The International Monetary Fund (IMF) is in the process of issuing a new Fiscal Transparency Code (FTC) to replace its Code of Good Practices on Fiscal Transparency. The existing code forms part of the IMF’s guidance on fiscal transparency to its member countries. It is used to prepare voluntary country reports, which guide IMF policy discussions with national authorities and provide valuable information on countries’ adherence to internationally recognized standards.

The existing code already contains some elements relevant to natural resource transparency, and the IMF’s separate Guide on Resource Revenue Transparency applies the principles of the existing code to the natural resources sector. The guide was a pioneering document that pushed the boundaries of transparency in the management of oil, gas and mining, and inspired efforts to increase transparency in resource-rich countries by a wide range of actors, including the Natural Resource Governance Institute (NRGI).

Building on the ground cleared by the guide, the new FTC will feature a pillar devoted entirely to resource revenue transparency—this is a welcome and important improvement. The first three pillars have been finalized and the IMF is now soliciting comments on the fourth pillar dedicated to resource revenue management. This past week we at NRGI provided recommendations for the finalization of Pillar IV.

As drafted, Pillar IV continues to advance the cause of transparency, incorporating some of the latest developments in the field. It reflects the increasingly recognized importance of mandatory payment disclosure—particularly disclosure at a project-by-project level. Similarly, Pillar IV captures advances in contract transparency and disclosure of beneficial ownership. The IMF has also taken steps to address environmental and social impacts and covers competitive bidding in Pillar IV, and has explicitly included commodity trading in resource revenue reporting. In another positive step, the IMF has sought to recognize differing levels of country capacity and has therefore differentiated between basic, good and advanced practice, providing a roadmap for improvements as country capacity develops.

While the draft language represents significant progress, we do think it can be further enhanced. Our key recommendations are:

1. Pillar IV should reflect recent developments emphasizing public accessibility of data in machine-readable, open format (i.e., “open data”).

2. Pillar IV should reflect the current state of project-level disclosure by designating it as an essential component of “basic” or “good” practice, not just “advanced.”

3. Pillar IV should include a separate section for national resource companies.

Overall, the IMF will need to take care going forward to ensure that as transparency standards rapidly evolve Pillar IV doesn’t fall behind the curve in its designation of levels of practice.

It is also important to highlight that transparency is essential but, by itself, not enough to improve governance of natural resources and ensure that the potentially vast revenues that result are translated into better standards of living for citizens of resource-rich countries. Accountability and good public financial management are critical factors as well. We at NRGI look forward to working with the IMF and other stakeholders to further improve transparency but also advance the discourse on accountability.

Nicola Woodroffe is a legal analyst at the Natural Resource Governance Institute (NRGI).