Extractives and Beneficial Ownership Data Disclosure (SL0033)

What is the public problem that the commitment will address? Sierra Leone is endowed with rich natural resources contributing up to 67% of total exports. Given that natural resources played a significant role in sustaining conflict during the Sierra Leone Civil War (1991-2002), the transparent management of these resources remains a national priority. The Government of Sierra Leone first announced its intention to join the EITI in June 2006 to promote transparency and accountability in the management of its natural resources. Ever since, SLEITI has made steady progress, producing 10 EITI reports covering the period 2006 to 2019 and achieving the global body’s ‘meaningful progress’ status following its last Validation in 2018. While progress has been made to improve reporting and transparency in the extractive sector, opportunities remain to promote routine disclosure and accountability for i) revenues derived from natural resources extraction and production, ii) the ultimate beneficial owners of companies engaged in extractive projects iii) contracts entered into between government and companies and revenues accrued to subnational entities. Additionally, SLEITI reports contain critical information and data about how the extractives sector is managed, but the reports are not adequately utilized by the public, and their findings and recommendations are often not fully implemented by the relevant government agencies and companies. By implication, these pose several problems including inadequate public engagement in the affairs of the sector, and lack of optimization of the benefits that can accrue to the government and the citizens. To ensure that transparency is an integral and systematic part of extractive sector management, EITI implementing countries including Sierra Leona are increasingly making more information available online through systematic disclosures. Disclosing data at source; through government and corporate databases, online registries, websites, and portals can provide citizens and stakeholders with accessible and up to date information on the sector.

What is the commitment? This commitment is about working together with all relevant agencies and stakeholders to enhance transparency in the extractives sector through a concrete set of systematic disclosures of data related to extractives sector management including the legal frameworks, licenses, contracts, beneficial ownership of companies, exploration, production, and export, and payments by companies and receipts by governments on all transactions across the sector’s value chain. Disclosing EITI data at source through government and corporate databases, online registries, websites and portals can provide citizens and stakeholders with accessible and up to date information on the sector. Like other requirements, beneficial ownership disclosure is a major government commitment to be followed through owing to H.E. President Maada Bio’s pronouncement at the EITI Beneficial Ownership Conference in Dakar in 2018. With this commitment in place, EITI reporting in Sierra Leone becomes simpler, timelier, and more costeffective, in addition to disclosing beneficial owners of corporate entities. It would help stakeholders to shift their focus from collecting data to using data. Extractive sector stakeholders would be better placed to analyze and present findings for public debate and reform. For companies, disclosing data at source would help them to build trust by improving their ‘social license to operate’ and help set the right expectations with communities and citizens in their areas of operation.

How will the commitment contribute to solve the public problem? Evidence suggests that citizenry engagement in transparent and accountable governance have positive impact on social trust, corporate integrity and efficient management of government revenue. This in turn contributes to inclusive economic growth and peaceful societies. Systematic disclosure of extractives sector data will enhance increased public access to and use of information from the sector. When citizens are empowered with information, it is expected that it would lead to increased public debate about how the sector is managed. In addition, a more open extractive sector would create a level playing field and send positive signals to genuine investors about doing business in the Sierra Leone. SLEITI and OGP will work with all relevant agencies to clearly specify information/data that should be routinely disclosed and how best they should be disclosed. SLEITI and OGP will also work to encourage civil society and accountability actors to improve their engagement and use of systematically disclosed data.

Why is this commitment relevant to OGP values? The commitment is targeted at enhancing citizens’ engagement in the extractives sector by increasing access to essential data on extractive sector management. A more transparent extractive industry will help to increase corporate and government accountability, increasing public integrity and trust, ensure effective management of public resources by government and ultimately, create safer communities for the citizens to live and work in.

