With a fifth of enforcement actions under the US Foreign Corruption Practices Act originating from oil, gas and mining, the prevalence of corruption in the sector is an unfortunate reality. But alongside this reality, 2021 brings better news.
Publishing the terms of extractive contracts is a powerful antidote to corruption for resource-rich countries. Contract transparency is rapidly becoming the norm and, from January 1, 2021, all 55 countries implementing the Extractive Industries Transparency Initiative (EITI) are required to publish all new contracts and contract amendments.
Progress has been made on contract transparency across the region and there are good examples of how contract information has been used towards this goal.
Tanzania has introduced a contract disclosure law, and Africa Energy Tanzania has used its disclosed Model Production Sharing Agreement to explain the terms of their contract and its implications. The EITI’s requirement offers an opportunity to move from policy to practice.
These East African producer countries are members of the EITI, the global benchmark for transparency in the extractive industries. In Uganda — a fledgling EITI member — disclosures could help inform public debate on technical taxation questions that have delayed planned extractive projects.
In Kenya — a country that is not yet a member of the EITI —companies and the President are calling for the publication of oil contacts as a means of resolving reported disputes with companies over cost recoveries.
In the run up to 2021, we are asking governments, companies, civil society and sector stakeholders to take three steps towards greater sector transparency.
Firstly, to publish all contracts and licenses that are granted, entered into or amended from January 2021. We believe this is best achieved through government platforms, ensuring access to data for all and the routine publication of contracts as they are concluded.
Secondly, to use contract information. Legal experts and media outlets need not be the sole beneficiaries of this data. Contracts can help citizens understand and monitor performance on the obligations placed on companies, including measures to protect communities and the environment, make social payments, provide local employment or use local suppliers.
Finally, contracts should inform dialogue and debate on key decisions and policy options. Multi-stakeholder groups in the 55 countries implementing the EITI Standard promote inclusive dialogue. A key part of their role is to ensure that data required by the EITI Standard — including contract information — can inform debate and decision making.
Finally, contracts should inform dialogue and debate on key decisions and policy options.
Multi-stakeholder groups in the 55 countries implementing the EITI Standard promote inclusive dialogue. A key part of their role is to ensure that data required by the EITI Standard — including contract information — can inform debate and decision making.
Mark Robinson is the executive director, Extractive Industries Transparency Initiative