Transcript Document

EURASIA REGIONAL TRAINING HUB
EITI Advanced Course
KHAZAR UNIVERSITY ▫REVENUE WATCH INSTITUTE
15-17 June 2012, Baku
xoş gəlmisiniz! ▪ Welcome!▫
ласкаво просимо▪გამარჯობა ▫
Добро пожаловать ▪ Тавтай
морилогтун ▫ Қош келдіңіз
▪ Саламатсызбы ▫ Калима ‫خوش‬
‫▪آمدید‬
Introductions:
name, organization and…
What is something
nice about your
country that most
people do not know ?
What is something
about the extractive
sector that most
people in your country
do not know?
Training Overview
DAY 1
Value
Chain
Theory
Report
of
Quality
Change
DAY 2
Country Report
Presenta
Analysis
tions
DAY 3
Innov
ations
Action
Planning
Exams/
Evaluati
ons
EXTRACTIVE SECTOR VALUE CHAIN
EITI as a “stepping stone”
to other reforms
EITI a Step Toward
Sustainable Development
Ensuring
revenue
transparency
EITI in the value chain
Deciding to extract
Getting a
good deal
Ensuring
revenue
transparency
Managing
Volatile
resources
Investing in
sustainable
developme
nt
Step I:
Theory of Change and
The Problem Tree
The Metaphor of a Tree
Problems
Hint: be specific!
Causes
(ref.
value
chain)
Roots
( hard to see causes)
NOT ‘Lack of Transparency‘
TRY ‘State owned oil Co. does not publish a
budget or sales figures’
NOT ‘Lack of Accountability’
TRY ‘ Parliament does not have the tools and
knowledge to understand payments from the
extractive sector and hold ministries
accountable’
Step 1: Start with 3
problems with the
extractive sector in
your country
Step 2: Identify the
underlying causes
based on the value
chain – where do
decisions go wrong?
Hint: Choose problems that are specifically
related to the extractive sector.
Question: what is special about the extractive
sector and it’s impact on development?
Causes (refer to Value Chain)
Step 3: Roots explain why poor decisions on
the value chain–these are sometimes hidden
and many!
Roots
( hard to see causes)
Capacity Gaps
Roots
( hard to see causes)
Hint: ‘supply
side’ capacity
gaps :
… but don’t
forget the
problem
includes lack of
demand for
change too!
•
•
•
•
•
•
•
•
•
Technical expertise
Lack of international standards
Lack of clarity/ definitions
Adequate staff
Adequate financing
Necessary mandate/Authority
Monitoring and Enforcement
Information
Motivation/Political Will
•
No mobilization/organization of
stakeholders
No international support
Lack of public awareness /pressure
Lack of political will
Lack of interest by media
Lack of awareness of oversight actors
•
•
•
•
•
Structural Barriers- Deep Roots
Hint: think about barriers such as
• Structural (lack of strong legislative /judiciary/accountability
mechanisms, No access to information)
Roots
( hard to see causes)
•
Interests (status quo) e.g.
• Elites (individuals, families)
• Political (parties or politicians also branches e.g., executive)
• Networks (factions)
• Inter-ministerial rivalry
•
Norms (lack of demand for change, no culture of political
participation, fatalism, competition rather than coalition
networks)
•
Beliefs/ attitudes (short term: ‘oil will last my lifetime’; ‘gov. will
take care of me’; lack of knowledge of rights; fear; perceptions of
fairness; no faith in the state; no faith in the public; need to
control the public)
Don’t Get Stuck!
POLICY
CAUSES
ROOT
CAUSES
CAPACITY GAP/ STRUCTURAL BARRIER
Instructions
Time
:60
Break into your country groups
Identify key problems
Assess the direct causes using the value
chain for reference.
Assess the indirect or hidden causes for
poor decision-making on the value chain
Step II:
Building a Theory of Change
based on Transparency
Who is a stakeholder in
your Problem Tree analysis ?
Hint: definition of a Stakeholder:
• who is responsible for the action (implementation)?
• who is responsible for decision-making ?
• who is affected by the decision?
• Others: who have a oversight or monitoring role on
the quality of decision-making or who have an
enforcement role.
Stakeholder labeling
A
B
C
Decisionmaker
Affected
Stakeholder
How can we transform the problem with
more transparency and EITI?
A
B
C
Decisionmaker
Affected
Stakeholder
Instructions
Time
:45
Review tree analysis and identify
-Who are the actors you should prioritize?
-What would be your strategy to work with
them to transform the situation ?
- Which “branches” would most benefit
from greater transparency or EITI?
Be prepared to present in plenary.
