Anti-Corruption

OGP members can improve extractive industries transparency by working with local stakeholders to implement the EITI Standard. This global transparency standard for the extractive industries helps national stakeholders understand the benefits and harms caused by extraction, as well as specific risks relating to corruption and the energy transition. Specifically, OGP members can improve extractive industries transparency by applying policies like open contracting, beneficial ownership, open budgets, and public debt to extractive sector management and using open data to train national stakeholders in detection and mitigation of corruption risks.

• Armenia piloted a beneficial ownership registry with national metal mining companies before expanding its scope to all sectors, which OGP’s Independent Reporting Mechanism (IRM) found to have major early results.

Consult members of the public on energy transition strategies, especially affected communities that may rely on extractive industry projects for their livelihoods. Such consultations should align national plans for extractive industries with energy transition plans to ensure that they reinforce each other. Once decided, publish energy transition plans, especially regarding subsidies and other financial incentives, carbon pricing mechanisms, tax expenditures, and other support given to the extractive industries. This requirement is now part of the EITI Standard. For more details, see the “Energy Transition” chapter of the Open Gov Guide.

• As part of energy transition plans, governments can also ensure the disclosure of energy-related data, such as revenue forecasts under different climate change and price scenarios, greenhouse gas emissions, and data on oil, gas, and mineral reserves. Making such information available to the public is essential to better inform their participation in energy plan consultations.
• The Philippines, working with EITI and USAID, developed a tool to capture mining revenue and other financial data, which the government piloted in two provinces to help better inform local communities about how to design energy transition initiatives.

Mandate the disclosure of ultimate beneficial owners of extractive companies in publicly accessible registers, ensuring that information is accurate, up-to-date, and verified to prevent corruption and illicit financial flows. When beneficial ownership information is collected and disclosed, regulators, law enforcement, and civil society actors can assess whether any inappropriate individuals hold licenses or interests, such as politically exposed persons, criminals, or those with conflicts of interest.

• In some countries, such as Nigeria, efforts to do so have started in the extractives sector. The country created its first beneficial ownership registry to combat grand corruption, including in the oil industry.

Require companies and governments to disclose full contracts or license documents that detail the terms under which extraction occurs. These important documents detail all important rules surrounding extractive industry projects, including tax and fiscal terms, environmental and social obligations, worker health and safety, and production commitments. Such reporting should extend to cover all stages of a project, including exploration, exploitation, and drawdown.

• Malawi currently requires the disclosure of all contracts and licenses related to the oil, gas, and mineral sectors and has committed to improving the transparency of these processes in its 2023–2025 OGP action plan and its participation in the Open Gov Challenge.
• In the Democratic Republic of Congo (DRC), the government successfully renegotiated the value of the infrastructure budget from US $3 billion to US $7 billion following the publication of an evaluation report on a deal signed by the DRC government and Chinese investors to develop the Sicomines mining project.

Modernize disclosures on lobbying, political finance, open meeting rules, ethics, and conflicts of interest. Require candidates and public officials to divest ownership stakes in particular stocks or other assets, including major extractive companies, and to move those assets into blind trusts.

• For example, areas of legal or regulatory standards to detect conflicts of interest include requiring the disclosure of extractive companies’ political donations and lobbying activities and establishing “cooling off” periods for individuals moving between government and private sector positions (also known as rules to prevent “revolving doors”).

Require SOEs to publish financial statements, governance structures, and anti-corruption policies, implementing transparency measures that align with internationally recognized standards (including EITI’s Standard) to enhance accountability. This should include agents, contractors, and controlling interests in those SOEs. SOEs should also disclose the rules that govern the financial relationship between the state and the SOE.

• Mongolia committed to passing a new law to increase transparency in the extractive industries, including for state-owned enterprises involved in mining.
• Examples of countries whose SOEs publish audited consolidated financial statements online include Albpetrol (Albania), KazMunayGas (Kazakhstan), and Sonangol (Angola).

