Almost three years ago, the Open Government Partnership (OGP) was launched to provide an international platform for domestic reformers committed to making their governments more open, accountable and responsive to citizens. Since then, OGP has grown from eight participating countries to 64, some of which are currently developing new action plans. In that context, the Revenue Watch Institute – Natural Resource Charter (RWI-NRC) has identified specific commitments that governments should make to promote transparency and accountability in their extractive sectors. These recommendations were based on the 2013 Resource Governance Index (RGI), which measures the level of governance in the oil, gas and mining sectors of 58 countries.
Countries including Azerbaijan, Colombia, Mongolia, Sierra Leone, Tanzania and Trinidad and Tobago should disclose all contracts signed with extractive companies in an accessible repository. Publishing contracts helps citizens evaluate which benefits and protections their country receives in exchange for access to publicly owned natural resources, and lets them monitor whether companies and governments live up to their obligations. Governments also benefit, as contract transparency can boost investor confidence, help reduce conflict between stakeholders over the terms of production, and eliminate opportunities for any single official or agency to negotiate deals in the shadows.
In addition to disclosing contracts, all OGP extractive countries must adopt and enforce the project-by-project disclosure standards of the U.S. Dodd-Frank Act (section 1504) and the European Union (EU) Accounting and Transparency directives. Reporting payments by revenue stream and by project helps to prevent oil, gas or mining revenues from being mismanaged or lost to corruption. Project-level disclosure also provides communities that live near extraction sites with details of the financial contributions that companies make and enables civil society to hold governments accountable for the way they spend revenues.
In line with U.S. and EU legislation, the Extractive Industries Transparency Initiative (EITI) now requires companies to report payments on a project-by-project basis. It also encourages countries to disclose the identity of the real owners—“beneficial owners” – of the companies that have acquired rights to extract oil, gas and minerals. Countries that are already EITI compliant, such as Azerbaijan, Mongolia and Tanzania, should follow all recommendations of the EITI standard. Countries that are not implementing EITI yet, such as Canada and Colombia, should become candidate countries as soon as possible.
Finally, governments should adopt a Freedom of Information act (FOIA) that requires comprehensive disclosure from all public companies, including state-owned companies involved in the extractive sector. Governments that lack an FOIA, such as Sierra Leone, Tanzania and Trinidad and Tobago in particular, should consider adopting such a law. Those that have one, such as Canada and Colombia, should consider updating their FOIA to ensure that they are effective.
For OGP governments, implementing these recommendations will require effort, but showing commitment is a first step.
Marie Lintzer is RWI-NRC’s governance policy analyst.
For more recommendations by country, please visit the RGI country profiles, available here.