Promo%ng Good Governance in the Extrac%ve Industry Sector in Asia Pacific: A Value Chain Approach

Transcription

1 Promo%ng Good Governance in the Extrac%ve Industry Sector in Asia Pacific: A Value Chain Approach Chandra Kirana Asia Pacific Regional Coordinator, RWI October, 2009

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3 Two things are infinite: The universe and human stupidity; AND I'm not sure about the universe.

4 Extrac%on Benefits - Mi%ga%ng Risks Oil, gas, minerals and metals are FINITE Extrac@ng these resources entail RISKS: Environmental Risks Social Risks Human Rights Viola@ons Extrac@ng these resources can bring VALUABLE BENEFITS development. GOOD GOVERNANCE can help ensure that benefits outweigh the nega@ve impacts.

5 Environmental Risks

6 Social Risks and Human Rights

7 Is the Revenue Used Wisely?

8 Characteris%cs of Good Governace According to the UN - Economic and Social Commission for Asia Pacific Accountable Consensus Oriented Transparent Participatory GOOD GOVERNANCE Responsive Follows Rule of Law Equitablee and Inclusive Effective & Efficient

9 The Industries Value Chain Decision to extract/not to extract Fiscal Terms Trading of Revenue Mngt and Awarding of contracts/ licenses prosess Tax and revenue Development project/policies Good Governance needs to be Comprehensive Throughout the Value Chain

10 Governance can only be as strong as the weakest link in the Value Chain Do the laws and of a country address all the issues rela@ng to the Extrac@ve Industry equally? Is there civil society par%cipa%on and oversight throughout the en@re Extrac@ve Industry value chain? Is the governmnet able to enforce GOOD GOVERNANCE of the Extrac@ve Industry sector? Do companies operate in a responsible and accountable wasy throughout the Extrac@ve Industry value chain?

11 Concentra%on of NGO Work Along the EI Decision to extract/not to extract Value Chain in 10 Asia Pacific Countries Fiscal Terms Trading of Revenue Mngt and I 87% II 43% III 18% IV 56% V 12% VI 56% VII 56% VIII 56% Awarding of contracts/ licenses Extrac@on prosess Tax and revenue collec@on Development project/policies

12 The Need Work Together Construc%vely Individually are strong in certain parts of the EI value chain. Together all could be strong throughout the en%re value chain and could push Good Governance in the sector in a powerful way.

13 In Summary The Industries Sector can provide valuable benefits for development The Industries involve serious risks Safeguards for responsible and accountable Industries must be comprehensive. GOOD GOVERNANCE must be established throughout the Industry value chain.

14 SOME EXAMPLES THE RESOURCE CHARTER an example of overarching values and principles to achieve responsible for sustainable development. THE Extrac%ve Industries Transparency Ini%a%ve (EITI) an examples of a tool to establish and implement good governance.

15 THANK YOU J

16 Decision to extract/not to extract Here it is important that local communi%es (in many cases Indinegous People) are also included in the decision making process and are facilitated to be able to make prior informed decisions. Is a Prior Informed Consent proccess being honored? In this decision making process the government and the companies involved need to be transparent about the environmental and social costs such a project will entail. And explain how these will be dealt with.

17 Awarding of contracts/ licenses Is this process trasparent, are the responsible government officials ensuring that through their ac%ons, the public are ge_ng the best deal, or is the handing out of contracts shrouded by opacity? Is there an open tender process, with clear criteria of selec%ons that are communicated openly and publicly?

18 Fiscal terms Does the government have the ability to nego%ate the best fiscal terms for the public good? Is it reflected in the agreed conract between the company and the government?

19 process Are environmental and social costs being externalized onto the local communi%es and environment? Does the company regularly inform the local government and local communi%es about it s environmental and social safety standards, does it have implementa%on mechanisms in place, does the community know what it must do in case of an accident? Does the company inform the community of what it will be responsible for? Etc.

20 Trading of In many cases, for example like in Oil ans Gas contracts, the government receives shares of the produc%on, this product (oil, gas) is then sold by a government agency on the market to gain revenues. Is the government agency responsible for the trading of government shares of commodi%es doing it in a transparent and accountable way?

21 Tax and revenue Are taxes and reveues collected by the government being accounted for in a trasparent manner? Is the country implemen%ng EITI, where CS, through the Mul% Stakeholder Working Group, has oversight power together with other stakeholders on how government revenue receipts, and company payments to governments are publicly reported?

22 Revenue management and How is the government managing it s revenues to address the various challenges related to EI revenues? Is it able to save prudently in %mes of great windfalls? Does it go on a spending spree on projects that do not contribute to sustainable development? And most importantly is the government regularly repor%ng to the public how it is managing it s EI revenue funds?

23 Development projects/policies Is the government carying out development in considera%on of the fact that EI resources are finite/ Is it strengthening other sectors of its economy? How is spending on health, infrastructure and educa%on?