Require operating companies (or companies operating along the supply chain) to ensure adherence to legal standards and best practice frameworks to prevent crimes such as child labor, human trafficking, and illegal artisanal operations.

• For example, investors from both private firms and other countries can ensure good practices in supply chain management, including transparency, are followed. This could take the form of adopting auditing standards like that of the Initiative for Responsible Mining Assurance or mandating divestment from extractive companies involved in corruption or environmental damage, as Norway’s Global Pension Fund requires.

Ensure that companies operating in the extractive sector report gender-disaggregated data on employment, health, and safety outcomes, with a focus on reducing gender disparities, promoting workplace safety, and exposing the gender dimensions of extractive industry value chains. Countries and companies should also disclose gender-disaggregated information on the environmental and social impacts of their industries, including assessments, monitoring data, and social expenditures. UN Women found that women tend to be employed in lower-wage positions in the extractive workforce and disproportionately bear the costs of extractive activities, such as increased exposure to harassment and gender-based violence.

• EITI reporting in Senegal “revealed that women make up less than 10 percent of the country’s extractive industries workforce, which has fed into public debate on diversity in the sector.” The collection and publication of this data have helped civil society groups in the country, such as Women in Mining Senegal, use this information to advocate for reforms, such as the inclusion of women in the supply chain and in local extractives sector policies and projects.

Data on revenue and payments should follow open data standards. It should also be geographically and historically complete and include project-level reporting rather than country-wide information. Detailed payment transparency allows anti-corruption actors to ask questions about unusually low or high payments, payments coming from unknown or suspicious actors or at unusual times, or payments routed to a recipient agency where scrutiny is limited or in a manner that violates the law. It also reveals how much money agencies take in, which can be compared with how much they then transmit to the treasury. The EITI Standard provides guidance on disclosing this type of information.

• In Ghana, analysis of revenue from a proposed special-purpose vehicle, Agyapa Royalty Limited, concluded that the proposed terms of the deal undervalued future revenue streams. The government subsequently suspended the deal and has since undertaken further consultation with stakeholders.

Simplify, publish, and harmonize tax and legal frameworks related to extractive industries to ensure compliance and transparency in corporate tax obligations. Such disclosure should include the following. (See EITI Standard 2.1 for more information.)

• Level of fiscal devolution for purposes of licensing and revenue collection
• Relevant laws and regulations
• A description of the different types of contracts and licenses that govern the exploration and exploitation of oil, gas and minerals
• Information on the roles and responsibilities of the relevant government agencies

Publish and explain how and which revenue from the extractive sector is recorded in the national budget. Where they are not recorded, publish information on how and where they are recorded.

Establish transparent systems for the distribution of extractive revenues, ensuring that allocations to local governments or public projects, as well as the decision-making process to determine those allocations, are publicly reported and trackable. Support local governments in using or creating public systems to show expenditure.

• According to Iraqi law, all proceeds from the sale or extraction of petroleum, including government production shares and royalties, must be allocated to the national budget. Iraq’s 2019–2020 EITI Report provides a breakdown of allocations by region. The data is further disaggregated to show the expected versus actual transfers. This information is useful for local communities to understand the revenues their subnational governments receive.

Require regular public reporting on the social, economic, and environmental impacts of extractive activities, including community development and infrastructure projects funded by extractive revenues.

Ensure that environmental impact assessment (including public inputs, especially from interested and affected communities), pollution permits, and data on pollutant releases are made publicly available in a structured and interoperable format.

Introduce mechanisms for independent oversight of revenue collection from extractive industries, ensuring that payments and tax revenues are fully transparent and that data have undergone sufficient quality assurance mechanisms. The mandate of such an oversight body should include the following:

• Mandate the oversight body to publish all reports monitoring compliance in revenue reporting, ensuring that the body is free of interference.
• Establish or strengthen the ability to receive and investigate complaints of legal or ethical violations and to refer those complaints to an appropriate authority.