Transcript Slide 1

Mission: The Revenue Watch Institute promotes responsible
management of natural resource wealth for the public good. We
believe that effective revenue management, increased citizen
engagement and real government accountability can help turn
resource wealth from a hindrance into an asset.
Our goal: Systemic change – in the policies and practices of
governments, companies and international institutions and donors – to
mainstream transparency and accountability in the management of
extractive industry revenues.
Helping countries get a better deal for their resources from companies;
helping citizens hold governments accountable.
Why a Revenue Watch?
The Resource Curse in Brief
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About 50 developing or transition countries are resource dependent,
2/3 of world’s most impoverished live inside their borders on less than $2
a day
With good governance the exploitation of natural resource revenues can
generate large revenues to foster growth and reduce poverty. However
when governance is weak, it may result in poverty, corruption, and
conflict:
Dutch Disease: export booms lead to exchange rate appreciation, thus
reducing the competitiveness of non-booming export sectors, such as
agriculture or manufacturing.
Rentier State:oil, gas, and mining companies provide state an
autonomous flow of funds or “rents”, no incentive for government to build
strong institutions linking state and its bureaucracy to citizens through
taxation. States become weakly institutionalized, highly vulnerable to
patronage spending or corruption, and unaccountable to the public. The
cumulative result of years of external rent-seeking is corrupt,
authoritarian regimes.
RWI Background
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Launched as program of Open Society Institute, now global
and independent policy institute and grant making
organization
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Exclusively dedicated to resource-rich countries, concerned
with both revenue and expenditure transparency
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Approach
• Continuous independent civil society oversight /
monitoring;
• Timely evidence-based policy research builds
understanding
• Advocacy that transforms policy
• Training that empowers media and civil society
• Technical Assistance for transparency and good
management practice along the value chain
Countries: Azerbaijan, Georgia, Kazakhstan, Kyrgyz Republic,
Mongolia, Russia, Angola, Cameroon, DRC, Guinea, Ghana
Liberia, Mauritania, Nigeria, Sao Tome & Principe, Sierra
Leone, Tanzania, Uganda, Sudan, Iraq, Yemen, Peru, Mexico,
Ecuador, Brazil, Trinidad and Tobago, Indonesia, Timor Leste,
Cambodia
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The International Transparency
Movment
Publish What You Pay
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Extractive Industries Transparency Initiative (EITI)
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Global coalition of more than 300 NGOs engaged in campaign to promote greater
transparency of oil and mining revenues,
demanding full extractive company disclosure of all material payments made to governments
and full government disclosure of resource revenues from companies
Multistakeholder initiative launched by UK; More than 20 candidate countries; IOC majors;
CSOs
Voluntary mechanism for transparency of revenues and expenditures in extractives sector
(oil, gas, mining)
International Accounting Standards Reform
– Agreement by IASB after two year PWYP campaign to develop special financial
reporting standard for the extractive industries, once approved will become law
in 50 countries
Ratings Agencies
– October meeting brought ratings agencies, investors and issuers together to
discuss incorporating extractive revenue transparency/EITI into sovereign credit
ratings
Mandatory Listing Requirements with US SEC
– RWI and PWYP working with US Congress on bill requiring US registered
extractive companies to report payments country by country, similar effort in EU
OPIC/Export Credit Agency/MDBs
– RWI and PWYP working with US Congress to require countries and companies
to be implementing EITI to receive financing/insurance
National Level
Extractives Industry Value Chain
Adapted from Collier (2007)
Contracting
and
Concessions
Fiscal
Terms
Reve
nue
Colle
ction
Saving
Commodity
Windfalls
Spen
ding
EI
Impact
Reve
nues
Well
Contracting and Concessions: how to grant concessions, licenses,
rights to extract resources, including transparency and oversight
Fiscal Terms: royalties, taxes, equity/production shares
Revenue Collection
Savings: When and How Countries Should Save Commodity Windfalls
Spending EI Revenues Well
Impact: Monitoring and Evaluation
Mongolia Campaign
Efforts to Raise Awareness, Negotiate a Better
Deal, and Involve Civil Society…
– Mongolian activists organized TV forum and
opeds created widespread public awareness
about scant mining revenues and
environmental impact concerns, on fiscal
issues of mining; call for renegotiation of
contract
– RWI team advised government on fiscal
terms new tax, royalty, environmental and
other mining-related policies
– RWI team led discussions in public fora and
seminars for government officials on tax and
royalty issues
– Seminar for government officials on
resource funds and their possible use in
Mongolia and workshop on mining and
budgets for civil society
Mongolia
Results
…produce tangible results for Mongolia
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Civil society actors testified at Mongolian
parliament advocating increase of royalty rates,
which was subsequently accepted by the
Parliament in the new law
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Since its introduction in May 2006, the windfall tax
has earned the Mongolia government
approximately $165 million USD in additional
revenues.
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Saving it and Spending it: Proceeds from the
windfall profits tax have been put into a special fund
dedicated 1/3 to creating a savings account for
each Mongolian child, 1/3 to health care and 1/3 as
cash support for newly married couples.
Jury’s still out on:
• Political impacts: positive spillover of
transparency into other sectors
• Economic impacts: effects of transparency
on costs of capital
• Will EITI validate undeserving countries?
• Regulation of National Oil Companies?
• BRICs (Brazil, Russia, India & China)
• Research on use of revenues
(Venables/Collier)
5 new ideas on where we go from here
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Work with parliaments on substance of oversight.
– Most programs on parliamentary capacity-building to date have focused on basic process issues—how to
form committees, write basic legislation, take votes, etc; very few programs seem to focus on content related
to extractive industries.
– In the case of Africa especially, where new discoveries are forcing countries with little to no experience to set
policies and regulations in this complicated area for the first time, as well as assess and approve contracts,
Legal Capacity-building
– on contract negotiations and renegotiations, looking to bring out existing expertise or train and hire lawyers.
We want to bring others aboard.
Drilling down to Subnational level
– build the capacity of key stakeholders—sub-national executive branch officials and legislators at both the
central and sub-national levels—essential to improving the management and oversight of oil, gas, and
mineral resources.
– document and analyze the impact of these interventions and generate original research that deepens our
understanding of the actual impact of strategies designed to increase public oversight of the extractive
sector, not just on accountability and governance, but on longer-term economic welfare.
Media capacity-building
– Much interest and ideas to have more sustainable engagement with journalists and community radio on
substantive content; piloting projects in the Niger Delta, Uganda and possibly elsewhere using a combination
of fellowships, on-site capacity-building with experienced journalists, distance mentoring and utilization of
regional university centers with expertise on these subjects.
New media tools
– how do we create a place for “crowdsourcing” revenue data, where multiple sources can add their own
figures related to production revenues, etc. from countries, regions and companies -- on the premise that
this "open-source" approach would eventually help reduce the discrepancies among official data sources.
(Like an accountability "wikipedia" for the EI sector
– what are the tools that CSOs and individuals in resource-rich countries could most use to fight sector opacity
and corruption? A place to share cellphone photos or text messages about pipeline fires, spills, incomplete
development projects? A way to send weekly text updates about production levels? A library of video or
audio updates or questions from civil society workers, or parliamentarians?
Thank you