Brief Presentation on Ethiopian Extractive Industries

Transparency Initiative (EEITI) Contributions To EI

7th-8th September,2014

Hilton Hotel,Addis Ababa

Contents

Why EITI is concerned to EI

EITI & its objectives

EITI roles

New EITI Standards

Who manages EITI

Current EEITI status

Challenges

Way forward
Extractive Industries:
has a geological potential for the discovery of new
sizeable oil, gas & mineral deposit;
Has a potential as an important sources of foreign
currency & government revenue;
Is an export oriented sector that satisfy the
increasing demand from industrial production,
agriculture & high-tech sectors;
Has a potential to create local linkage for social &
economic development
Ethiopia has extensive & unique artisanal mining
sector which is used as important source of job
creation;
EEITI & Contributions To the EI:
EITI is a global standard aiming to strengthen
revenue governance by promoting transparency &
accountability in the ES.
Managed/implemented in accordance to the global
EITI principles & rules set out by the EITI board;
Main objectives of the initiative is- to contribute to
public debate about the NR. Management;
Core mission is – developing high standard of
transparency & accountability through high
stakeholders engagement;
Key Out Comes of the initiative is- stakeholders
understand what the figures in EITI reports mean;
Therefore EITI:
 will increase trust & growth in dialogue between
gov`t, company, & CSOs;
Conveys credibility & reputational assurance to
companies seeking to operate according to
international standard;
Creates an opportunity to demonstrate company &
government commitment to transparency &
accountability with calls for greater transparency on
the rise, active participation in the EITI;
 EITI data will help citizens to hold gov`t accountable
for resource revenue management and track
expenditure;
 Cont`d
Is an important in improving the governance of
resource revenues in reducing opportunities for
corruption & for improving development outcomes
in mineral dependent economies;
Creates a platform for debate involving tripartite
groups including relevant community groups;
Gives an opportunity for stakeholders to internalize
EITI principles that states, public understanding of
government revenues & expenditures overtime
could help public debate & inform choice of
appropriate & realistic opitions for sustainable
development;
New EITI standard
Worldly it is recognized that the prudent use of NR
wealth should be an important engine for sustainable
economic growth that contributes to sustainable
development & poverty reduction.
To realize this fact EITI rules went a long way since launching
to generate information, but it was understood that it
didn`t go far enough to create a wider & deeper public
understanding to inform policy choice;
Still transparency about company payment & revenue
received by gov`t is important for accountability, but
tells citizens little about who owns extractive
companies & ultimately benefit from the companies
activities;
• Therefore the New EITI standard identify that in many case
the real owners`` beneficial owners`` of the companies that
have acquired rights to extract oil, gas & mineral is
unknown;

• This opacity can contribute to corruption, money

laundering and tax evasion in the extractive sector;

• Thus why the new EITI standard was adopted in 2013

requiring more comprehensive, relevant, reliable, useable
data across the full scope of NR management including the
real` beneficial owners` registration of all companies;
Some important Requirements of the new EITI
standards:
Contributions of the ES to the national economy;
Descreption of the fiscal regime;
Overview of the relevant laws;
Production figures project by project;
Ownership of the license holders;
Gov`t participation in the extractive Sector;
Level of the availabilities of the extractive sectors
data in open format to citizens
Who Manages EITI?
1. EITI is managed by the tripartite decision making body
comprising representative from Gov`t, Company & CSOs;
The main role of this body is:
 Over all strategic-decision- making
 Define the scope of EITI process
 Identify, asses & remove barriers to implementation
 Prepare the work plan & monitor implementation
 Select & oversee the work of independent administrator
 Contribute to & approve reporting templates
 Ensure that EITI report is comprehensively & publicly access
 Take steps to lessons learnt, address discrepancies &
ensure the sustainability of the EITI process
2.Implementation Secretariat
The main role of this body is:
 Facilitating the work of the NSC/MSG
 Serving as a contact entity for questions & additional
information specific to the EITI process
 Provide support to the stakeholders including advice,
guidance & training on the EITI rules & requirements to the
extent of good practicies in the EITI implementation & peer
learning beyond compliance
 Encourage local & international institutions to generate
financial & technical support
 Facilitating the reporting process with companies & gov`t
 Drafting & consulting on the EITI work-plan & operational
budget
 Cont`d
 Mobilizing funding & other resources
 Helping identify & resolve legal barriers to EITI implement.
 Disseminating EITI reports & arranging public discussion
 Preparing for & coordinating the validation process
 Draw up reporting templates based up on the country`s
fiscal & contractual agreements
 Provides guidelines & accounting definitions to help
companies & gov`t template that define
.which revenue streams must disclosed
.level of data disaggregation required
 Responsible for ensuring that the report is communicated
 Responsible for turning all decisions of NSC in to action…
Work done so far:
• 28-29 July, 2009 a launching conference

• 18-19 October, 2010, 22 participants from company and

gov`t entity were atend the training on reconciliation
process in Ministry of mines

• March 2011, 78 CSO and Directors from ministry of mines

were attended the workshop held in Adama

• 18-19 October, 2012, workshop for CSO in Hawassa

• 2-3 April, 2012 about 45 participants from the Extractive

companies were attend training given by IS;
• 5-6 April,2012 -52 participants from Federal and Regional
government agencies were participated on the workshop
given in Adama;
• 15-17 May, 2013, workshop for 127 CSOs were given in
Adama (Excutive hotel)
• 19 September, 2013, a total of 91 participants attended
Natural Resource forum held in Dessalegn Hotel
• June 2014,EEITI Candidature Launching forum was made in
ilille Hotel in which more than 120 attendees participated
• 20-22 August & 17-18 September 2014, representatives of
East and West African Extractive Industries Transparency
Initiative (EITI) member Countries conduct Knowledge
Exchange Program in Addis;
Challenges
Delay to achieve candidacy status
Gaps/problems in data management system
Lack of cooperation & delay by some of the
companies & gov`t entities in filling the templates
Skill/knowledge/capacity gap at different level
Deliance by the independent firm to complete
reporting process
Lack of EEITI legal act
Way for ward
Identification the Existing situation on the Ground;
Do citizens understand what happens to EIs
payment & revenues generated?
Can the communication program be made more
effective ?
Is capacity building needed for stakeholders on
licensing procedures, beneficial ownerships,
contracts, expenditures…
Do we/you think, these all questions could be
natural to discuss in NSC meeting/ local & national
forums ?
Identify National Priorities to develop EEITI workplan
Create transparency on payments made by Mining
companies & revenue collected by government entities to
ensure accountability;
Raise public understanding of the license allocation
process;
Increase revenue by creating conducive environment (i.e.
clear licensing & regulation system,…) for private
investment to enhance the contribution of EI in the
national economy;
Awareness rising for stakeholders to ensure their
engagement in the EEITI process;
 To promote CSR in the mining sector;
Key issues identified to be reflected in the EEITI
work-plan for the year 2014-2015
o Information to be disclosed & published including
types of payments & revenue streams;
o Materiality level the company/payment size above
which companies will be required to report;
o Any legal or contractual barriers to be over come;
o Role of independent administrator;
o Schedule for validation;
Thank you so much!