1. Improving extractive industries governance:Updates from Oil for Developmentand the EITI International Secretariat 5 October 2009
2. Oil for Development’s work on a framework for assessing governance in the petroleum sectorPetter Nore, Director of Oil for Development 5 October 2009
3. Oil for Development’s work on a check-list for petroleum-related governance By Petter Nore, Director
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6. Civil society and media often have a narrow definition which mainly emphasizes transparency
21. Governance failure Pressure/attention Investigative reporting Code/standard Implementation Facilitation Quality assurance Business case for action Negotiation www.eiti.org
22. There is hope Oct 9th 2008 From The Economist print edition Another promising new mechanism is the Extractive Industries Transparency Initiative, a voluntary code that a score of African countries have adopted, with governments and foreign firms accounting openly for their dealings..."
25. Companies Disclose Payments Government Discloses Receipt of Payments Government Spending Independent Verification of Tax & Royalty Payments Award of licenses & contracts Regulation & monitoring of operations Revenue Distribution & Management Implementation of Sustainable Development olicies How the EITI works Oversight by aMulti-Stakeholder Group The EITI provides a Forum for dialogue and a Platform for broader reforms
34. Ellen Johnson SirleafPresident of Liberia “The Liberia EITI is one of the institutional pillars of integrity anchoring and sustaining the reform agenda of Liberia.” “By promoting better management and use of public resources and discouraging corruption, LEITI … is critical to poverty reduction and social development in Liberia.” July 2009, when signing the new LEITI law
35. The EITI has been politically endorsed by many Governments and in many forums
44. More at: ...and video. www.eiti.org Jonas Moberg, Head of the EITI Secretariat Jmoberg@eiti.org
45. Update about Norwegian EITI implementation Gro Anundskås, Assistant Director General, Norwegian Ministry of Petroleum and Energy 5 October 2009
46. Update about Norwegian EITI implementation5.october 2009 Gro Anundskaas, Assistant Director General, Norwegian Ministry of Petroleum and Energy
47. EITI - Norwegian implementation First meeting with an interim MSG 22.10.08 Became a Candidate Country 15. February 2009 Regulation implemented 26.06.09 MSG appointed 26.06.09 Administrator/reconcillator – bidding process. Contract signed with DeLoitte 17.juli 2009. Draft report received today. Draft report will be sent to MSG soon and discussed end October Next step; bidding process to choose Validator
59. EITI- Norwegian implementation Focus on the petroleum sector Disaggregated data/company level Actual payments – (ref State Account tab 3.2); - Ordinary Tax - Special Tax - Area Fee - Environmental taxes (CO2 and NOX) - Net cash flow SDFI
60. Corruption in the petroleum sector. Can the damage to development be reduced? Farouk al-Kasim, President of Petroteam AS 5 October 2009
61. Petroteam a.s REFLECTIONS ON GLOBAL EFFORTS TO ENSURE THAT OIL LEADS TO DEVELOPMENT By Farouk Al-Kasim
62. Petroteam a.s ENERGY CHALLENES IN THE 21st CENTURY Growth has been sustained by easy access to energy. Negative growth means a troubled world. Oil will continue to be important. Before long, oil supplies will fall short of demand. Development of alternative sources must be accelerated. Environmental protection is a serious global challenge. The remaining energy resources will have a higher cost. In any case: Global Good Governance is a pre-requisite. Access to energy is the No.1 geopolitical issue. Will the oil business be strictly commercial? Or will it be more geopolitical?
63. Petroteam a.s PETROLEUM AND THE DEVELOPING COUNTRIES The gap between the “haves” and “have-nots” is widening. Producing countries will be pressurized to accelerate exploration and development to meet rising demands. For most developing countries petroleum is the LAST HOPE for eliminating poverty and securing a better future. But development hinges upon the country’s ability to convert petroleum into lasting benefits to its citizens. This means defeating corruption and the oil curse, i.e. GOOD GOVERNANCE
64. Petroteam a.s GOOD GOVERNANCE STANDS ON 3 LEGS . GOOD GOVERNANCE PUBLIC MONITORING LEGISLATION INSTITUTIONS
65. Petroteam a.s PRE-REQUISITES FOR GOOD GOVERNANCE IN THE PETROLEUM SECTOR: LEGISLATION Aid programmes must fortify the pre-requisites for GOOD GOVERNANCE in the recipient countries. This may take time. Efficient system of government. Fair and reliable system of justice. Consensus (at least broad agreement) on the fundamental aspects of a petroleum policy. Adequate and timely legislation. A Petroleum and Fiscal Laws. Regulations, guidelines, instructions etc. WHAT CAN AID PROGRAMMES ACHIEVE IN THESE FIELDS??
66. Petroteam a.s PRE-REQUISITES FOR GOOD GOVERNANCE IN THE PETROLEUM SECTOR: INSTITUTIONS Clear contractual terms that are subordinate to the legislation. Model Contract(s). Clearly documented processes for decision- making. Government institutions with clearly defined delegation of powers and responsibilities. Accountability throughout the government’s own administration. Effective privateinstitutionswith social responsibility and full accountability.
67. Petroteam a.s PRE-REQUISITES FOR GOOD GOVERNANCE IN THE PETROLEUM SECTOR:PUBLIC MONITORING Effective public monitoring and supervision of petroleum activities. Transparency. Freedom of expression. Active and responsible NGO organisations. Active academia with research capabilities. Active press and media. Effective and timely flow of relevant data.
68. Petroteam a.s THE NECESSARY BALANCE OF INTERESTS COMPANY FOCUSGOVERNMENT FOCUS HIGH EARLY PRODUCTION HIGH RECOVERY PROJECT PROFITABILITY REVENUE. COMPETENCE. EMPLOYMENT. WELFARE PROFIT TO SHAREHOLDERS LONG TERM BENEFIT TO THE PEOPLE OPENNESS FAIRNESS PROFESSIONALISM
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72. Petroteam a.s CONCLUSION OIL FOR DEVELOPMENT IS DEPENDENT UPON PROMOTING GOOD GOVERNANCE
73. Petroteam a.s THANK YOU FOR YOUR ATTENTION Petroteam a.s
OfD provides assistance within three main thematic areasPrinciples of good governance are embedded throughout this assistance
Thesefiveprinciplesare part of acheck-list for assessing petroleum relatedgovernancedeveloped by OfDThecheck-listdrawsheavilyuponworkdone by ChathamHouseonthetopic
Thecheck-list has 5 principles, 33 indicators, and a range of more measurable specific indicators.