Philippine Extractive Industries Transparency Initiative (PH0052)

What is the public problem that the commitment will address?: The PH-EITI commitment aims to help address the “resource curse” or the paradox that countries with abundant natural resources tend to have less economic growth and development outcomes. The Philippines is one such resource-rich country. By promoting and facilitating the disclosure and publication of material information regarding the extractives industries (specially payments and revenues from the mining, oil and gas, and coal sectors) and providing a platform for multistakeholder participation and dialogue thereon, PH-EITI intends to help ensure that the extraction of the country’s natural resources redound to the benefit and sustainable development of the nation. More specifically, PH-EITI seeks to address the following issues in natural resource management, among others: - Need for more transparency and accountability in the extractive industries; - Lack of understanding on how the extractive industries work; - Lack of or conflicting data on the taxes and other amounts paid by extractive companies and collected by the government (both national and local) as well as on the benefits received by communities from extractive activities; - Disputed or unclear sharing of revenues (from natural resource extraction) between the national and local governments; and - Conflict/tension between and among stakeholders.; What is the commitment?: The EITI is an international initiative that promotes a global standard for transparency in extractive industries such as mining, oil and gas, by requiring extractive companies to disclose what they pay to government, and government to publish what they collect from these companies. In 2012, through Executive Order No. (EO) 79, government committed to implement EITI. In 2013, EO 147 instituted PHEITI under DOF and created the Multi-Stakeholder Group (MSG), the body that sets the directions for EITI implementation in the country. In May 2013, the Philippines was admitted as Candidate Country, thence aiming to be declared EITI-compliant by 2017. PH-EITI publishes annual reports and conducts outreach to stakeholders in the sector. Through the EITI process, comprehensive information about the sector are made available, issues are identified, and policy recommendations are formulated and pursued to improve governance of the sector. PH-EITI aims to improve transparency and increase accountability in the extractive industries to improve governance of the sector and management of natural resources in general. Specifically, the five (5) objectives of EITI Implementation in the Philippines are: 1. Show direct and indirect contribution of extractives to the economy (through the EITI process). 2. Improve public understanding of the management of natural resources and availability of data. 3. Strengthen national resource management / strengthen government systems. 4. Create opportunities for dialogue and constructive engagement in natural resource management in order to build trust and reduce conflict among stakeholders. 5. Pursue and strengthen the extractive sector’s contribution to sustainable development.; How will the commitment contribute to solve the public problem?: The EITI process facilitates publication of relevant information on the extractives sector, engenders transparency along the extractive industry value chain, promotes broader public awareness and knowledge of extractive sector governance, fosters civil society’s meaningful participation in such governance, provides a platform for stakeholders’ dialogue, and enables inclusive assessment of existing systems and formulation of policy recommendations to address issues identified.; Why is this commitment relevant to OGP values?: PH-EITI facilitates disclosure and publication of comprehensive information about the extractives sector, thereby promoting transparency and accountability in the sector and in the governance and management of the country’s natural resources as a whole. The regular publication of reports containing independentlyassessed data on payments made by extractive companies and collections/revenues made by the government therefrom give the public access to information that can serve as basis for dialogue between and among stakeholders in the extractives sector and for evidence-based policymaking. The annual PH-EITI report informs the public regarding, among others, the legal and regulatory frameworks for resource extraction in the Philippines, national and local government collection and utilization of revenues from extractives, extractive industries’ contributions to the economy, as well as processes involving Indigenous Peoples. The report also contains MSG recommendations to improve governance of the sector, including the development of policies and tools that make use of available technology and innovation. EITI’s multi-stakeholder approach and the conduct of PH-EITI multi-sectoral outreach activities also provide inclusive platforms for the discussion of issues relevant to the governance of extractives, thereby increasing civic participation.; Additional information: This is in line with Chapter 5 of the Philippine Development Plan 2017-2022 on Ensuring People-Centered, Clean, and Efficient Governance.

8. Improved transparency and increased accountability in the extractive industries

Commitment text from action plan:

“Specifically, the five (5) objectives of EITI Implementation in the Philippines are:

1. Show direct and indirect contribution of extractives to the economy (through the EITI process).
2. Improve public understanding of the management of natural resources and availability of data.
3. Strengthen national resource management / strengthen government systems.
4. Create opportunities for dialogue and constructive engagement in natural resource management in order to build trust and reduce conflict among stakeholders.
5. Pursue and strengthen the extractive sector’s contribution to sustainable development.”

