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Message from the EITI International Secretariat

National Secretariat Circular
 
International Secretariat Oslo, November 2019
Table of Contents
  1. Introductory message from Mark
  2. Updates from the EITI Board meeting in Addis Ababa
    1. The EITI's role in addressing corruption
    2. Validation Review
    3. Country Validation
  3. Improving coordination among the implementing country sub-constituency
  4. Beneficial ownership
    1. Country progress
    2. Assessing beneficial ownership requirements
  5. Country work plans
  6. Governance
  7. Financial contribution from implementing countries
  8. National EITI logos
  9. Useful links
1. Introductory message from Mark Robinson
Dear colleagues,
 
We concluded a very productive and energetic Board meeting in Addis Ababa a few weeks ago.  I’m pleased to provide updates on important Board decisions through this circular, and flag some important reminders as you prepare your work plans for 2020.
 
The EITI’s role in addressing corruption has been the subject of much debate in the past years. This was one of the key topics discussed by the Board in Addis, which agreed on initial steps to further strengthen the EITI’s role in combating corruption. It is an ongoing discussion that the Board will continue to pursue at its strategy retreat in Oslo in February. Please take time to consider how the initial steps agreed by the Board and discussed in this circular could be implemented in your respective countries. We also hope you will actively engage in the consultations that we are planning for the coming months. 
 
We congratulate Democratic Republic of Congo (DRC), Iraq, Mozambique and Myanmar for having achieved meaningful progress in implementing the EITI through the latest round of Validations. Forty-four countries have now been Validated. Drawing from lessons learned from previous Validations and from feedback from implementing countries, the Board is currently undertaking a review of Validation procedures and the existing Validation model. A working group has been created to lead the review. Issues for consideration include how Validation takes impact into account, who should undertake Validation and how it is resourced, the structure, timing and consequences of Validation, as well as assessing the civil society protocol. This is an ongoing discussion that implementing countries are highly encouraged to follow. Further details on how you may be involved are discussed in this circular.
 
Your inputs to these ongoing important discussions are very important. As the Board prepares for its strategy retreat in February and as the Validation review takes shape, the need to strengthen your voice as a constituency is becoming more urgent. Your colleagues from other implementing countries met in Addis to explore how you can best communicate your suggestions and concerns to the EITI Board. Discussions are underway to formalise a regular coordination mechanism between Board members and the countries they represent. We would like to hear your thoughts and we encourage you to be involved in the various consultations that are planned ahead of the next Board meeting.
 
On the policy front, we are delighted with the progress we have seen in many EITI countries on beneficial ownership as we draw near the January 2020 deadline. The EITI is also stepping up its engagement with Supreme Audit Institutions (SAIs). Together with the Office of the Auditor General of Norway we hosted a workshop in Addis on strengthening collaboration with SAIs. The workshop brought together EITI and SAI representatives from Ethiopia, Ghana, Malawi, Mozambique, South Africa, Sierra Leone, Tanzania, Uganda, Zambia and Zimbabwe. This is an initial but important step towards defining how the EITI and SAIs can work together. Please take time to read the highlights of this meeting from our website.  
 
Lastly, I want to draw your attention to some important reminders in this circular. You will recall that MSGs are expected to publish plans for contract disclosure and mainstreaming which should be integrated in work plans for 2020. The Secretariat will provide detailed guidance for how this can be done in the next national secretariat circular, but we hope MSGs are already keeping this in mind as they draft their new work plans.
 
Our best regards,

Mark Robinson
Executive Director
2. Updates from the EITI Board meeting in Addis Ababa
The EITI's role in addressing corruption
One of the highlights of the Board meeting in Addis was the Board’s discussion on the role that the EITI plays in addressing corruption. Drawing from the discussion paper prepared by an independent consultant Alexandra Gillies, the Board examined the EITI’s actual and potential contribution to corruption mitigation in EITI countries. The paper explains that as the EITI provides information on licensing, contracts, revenue collection, beneficial ownership, and commodity trading, it sheds light on transactions that are vulnerable to corruption. However, the paper argues that more could be done beyond disclosing information. It identifies some challenges and provides recommendations to the Board on how the EITI could further its work on anti-corruption. Moving forward, the Board decided to prioritise the following action points:
  • Clearly articulating EITI’s role in fighting corruption through EITI’s communication strategy and making stakeholders aware of the Code of Conduct;
  • Exposing corrupt practices that are vulnerable to abuse by developing practical guidance on how EITI reporting could inform discussions on anti-corruption at the country level;
  • Together with partners, facilitate transparency and multi-stakeholder engagement around known areas of risk and share good disclosure practices related to subcontracting;
  • Continue work with supporting companies to showcase good company approaches in fighting corruption.
The implementing country sub-constituency has agreed to establish a working group to provide inputs to a Board  discussion on EITI’s anti-corruption efforts in February. If you are interested in joining this working group, please get in touch with Gay Ordenes GOrdenes@eiti.org.

The full discussion paper can be accessed here.  
Validation Review

At the Board meeting in Paris in June, the Board agreed to undertake a review of the Validation model to consider lessons learned from previous Validations. Drawing from the results of initial consultation with implementing countries, the Validation review will focus on the following questions: 

  • How to ensure that Validation encourages continued progress, reflects each country’s priorities and enhances the impact of EITI implementation, while upholding the integrity of the EITI Standard?
  • Who undertakes Validation and how it is resourced? Considerations include financial sustainability, the timely execution of Validations and the allocation of sufficient resources for implementation support.
  • An overall assessment of progress and consequences of Validation, taking into account the structure and timing of Validation and how individual requirements are assessed,
  • Reviewing Validation of the civil society protocol.
In the meantime, the Board agreed more minor but key updates to the Validation procedure in Addis Ababa, which included codifying the procedure for second and subsequent Validations, clarification of the process for stakeholder comments, the scope of the independent Validator’s work and the Board-approved criteria for considering new information subsequent to the commencement of Validation.