Additional information

Milestone Activity with a verifiable deliverable Start Date: End Date: Review and update existing Open Data Policy and orient all relevant government agencies towards open data by default 1 st March 2022 29th April 2022 Systematically disclose All oil, gas and mining licenses and contracts in the area of exploration and production, on a publicly accessible government website/portal in both human and machine-readable formats 1 st March 2022 31st March 2024 Develop an appropriate and comprehensive legal framework to mandate beneficial 1 st March 2022 31st March 2024 ownership reporting (by companies) and disclosure (by government and companies) for companies that hold exploration, production and export licenses and publish in publicly in an accessible formats that are human and machine readable All relevant government agencies commence efforts (for example develops appropriate template or policy/legal provisions) to systematically disclose up-to-date information on their operations (e.g. government revenue data, subnational revenues) in the extractives sector 1 st March 2022 31st March 2024 Redrafting and passage of SLEITI Bill into law 1 st March 2022 31st March 2024 Passage of the New Mines and Minerals Development Bill 1 st March 2022 31st March 2022

Action Plan Review

Commitment 4. Open Extractives/BO & Systematic Disclosure of Extractives Data

● Verifiable: Yes

● Does it have an open government lens? Yes

● Potential for results: Substantial

[Sierra Leone Extractives Industries Transparency Initiative (SLEITI), National Advocacy Coalition on Extractives, Natural Resources Governance and Economic Justice Network, Human Rights Defenders Network, Women on Mining and Extractive, Sierra Leone Chamber of Mines, Initiatives for Media Development]

Context and objectives:

This commitment’s objective is to enhance transparency and accountability in extractives resource governance to increase responsible investment, prevent conflict of interest, close channels of corruption, and increase tax revenue and economic development. To do so, it aims to strengthen systematic disclosure of a wide range of information in the oil, gas, and mining sectors, including legal frameworks; licences; contracts; BO of companies; exploration, production, and export; and payments by companies and receipts by governments on all transactions across the sector’s value chain. The commitment aims to promote public debate through data that is accessible, timely, comprehensive, reliable, and comprehensible.

This commitment’s milestones seek to strengthen the legal framework and technical infrastructure to ensure ongoing and comprehensive information disclosure. Regarding legal reforms, activities include updating the Open Data Policy (1), mandating BO disclosure (3), redrafting and passing the SLEITI Bill (5), and passing the New Mines and Minerals Development Bill (6). The government also commits to publishing BO information (3); publishing all oil, gas, and mining licences and contracts in the area of exploration and production on a publicly accessible government portal (2); and disclosing up-to-date information on operations (e.g., government revenue data, sub-national revenues) in the extractives sector across government agencies (4).

Potential for Results: Substantial

This commitment has a substantial potential to improve the public’s access to key extractives sector information to inform participation in government decision-making and to hold the government to account. Disclosure of BO is especially key in addressing corruption risks and aiding in integrity checks and due diligence. ^[31] Already, Sierra Leone has updated its open data policy, adopting a set of principles to guide the release of existing and new datasets under the Extractives Industries Transparency Initiative (EITI), and thus provides a foundation for the access, use, and reuse of data. ^[32] Besides taking an open-by-default approach to the release of further datasets, SLEITI commits itself to systematic disclosure of EITI data, BO disclosure, and contract transparency.

Sierra Leone has a large mining sector, which accounted for 67% of exports in 2019. Sierra Leone is also home to small-scale and artisanal mining in diamonds and gold. Transparent resource management has been a national priority, as the extractives sector played an influential role in the Sierra Leone Civil War (1991–2002). Sierra Leone has been a member of the EITI since 2008. Sierra Leone’s EITI Multi-Stakeholder Group is within the Office of the Vice President. [33]

SLEITI publishes information through the EITI reports to promote accountable and equitable management of natural resources. ^[34] However, the open data policy recognises the need to increase the usability and interoperability of data released under the EITI to create a firmer foundation for individuals, media, civil society, students, and industry to make use of data in making decisions and contributing to public debate. ^[35] Sierra Leone does not have a contract disclosure policy, but the SLEITI Bill includes provisions to promote contract disclosure. [36]

The 2022 SLEITI Validation Report, which looked at data from 2019, found that disclosure of information on contracts and BO in the sector remains limited and the legal frameworks remain in progress. The report also found little evidence that published contract data is used for research and recommended publication in an open data format. The report also noted the importance of transparency around the state’s principal interests in the sector and the implications of the global energy transition. There is also an absence of information on small-scale and artisanal mining and environmental impacts. [37]