Present your Tree! (5 min each)
Characteristics of a
Quality EITI report
Purpose
To present 10 indicators of a high quality EITI
report and their application to <country>
http://data.revenuewatch.org/eiti/
EITI: a Model for Change
DATA (Reports)
Is it good
data?:
quality and
accessibility
INFORMATION
HOW do we
use it better?
Better report
analysis
ACTION
WHO should
act? WHAT
should be
done?
Advocacy:
building
support
Why do we care about report quality?
Some
Accountability only works if people
thoughts: can understand the reports
Knowledge of extractive sectors only
increases if numbers are accurate and
complete
Demand for EITI reports will only be
sustained if they are valued as a
reliable source of information
Report quality depends on
local decisions and processes
Global Standards
EITI Rules
Independent
Validation
Local Standards
TORs
Work
plan
MOU
10 Indicators of Report Quality
1
2
3
4
5
Regularity
Timeliness
Materiality
Reliability of Data
Coverage
6
7
8
9
10
Discrepancy
SOEs
Disaggregation
Comprehensibility
Accessibility
 Comparable, objective - NOT exhaustive
 Focused on reports - NOT process
 Based on requirements + Best practice (#s 8,9)
1. Regularity
Measured as:
#of reports / # of implementing years
Does the
country
produce
reports every
year?
The closer the score gets to a 1, the closer
the country is to producing reports every
year
E.g.: country X joined EITI in 2008 and has
produced two reports
Country X Score =2/4, or 0.5
1. Regularity
http://data.revenuewatch.org/eiti/indicators/regularity.php
1. Regularity
http://data.revenuewatch.org/eiti/indicators/regularity.php
1. Regularity and the EITI Rules
REQUIREMENT 5E
First EITI Report within 18 months.
–Thereafter, annually.
2. Timeliness
Measured as :
(year the report is published ) - (latest
year of data contained in the report)
How
recent is
the
The best score is 1, which means the
data in
data is from the year that just ended.
the
report?
E.g.: report X published in 2009 with
data from 2005-2006 receives a score
of 3.
2. Timeliness
http://data.revenuewatch.org/eiti/indicators/timeliness.php
2. Timeliness
http://data.revenuewatch.org/eiti/indicators/timeliness.php
2. Timeliness and EITI rules
REQUIREMENT 5E
–Data no older than the second to
last complete accounting period
–e.g., an EITI Report published in 2010
based on data no later than year 2008
–Note: after 1st validation…
3. Materiality (Requirement 9 +11)
Measured as:
Is materiality defined in the report? (Y/N)
Is it
clearly
defined?
Materiality thresholds should cover
important revenue flows without
overburdening the compilation of an EITI
report
3. Materiality –Country Thresholds
Mongolia
Mali
• All companies whose total
payments exceed MNT 100
million in 2008
• All companies that operate
the 7 main mines and whose
cash flows are greater than
50,000,000 FCFA for the year.
Small-scale miners are
excluded.
3. Materiality – is it clearly defined?
3. Materiality and EITI rules
REQUIREMENTS 9 and 18
•agreed by MSG in templates
•must be disclosed in EITI report!
4. Data reliability
Is the data
provided by
company
and
government
audited?
Measured as:
Are EITI documents required to be based
on audited financial statements? Y/N
If only some companies or agencies did
so, RWI provides details in the notes.
4. Data reliability
3. Country Practice on Data Reliability
Reconciliation
only
• Azerbaijan,
Kazakhstan
audited
company
financial
reports
• Mauritania
Major
companies
audited as
part of EITI
• Gabon
All EITI data
are audited
• Nigeria
• Timor
Leste
4. Data Reliability and EITI rules
REQUIREMENTS 12 and 13
–If data are already audited, EITI only requires
their reconciliation
–If not, EITI requires that the MSG is content
with the agreed method of ensuring all data
is audited in the future (e.g., a time-bound
action plan).
5. Coverage
Main revenue streams measured by:
Does the report include
all main revenue
streams and all
additional information
necessary to assess the
value of in-kind receipts
and to calculate
royalties?
Inclusion of all royalties, taxes, fees,
bonuses and state-owned enterprise
revenues (Y/N/NA)
Additional info measured by:
Payment data from all significant
companies, commodity prices,
production data (Y/N/NA)
5. Coverage
5. Coverage and EITI rules
REQUIREMENTS 9, 11, 14 and 15
– Guidance on materiality
• List of revenue streams that should be disclosed (R9d);
other payments may be material (R9 e to g)
– No mention of volumes and prices!
– Ultimately, materiality defined nationally (9c)
6. Discrepancies
Measured as:
When
payments and
receipts do not
add up, does
the report
explain why?
Do reconcilers try to explain
discrepancies ? (Y/N)
Examples of explanations:
-Why/How did discrepancies happen? (with
examples);
-Do the reconcilers provide corrected or
reconciled figures? (including details on
reconciliations?)