A working group has been created to review the Validation procedures. The group is composed of Ian Mwiinga, Sonia Le Bris, Timo Voipio, Stephen Douglas, Carlos Aranda, Cielo Magno and Cesar Gamboa. If you are interested in providing inputs to this discussion, you may reach out to Alex Gordy (AGordy@eiti.org) and Lyydia Kilpi (LKilpi@eiti.org).
Country Validation

Four countries were assessed to have achieved meaningful progress in implementing the EITI Standard. This includes the Democratic Republic of Congo (DRC), Iraq, Mozambique and Myanmar.

More information can be found here.

3. Improving coordination among the implementing country sub-constituency

The implementing countries present in Addis held a sub-constituency meeting on 16 October. One of the key items on the agenda was how to improve coordination mechanisms between Board members and the implementing countries they represent.

Members of the sub-constituency agreed that there is a need to adopt formal and regular ways of coordinating with each other. Among the options raised during the meeting were organising regional consultations via conference calls before Board meetings, creating smaller online groups to facilitate discussions between Board members and their constituencies, and convening regular meetings for national coordinators. The implementing country sub-constituency agreed to discuss these options further and tasked the International Secretariat with drafting proposals for the sub-constituency to consider. Your inputs to this process would be appreciated. Please expect further communications about this from your country managers in the coming weeks.

4. Beneficial ownership
Country Progress

The requirement to disclose beneficial owners of extractive companies will take effect on 1 January 2020. With this deadline fast approaching, the Secretariat did an assessment of progress towards beneficial ownership reforms in 52 EITI implementing countries, focusing on the legal framework, the methods of data collection and the disclosures of ownership data. Below are the findings from this analysis:

  • Most EITI countries have expressed commitment to ownership transparency: 32 (64%) of the 51 countries made public commitments to disclosure either at the London Summit or at other previous events (46%). A few of these countries (18%) announced commitments again during the last year. In at least seven cases, lack of political commitment to the ownership transparency agenda was identified as a challenge. 
  • Progress made on legal frameworks: The majority of the 51 countries (74%) have already passed or are planning to pass legal reforms. Roughly 41% have the legal framework in place, while one third have plans underway to undertake relevant reforms.
  • Disclosures are done mostly through EITI reporting. Out of the 31 countries that have disclose some data on beneficial ownership, most have done so through EITI reports (74%). Very few have used their web portal for publishing this information (13%), and even fewer have made it publicly available in a physical office (3%).

National secretariats are encouraged to reach out to their country managers to discuss challenges in meeting the 1 January 2020 deadline.

Assessing Beneficial Ownership Requirements

As mentioned in the previous NSC, the EITI Board agreed on a framework for assessing the requirements on beneficial ownership. It was agreed that for Validation occurring between January 2020 and December 2021, implementing countries will be assessed against a set of initial criteria that would allow countries to prioritise their efforts to meet the requirement in the future. This will ensure that even if the requirement is not fully met, Validation can help provide guidance and a way forward to meet the requirement.

Please click this link for further information.

5. Country work plans

Many of you will be working to finalise the EITI work plan for 2020. The Secretariat is planning regional webinars on work plans in late November.
 
To tailor these webinars to your needs and interests, please fill in this short and anonymous survey.
 
Implementing countries are reminded that under the 2019 EITI Standard, MSGs are expected to agree and publish a plan for disclosing contracts with a clear time frame for implementation and addressing any barriers to comprehensive disclosure (Requirement 2.4). These plans should be integrated in work plans covering 2020 onwards. MSGs are further expected to reorient their work plans towards mainstreaming activities as previously agreed by the Board (decision 2018-08/BM-39, recommendation 8).

6. Governance

Good internal governance is important for the smooth functioning of multi-stakeholder groups. Bad practices can pose serious reputational and institutional risks. In 2017, the EITI Board agreed recommendations to help implementing countries mitigate and address these risks. These recommendations concerned the practice of per diems, recommendations concerning national secretariats and their finances, and the EITI Code of conduct. Over the coming months, the Governance and Oversight Committee will follow up with implementing countries to see whether these recommendations are being followed.
 
The International Secretariat has prepared a general presentation to help countries inform EITI Office holders about the EITI Code of Conduct. The presentation is available in English, French, Spanish and Russian. Note that in accordance with the Code of Conduct, national secretariats have an obligation to share and, if necessary, provide training on the Code of Conduct to national EITI office holders.
 
National secretariats should also make stakeholders aware of the EITI’s procedures for voicing concerns and the newly-agreed EITI policy on voicing concerns. The procedures have been significantly improved and made more accessible for stakeholders. If any stakeholders have questions on the procedures or their application, they should feel comfortable asking the International Secretariat for additional guidance.

7. Financial contribution from implementing countries

The EITI International Board agreed, that, from 2017, all implementing countries would be 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 30,000 per country.
 
We acknowledge timely contributions from Armenia, Cameroon, Guyana, Dominican Republic, Ghana, Mauritania and Chad in 2019. A kind reminder is extended to other countries to send their financial contributions by the end of the year. Please contact Shemshat Kasimova (SKasimova@eiti.org) for further queries. 

8. National EITI logos

Following the EITI’s visual identity refresh last May, implementing countries had the opportunity to consult with a design at the Global Conference to update their country logo. You can download the proposed logos and design files here.
 
We encourage all implementing countries to adopt new logos in line with the EITI visual identity. Please get in touch with the EITI International Secretariat (comms-team@eiti.org) should you require support with updating and/or implementing a refreshed logo.

Useful links


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