The government of Sierra Leone sought to mandate the disclosure of companies’ beneficial owners under the previous action plan. The need to enshrine BO disclosure in law under an amended Companies Act slowed progress. In the interim, the government focused on progress towards the disclose of owners of mining companies, as required under Sierra Leone’s membership in the EITI. [38] SLEITI established a technical working group and a road map ^[39] outlining the institutional and legal framework. ^[40] The 2021 Mines and Minerals Development Act requires the disclosure of any owner with a 5% or greater interest in a company (Milestone 6 of this commitment). [41]

Opportunities, challenges and recommendations during implementation

The SLEITI Multi-Stakeholder Group benefits from refreshed civil society membership in 2020 and high-level political support from the Office of the Vice President. [42] The passage of the Mines and Minerals Development Act has established the legal foundation on which the disclosure of BO data in the mining sector can be pursued. As SLEITI and partners undertake this ambitious package of reforms, the Independent Reporting Mechanism (IRM) recommends the following for consideration:

• Inform the public on the proposed legislative changes in regard to process and content so the public can meaningfully participate in consultations on the drafted bills and amendments.
• Prioritise mandates and sanctions to ensure compliance. Sierra Leone should prioritise passing enabling legislation (Companies Act, Mining Act) with thresholds for disclosure and dissuasive sanctions for non-compliance.
• Make BO transparency a precondition for licencing. The government could use BO disclosure as part of background checks when making licencing decisions. ^[43]
• Communicate the business case for BO disclosure to find private sector partners to advance reforms. [44]

Results Report

Commitment 4. Open Extractives/BO & Systematic Disclosure of Extractives Data

[Sierra Leone Extractive Industries Transparency Initiative (SLEITI), National Advocacy Coalition on Extractives, Natural Resources Governance and Economic Justice Network, Human Rights Defenders Network, Women on Mining and Extractive, Sierra Leone Chamber of Mines, Initiatives for Media Development]

Context and Objectives:

This commitment focused on engaging relevant agencies and stakeholders to enhance transparency and accountability in the extractive sector. It aimed to make EITI reporting simpler, timelier and more cost-effective. It also sought to shift stakeholders (citizens, CSOs, media, companies and investors) from collecting to using extractives data. Finally, the commitment aimed to increase public trust of government and companies as citizens meaningfully engage in extractive sector management. [67]

Before implementation, the IRM evaluated this commitment as having substantial potential for results. [68] Its ambition lies in its objective to strengthen the legal framework and technical infrastructure to ensure ongoing and comprehensive information disclosure. For legal reforms, milestones focused on updating the Open Data Policy, mandating BO disclosure, redrafting and passing the SLEITI Bill, and passing the New Mines and Minerals Development Bill. To publish BO information, reformers ensured milestones focused on publishing all oil, gas, and mining licences and contracts in exploration and production on a publicly accessible government portal and disclosing up-to-date information on operations (e.g. government revenue data, sub-national revenues) in the extractives sector across government agencies.

Opening the extractives sector has been a key area for reform in Sierra Leone. The extractives sector accounted for 67% of Sierra Leone’s exports in 2019. [69] Extractives also played an influential role in the Sierra Leone Civil War (1991–2002). It is worth noting that the country has been a member of EITI since 2008. Opening extractives has featured in all actions plans, including the fifth national action plan 2024–2028. Sierra Leone’s EITI Multi-Stakeholder Group sits within the Office of the Vice President. Despite progress, gaps in extractive governance that this commitment aimed to address an explicit legal requirement for mandated BO disclosure, limited use of disclosed information by citizens and CSOs to push for better extractive governance, and limited routine disclosure of contracts and revenues, especially at subnational levels. [70]

Early Results: Significant Results

This commitment achieved significant progress towards transparency in the extractives sector. Notably, the Parliament of Sierra Leone’s passage of the Mines and Minerals Development Act (2022) now mandates the collection and disclosure of information on the beneficial owners of companies in the extractives sector. Government and civil society partners have begun steps to establish a BO register. The SLEITI Bill was collaboratively drafted and reached the stage of government review before parliamentary consideration. Disclosure of extractive sector licences and contracts also improved through the SLEITI process. This commitment achieved a substantial level of completion during the implementation period and is continued in Sierra Leone’s 2024–2028 Action Plan.