Milestones ^[117]

1. "Timely publication of 4th EITI Report
2. Timely publication of 5th EITI Report
3. Timely publication of 6th EITI Report
4. Philippines to undergo a validation process to be declared an EITI Compliant Country
5. Development of an online reporting system/tool for companies
6. Roll-out of the online reporting tool
7. Enhancement of PH-EITI contracts portal to include maps and EITI data
8. Scoping study on beneficial ownership disclosure
9. Attendance of CSO representatives in the following EITI activities: MSG Meetings, LGU Roadshows and PH-EITI Report Launch
10. Host at least 1 strategic planning session for CSO and IP MSG representatives every year
11. Produce at least 1 CSO assessment of the PH-EITI Report
12. Produce at least 3 research papers on resource governance every year
13. Conduct at least 20 learning sessions (orientation/presentation and capacity building) on transparency and accountability initiatives on resource extraction
14. Facilitate the development/advocate for governance mechanisms/platforms for meaningful engagement of CSOs and IPs in resource management to broaden civic space and empower the marginalized
15. Institutionalization of EITI by law"

Editorial Note: For the complete text of this commitment, please see Philippines’ action plan at https://www.opengovpartnership.org/wp-content/uploads/2018/06/Philippines_-Action-Plan_2017-2019_updated.pdf

Context and Objectives (Commitment Design)

Despite being rich with natural resources capitalized on by corporations, the extractives industry only contributed to 0.85% of the total gross domestic product of the Philippines and USD 722 million to government revenue in 2017. ^[118] This reality, according to the Philippine Extractive Industries Transparency Initiative (PH-EITI), supports a view that the Philippines suffers from “the ‘resource curse’ or the paradox that countries with abundant natural resources tend to have less economic growth and development outcomes.” ^[119] By introducing transparency measures, EITI aims to ensure the country’s natural resources yield appropriate benefits for the country and its people. EITI calls for the disclosure and publication of information regarding the extractives industries. It also focuses on deploying a multistakeholder approach, bringing government, the mining industry, communities, and civil society into a common problem-solving space.

The Philippines has included commitments related to EITI since its second national action plan. The PH-EITI commitment in this cycle was geared toward sustaining and enhancing PH-EITI’s previous gains. ^[120] It sought to sustain the regular reporting of the Philippines to EITI-International and aimed to institutionalize this reporting through a law, facilitate reporting and databasing through the use of digital technologies, build on knowledge and evidence through research and learning exchanges, and take up new themes, for instance, beneficial ownership and indigenous people’s empowerment. ^[121]     

The commitment included a long list of activities and outputs, all of which were verifiable: PH-EITI reports and validation, online tools/ platforms, research studies and learning exchanges, and CSO activities in the PH-EITI and legislation.

If fully implemented as written, this commitment was expected to have moderate potential impact on increasing public access to information and improving opportunities for citizens (particularly indigenous people) to participate in the EITI process. Although the commitment pertained largely to continuing usual reporting activities of PH-EITI, it began to tap into new areas of critical importance for extractive sector transparency, such as beneficial ownership and inclusion of indigenous people.

Though the approach toward beneficial ownership was nascent, the promising element of this commitment lay in formalizing participation of indigenous communities in the EITI national multistakeholder group (MSG) and creating coalitions of civil society and indigenous communities at the local level. However, the scope of these activities was still limited. Milestones only referred to a scoping study on beneficial ownership disclosure (milestone 8) and the creation of Indigenous People’s coalitions in Mindanao and Luzon.

Commitment Implementation

This commitment’s implementation was substantial at the end of the implementation period. EITI’s 4^th and 5^th reports were published (milestones 1 and 2) ^[122] along with research papers (milestone 10). In addition, information tools available to citizens were put online (milestones 5, 6, and 7), and many events to engage civil society and train citizens were carried out (milestones 9 and 13). Of particular relevance to OGP values, the commitment included the publication of a CSO assessment of EITI’s annual reports for the years 2017 and 2018. ^[123] Regarding technology use and innovation, the government elaborated the “Online Reporting System” pilot tool, which makes “reporting of companies and national government agencies more efficient and cost-effective.” ^[124] However, the institutionalization of EITI by law (milestone 15) is pending in Congress.

This commitment led to marginal changes in open government. Many of the activities the government carried out were relevant to access to information and civic participation. Particular advancement was made in regard to transparency of the nation’s extractive industries. Bantay Kita’s, a coalition of civil society organizations, publication of a CSO assessment of PH-EITI (milestone 11) demonstrates how information published by the government could now be leveraged by civil society. The CSO assessment was user-friendly and displayed information relevant to citizens in the territories where mining, oil, and gas extraction took place.

In regard to civic participation, PH-EITI activities included Indigenous Peoples’ participation in extractives governance through IP representation in the multistakeholder group and within the Bantay Kita CSO coalition. IP communities’ members were also invited to LGU Roadshows to hear the latest EITI report findings and raise resource governance concerns. ^[125] However, Congress also did not approve the EITI bill that would have formalized and enhanced implementation of the initiative. Therefore, the commitment mainly served to sustain and marginally improve Philippines’ progress under the EITI. EITI is an already consolidated initiative of the Philippines’ government, with the country being an active member since 2013 and the EITI consistently assessing the country as making satisfactory progress. ^[126]

Next steps

The IRM shared the following recommendations with stakeholders during the prepublication review period for the design section of this report. They are included below for public record. ^[127]

This commitment has been in the PH-OGP national action plan for several cycles. Rather than the long list of milestones included in this commitment, the IRM suggests tightening future commitments by consolidating activities and outputs into milestones and outcomes.

In addition, future commitments could aim to take advantage of the opportunity the OGP platform provides to focus on new frontier themes for PH-EITI like beneficial ownership, coalition building at the local level, and empowerment of indigenous communities. The IRM recommends not including milestones related to the EITI reporting process, which will happen in any case with support of the EITI multistakeholder group.