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Message from the EITI International Secretariat
1. Message from Eddie
“Some 80% of world petroleum reserves are controlled by state companies and 15 of the 20 largest oil companies are state-owned” according to the IMF. State-owned enterprises (SOEs) are less common or dominant in the mining sector but may still play an important role in some countries.

For this circular, we want to highlight some work we have been doing to increase the transparency of state-owned enterprises. So many developments have happened in the past year in which we want your inputs. The International Secretariat has created a network for state-owned enterprises. We commissioned a study to look at how EITI could play a role in strengthening SOE transparency. This will be discussed at this month’s Board meeting in Dakar on 30-31 October. 

Also in Dakar, the Board will decide on the Validation of Afghanistan and Papua New Guinea, as well as Nigeria’s second Validation. Ethiopia will also be discussed but is not yet due for decision. We expect the different constituencies to approve their constituency guidelines in preparation for the nominations for the new Board in 2019. Finally, there will be discussions about updating the EITI Standard to clarify the requirements and to reflect the lessons from Validation. We need the input of implementing countries to ensure a good 2019 Standard.  

We also remind you that the Board asked you to revise and re-orient your workplans to include activities related to systematic disclosures. There is, of course, a wide range of different starting points, institutional frameworks and understanding of mainstreaming across 51 countries.  This is about drafting a work plan that takes these issues into account and engages stakeholders. 

Thanks,
Eddie 
2. Furthering state-owned enterprise (SOE) transparency
The International Secretariat commissioned a study to look at options for improving state-owned enterprise (SOE) disclosures. This draws lessons from Validation. Among the options mentioned in the study are the adoption of an SOE certification scheme, development of a new SOE standard, building on and expanding EITI implementation guidelines, creating an International Forum or an SOE Transparency Leadership Group, providing technical assistance and facilitating peer exchanges, and complementing existing initiatives. We would like to hear your thoughts on these options. 

You can find the study here.

We have also convened an EITI network of SOEs to discuss how the EITI could further the work on SOE transparency. We are also exploring selecting a group of countries where we can undertake targeted efforts for SOE transparency. If this is a relevant issue in your country and would like to participate in any of these efforts, please reach out to your country manager in the EITI International Secretariat. 

 
3. Validations
Forty-five of the 51 EITI implementing countries have now either concluded or are undergoing Validation, while eight EITI countries have either concluded or are undergoing their second Validation. The EITI Board has now taken decisions on the first Validations of 32 EITI countries and on the second Validations of three EITI countries. The majority (24) of EITI countries that concluded their first Validations were assessed as having made “meaningful progress” overall in implementing the EITI Standard, while five were assessed as having made “inadequate progress” overall. In many cases, the corrective actions relate mainly to minor oversights. Corrective actions from the first Validation had been comprehensively addressed  in two of the three second Validations. 

The EITI Board will consider the Validations of Afghanistan, Ethiopia and Papua New Guinea as well as the second Validation of Nigeria in Dakar. 

You can find a summary of Validation results here.
 
4.    Mainstreaming in country work plans
At the Board meeting in Oslo in February, it was decided that systematic disclosures would now be the default expectation for EITI countries. As a preliminary step, MSGs are required to orient their work plans towards systematic disclosures.  This could include activities that focus as much as possible on disclosing data through government and company platforms rather than in the separate EITI reports. Please remember this Board decision as you draft your work plans for 2019. We will highlight good examples of country work plans with activities for mainstreaming. Drafting mainstreaming work plans will also feature in upcoming regional workshops. We encourage you to be in touch with your country managers if you need any assistance regarding this. 
5.    Implementing countries constituency guidelines
The draft implementing country sub-constituency guidelines were circulated in the August 2018 National Secretariat Circular and its addendum of 29 August with a request for comments or questions. By the 12 September deadline, the following comments and questions were received and addressed:
  • A proposal to move Sao Tomé and Principe from Region 4 to Region 3 to better reflect commonalities with Nigeria, with whom Sao Tomé and Principe shares a Joint Development Zone. You will see this proposal incorporated, in tracked changes, in the attached draft.
  • A question regarding funding. As the draft guidelines clarify, candidates should obtain a confirmation in writing from their government that the necessary resources will be made available for their participation on the EITI Board. 
The draft constituency guidelines have also been modified to reflect changes in the implementing country sub-constituency following the withdrawal of Solomon Islands and the acceptance by the Board of the Netherlands’ candidature in June 2018.

Unless we hear otherwise by 29 October, it will be understood that there is support for this proposal. Once the guidelines are adopted, the process will begin for nominating members to the Board who will be elected at the next EITI Members’ Meeting in 2019.

For any questions or comments, please contact Pablo Valverde (pvalverde@eiti.org).
6.    Africa beneficial ownership conference in Dakar and Africa National Coordinators meeting   
On 31 October to 2 November, African countries will convene for a regional EITI Conference on Beneficial Ownership Transparency in Dakar, Senegal. The conference will engage various stakeholders from government, civil society and companies to seek a way forward on Beneficial Ownership in Africa. The keynote address will be delivered by HE Macky Sall, President of the Republic of Senegal. This will be followed by an opening panel discussion on Beneficial ownership and Domestic Resource Mobilisation. You can find more details here.

Earlier the same week, a meeting of EITI Africa National Coordinators will also be held in Dakar on Monday 29 October 2018. The purpose of the meeting will be to take stock of recent developments related to EITI globally and new priorities for EITI implementation in Africa. The issues on the agenda include common challenges and emerging priorities for the region, encouraging thematic EITI reporting and systematic EITI disclosures, and analysing extractives data to inform debates on domestic resource mobilisation.

For more information about this meeting, please contact Leah Krogsund (LKrogsund@eiti.org). 
7.    Funding contributions
As many of you will remember, the EITI Board agreed that from 2017, all implementing countries are required to make an annual contribution of USD 10,000 towards the funding of the EITI International Management. This decision was taken in order to contribute towards the EITI Validation process, which is estimated to be around USD 70,000 per country. This decision was also taken considering the growing need from countries for support from the International Secretariat.

We appreciate the contributions from Governments of Armenia, Burkina Faso, Cote d’Ivoire, Dominican Republic, Guinea and Papa New Guinea in 2018 and look forward to assisting others in ensuring their compliance with the funding requirements. Please be in touch with Shem (skasimova@eiti.org) at the Secretariat if you require any assistance on delivering the required funding contribution from your implementing country to the EITI International Management. 
8.    EITI retreat with partners
In September, 30 representatives from 17 partner organizations joined us in Oslo for two days to discuss priorities and best practices for strengthening natural resource governance. Watch the video below for some highlights of this event. 
How to improve good governance in oil, gas and mining?

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