Sierra Leone’s 2022 EITI Validation Report indicates progress made early in the implementation period. Sierra Leone scored an average of 87.5 [71] out of 100 points assessed on the three components of stakeholder engagement, transparency and outcomes. [72] The report highlighted greater engagement across government agencies and CSO involvement in EITI implementation, including broader EITI MSG membership. The report also noted improved disclosure related to subnational payments and transfers. [73]

The SLEITI national coordinator noted that progress in legal reforms and systematic disclosure was a four-year journey requiring engagement of a multiplicity of stakeholders. He stated that there were transitions within government leadership and resistance from private companies, which did and may continue to influence progress. [74] While more is still required to ensure systematic disclosure of all oil, gas and mining licences and to encourage data analysis so far, the progress made demonstrates institutionalisation of BO and open data disclosure.

Strengthening the open extractives legal framework

Sierra Leone has made notable progress in strengthening the legal framework for extractives transparency by updating the Open Data Policy, enacting the Mines and Minerals Development Act, and drafting the SLEITI Bill. Civil society have been highly involved in drafting and providing input on new and amended legislation. [75]

Sierra Leone reviewed and updated the EITI Open Data Policy (milestone 1). The policy set a foundation for the access, use and reuse of data by adopting a set of principles that guide the release of existing and new data sets under EITI. [76] Meetings were held to orient members of the SLEITI MSG towards open data. The first was hosted on 5 August 2021 and attended by key MSG members – representatives from the Office of the Vice President, the Ministry of Mines and Mineral Resources, the Chamber of Mines, CSOs and the Sierra Leone Association of Journalists. These meetings sought to sensitise and build the capacity of MSG members to govern the EITI process effectively and efficiently. [77] As of publication of the 2022 EITI Validation Report, implementation of the Open Data Policy was underway. [78]

The Parliament of Sierra Leone enacted the Mines and Minerals Development Act (2022) [79] in August 2022 (milestone 6). The Act mandates BO reporting by companies and disclosure by government and companies (milestone 3). The Act sets the legal framework for companies to disclose their beneficial owners. It defines a beneficial owner and provides guidance on disclosure. Section 160 mandates companies to report on BO and relevant government agencies and companies to disclose BO information in the extractives sector. The law was developed through consultation with government and nongovernment actors. These include the policy department at the Ministry of Mines and Mineral Development; the National Mineral Agency, which is the regulatory agency; CSOs; citizens through national wider consultations; [80] the Law Office; SLEITI who focused on ensuring the BO was included in the law; Cabinet where the law was tabled, reviewed and approved; and finally, parliament. [81]

Following enactment, the Government of Sierra Leone initiated institutional changes to operationalise the Mines and Minerals Development Act. The Act established a Minerals Advisory Board, which includes civil society representation. [82] There is a Beneficial Ownership Technical Working Group composed of the Bank of Sierra Leone, Financial Intelligence Unit, SLEITI, Ministry of Finance, National Mineral Agency, National Revenue Authority, and National Advocacy Coalition on Extractives. [83] The Finance Intelligence Unit, Bank of Sierra Leone and Sierra Leone Commercial Bank have begun to incorporate BO in their requirements. The National Investment Board will host the BO register once the Board is fully established. Stakeholders agreed that development of the register would require a collaborative approach, including SLEITI, the Financial Intelligence Unit and the Central Bank of Sierra Leone. The SLEITI national coordinator highlighted that the passage of the Act was a significant accomplishment. However, there was a need to urgently enforce it with a regulatory framework. Regulations would help to specify the information the BO register would include where it would be stored, how it would be accessed, clarity on the bare minimums of data required, and sanctions if public and private companies do not comply, among other key decisions. [84] The National Coordination for the National Advocacy Coalition with Extractives stated that the National Ministry of Mines was drafting regulations. [85]

