its petroleum market less attractive for international investors, since more options are available. All of the impact above would result in national-budget cutting, thus negatively impacting the domestic economy.

In the aspect of export resources, Mongolia is similar to ROC. Although Mongolia is not oil major exporter, but mining export accounts for a large percentage of national’s GDP. Thus the price-drop scenario would apply if prices of coal, copper and gold (Mongolia’s top 3 major resource exports) drop significantly. Resource-export oriented countries like Mongolia is fragile to the fluctuation of global prices. That is why it is very important to find effective ways for sub-national reporting and engage civil society in the policy-making on the mining industries in Mongolia. If appropriate policies on mining are implemented, not only will Mongolia be better protected when the prices of coal, copper and gold suddenly decreases but also increase popularity among global investors.

Reference

Sy,Amadou. “Falling oil prices and the consequences for sub-haharan Africa.” The Brooking Institute, Dec.23, 2014.http://www.brookings.edu/blogs/africa-in-focus/posts/2014/12/23-oil-prices-exports-africa-sy

 

Youth and the Future of Sustainable Mining in Mongolia

Garth Thomson // July 30 ,2014

As a country with a plethora of natural resources and a relatively small population to support with this endowment, Mongolia is in a unique position as it looks to the future. If the development of these resources is managed effectively, there is the potential to for them to lift the country into an era of prosperity, realizing transformative development potential rarely seen in a post-soviet state.

 

Photo: Christopher J. Carter

But how will these resources be managed effectively? How can Mongolia ensure that the benefits from future mining projects reach all Mongolians; moving the country forward without leaving anyone behind? One needs only a brief glance around the world to see nations with enough natural resources to provide a good life to all, but routinely squander them through mismanagement and corruption. Clearly, Mongolia is need of expertise to ensure the mistakes of other nations are not repeated. But where will the expertise to exploit the nation’s competitive advantage come from in a developing country only 20 years removed from socialism?

 

Photo: Christopher J. Carter

Photo: Christopher J. Carter

 

During our visit, I found a striking characteristic of the Mongolian people to be their unwavering independence. The nation has a long and proud history, and I found this pride reflected both in the attitude of everyday people I encountered, and the government’s stance on resource policy. The Mongolian government knows it needs foreign investment to develop its resources. Yet, they seem intent on setting their own course on mining policy, ignoring the exaltations of observers. Chinggis would be proud.

This independent streak threatens potential investment in Mongolia, prompting observers to characterize the action as biting the hand that feeds. In addition to scaring off foreign companies, the lack of reform can be also seen to reinforce old ways of doing business. This sentiment was reflected in conversations with expat mining professionals in country. Soviet leftovers like corruption and cronyism did not appear to be as rare as we had hoped, and color the mining industry in a negative light for Mongolians in a time of growing inequality.

 

Photo: Christopher J. Carter

Photo: Christopher J. Carter

 

So can Mongolia move forward into a modern mining powerhouse? If it can, it will happen internally, through its youth. Mongolia’s population is overwhelmingly young and increasingly urban. This key demographic appears to be increasingly influenced not by old friend Russia, or old enemy China, but by other industrialized countries – some with rich mining histories of their own. Several times I met young Mongolians, well educated, articulate in multiple languages, and enthusiastic about being part of Mongolia’s transformation. Many of these young people had been educated or worked throughout the developed world, and have returned home armed with skills vital to driving economic development. In addition to providing technical skills and expertise, this generation can also bring home new attitudes to old problems like governance, corruption, and wealth distribution. If these attitudes take root, they can be a transformative part of the nation’s future.

Trip Roundup and Final Materials

 

2014 Asia Pacific Policy Project Owrking Team with the Ambassador of Canada to Mongolia Photo: Christopher J. Carter

The 2014 Asia Pacific Policy Project Working Team with the Ambassador of Canada to Mongolia                                       Photo: Christopher J. Carter

Alexandre Bastien // June 17 ,2014

The experience of going to Mongolia was a wonderful opportunity to understand better this complex reality. Our group has been working for months on the way to improve transparency. However, seeing Ulaan Baator with all its contrast underline the importance to promote transparency.

The city is indeed booming. The Blue Sky tower in front of the central square demonstrates this will to make the capital as modern as possible. Nevertheless, walking in the outskirt of the city illustrates the benefits’ limits of the mining exploitation. Mongolia is a huge country with a small population. Thus, we all wish that it will follow Norway’s path and be able to raise the living condition of its whole population.
The Boroo gold Mine in 150km north of the nations capital was one of the first major international  and today is active participant in EITI reporting.  Photo: Christopher J. Carter

The Boroo gold Mine in 150km north of the nations capital was one of the first major international and today is active participant in EITI reporting.
Photo: Christopher J. Carter

Mongolia is a complex country with different reality but still with attaching people. Its mining resource could be an important tool to turn this nation into one of the richest in Asia. However, the path to success is not clear and Mongolia will have to find it own recipe for success.

 

Mongolia EITI Infographic

 

Completed Materials as PDF Files

Presentation Slides (Mongolian Version)

Pamphlet (Mongolian Version)

Japan-Canada

Countries at a Glance

Regional information

Invest Canada-Japan

Opening a business

Japanese Market Opportunities (DFAIT Trade Comissioner Service)