6. Discrepancies
6. Discrepancies and EITI rules
REQUIREMENTS 17 and 18 b5
– Discrepancies must be identified
– Where possible, explained or addressed
– Recommendations for remedial actions
7. State-Owned Enterprises (SOE)
Does the
Report
cover SOE
payments
and
receipts?
Measured as:
Are SOE revenue data clearly
explained? (Y/N)
SOEs, e.g. national oil companiesreceive large revenues on behalf of
government.
NOCs receive ~90% of oil revenues in
Yemen, ~70% in Cameroon and ~60%
in Nigeria
7. SOE Revenue Flows
7. SOES and EITI rules
REQUIREMENTS 9 and 11
–SOEs are often responsible for collecting
certain revenue streams and selling physical
products. They then transfer some or all of
the proceeds to the treasury, either directly
or as company dividends. These transactions
should be explained clearly in the report.
8. Disaggregation
Best determinant of whether an EITI
report is useable and significant
Is revenue
Measured by:
data broken
down and
meaningful? Disaggregation at company, revenue
stream, project, commodity levels
8. Disaggregation (Best practice)
8. Disaggregation and EITI rules
REQUIREMENTS 9c
–EITI policy is neutral
–Must be agreed at the national level!
9. Comprehensibility (Best practice)
Measures whether reports have:
a) a summary with key findings and
reconciled revenue totals;
Can readers
understand
the report?
b) a clear indication of what currencies and units
of measurement are used;
c) a written explanation of key findings and
recommendations;
d) a definition of terms.
These indicators are not enough to capture readability.
Many reports score well but are still hard to understand.
9. Comprehensibility
9. Comprehensibility cont’d
9. Comprehensibility and EITI rules
REQUIREMENTS 17 and 18
Rules mention “comprehensibility”
• explanation of discrepancies
• recommendations where necessary
• Encourages summary and comparison of
revenue streams to total revenues etc
10. Accessibility
Can a citizen
find and
read the
report?
Measured by:
•Availability in the official
languages of the country (Y/N)
•Accessibility on a government
website (Y/N)
These indicators may not enough to
capture accessibility, e.g. does
government make report data known
through media?
10. Accessibility
10. Accessibility and EITI rules
REQUIREMENT 18d
–Paper copies distributed
–Online dissemination
–Written clearly in all appropriate languages
–Outreach events
Instructions
Time
:45
Break into your country groups
Assess your report according to the quality
indicators, follow the instructions in the
Handout.
Submit answers to the facilitators
Be prepared to present in plenary tomorrow.
1. REGULARITY
(# OF REPORTS/#OF YEARS)
2. TIMELINESS
(DATE OF REPORTS - DATE OF DATA)
3. MATERIALITY
(IS IT DEFINED?)
4. DATA RELIABILITY
(Are companies and government to provide
data from audited financial statements?)
Company
Audit
Government
Audit
No
Government
Audit
No Company
Audit
5. COVERAGE
a) royalties
b) taxes
c) surface, rental or license fees
d) bonuses
e) state-owned enterprise (SOE)
payments
f) Report covers all extractive
sector companies.
g) Report states the price of any
product received or sold by
government.
h) Report states the quantity of
resources produced.
AZB
KAZ
KYR
MON
AFG
6.DISCREPANCY
CAUSES
EXPLAINED
RECONCILED DATA
FOLLOWING
CORRECTIONS
RECONCILED DATA
NOT PROVIDED
CAUSES NOT
EXPLAINED
7. SOE
(ARE REVENUE FLOWS EXPLAINED?)
8.Disaggregation
AZB
a) Companies
b) Projects
c) Commodities
KAZ
KYR
MON
AFG
9.COMPREHENSIBILITY
AZB
a) SUMMARY
b) CURRENCIES
AND UNITS
EXPLAINED
c) KEY
FINDINGS AND
RECS
d) DEFINITION
OF TERMS
KAZ
KYR
MON
AFG
10. ACCESSIBILITY
IN OFFICIAL
LANGUAGE
ON GOV
WEBSITE
NOT ON GOV
WEBSITE
NOT IN
OFFICIAL
LANGUAGE
Try it out!
Data on the Extractive Sector +
Report quality analysis for all EITI countries
• Compare your country with others
• Cross check your own analysis
• Monitor your country’s score year to year
• Download all or selected data in excel sheets or
pdf
• Easily generate charts and visual information
data.revenuewatch.org/eiti
Basic data
Report Quality Indicators
Compare indicators across countries
Instructions
Time
2:15
Break into your country groups
Based on your exercises complete the matrix
of recommendations and action plan in the
handout
Does it fit within the theory of change?
How does it contribute to transformation of the
sector?
Prepare to present in plenary.