At the same time, government and partners commenced a review of the Companies Act (2009). This review aimed to ensure the Act mandates disclosure of beneficial owners for all oil, gas and mining companies in private and public sectors. [86] The changes also intend to require BO disclosure to register a business. [87] The review was put on hold to allow for the establishment of the National Investment Board, which will host the Business Registration Unit. [88] At the time of writing, the review was in the final stages and was with the Attorney General’s Office. [89] Initial conversations have also identified a need for an overarching BO policy, which will be brought to the attention of the vice president. [90]

Finally, the SLEITI Bill [91] (milestone 5) was drafted by civil society and shared with government and other stakeholders for input, including the EITI International Secretariat. [92] Comments received were incorporated in the draft and reviewed by the MSG on 5 October 2023. At the time of assessment, the next step was submission to the Law Officers Department. [93] Parliament requested the draft bill to ensure alignment with existing laws. [94] The bill aims to address gaps in the Mines and Minerals Act, such as expanding on provisions for BO disclosure to include politically exposed persons and establish penalties for noncompliance. The bill will also establish SLEITI’s enforcement powers around transparency and accountability requirements in the extractives sector. [95]

Systematic and comprehensive information disclosure

SLEITI’s engagement with government agencies in the extractive sector has contributed to progress in information disclosure. Since the 2018 EITI validation, disclosure has improved significantly on laws, licences and contracts. [96] Mining companies regularly report to National Minerals Agency (NMA) production, exports and subnational payment data. However, there is an opportunity for NMA to systematically disclose this information in an open format. SLEITI published data from the 2019 SLEITI report and the SLEITI Summary Data Templates in Excel. [97] To adhere to the EITI Open Data Policy and systematically disclose all oil, gas and mining licences and contracts, the NMA continues to update the online repository first launched in 2012. [98] This data is published directly from the Mining Cadastre Administration System (MCAS) system, [99] which manages all licences.

The NMA registry provides information on start date, licence code, name of owner, type, status of licence, province and asset. At the time of preparing this report, the dashboard provided an overview of total revenue in USD and Sierra Leone; total number of owners, applications and licences; and status of licences. [100] The map provides details and locations on 1,340 active licences, 197 active applications and 26 assets. The NMA provides active and past mining lease agreements on their website. [101] The NMA has met with civil society to provide training on data use and information updates. The Bank of Sierra Leone publishes data on production and export. However, the data is not published regularly. EITI recommends that NMA and the Bank of Sierra Leone collaborate and coordinate towards systematic and proactive disclosure. A representative of NACE reports that the Office of Vice President is spearheading consultations among actors to ensure that the sector’s disclosures are timely and relevant. [102]

During the implementation period, the development of templates and legal provisions for systematic disclosure of up-to-date information of national and subnational revenue in the extractive sector was not started (milestone 4). [103] This gap has contributed to the challenges experienced by SLEITI, CSOs and citizens in accessing information on extractives. Disclosure practices are not institutionalised, leaving regularity, timelines, detail of information and sanctions unclear. As a result, the EITI report often becomes a central source of information rather than a supplement to systemic and timely disclosure by relevant agencies. As the EITI report takes years to produce, the content is often unavailable in time to support informed public participation. SLEITI noted that there is a need for better coordination and collaboration in publishing information between the NMA and Bank of Sierra Leone to ensure consistency in public information on extractives. [104]

The MSG flagged its commitment to continue its engagements with the NMA and Ministry of Mines and Mineral Resources to develop templates and policies that fully disclose up-to-date allocations into the Diamond Area Community Development Fund account and disbursements to chiefdoms and districts. [105]

The SLEITI National Coordinator outlined obstacles to extractives reform, including funding, institutional buy-in and coordination across relevant government agencies. [106] The National Coordinator for NACE added that OGP meetings are often focused on status updates rather than problem-solving. She expressed a desire for OGP Sierra Leone to provide a space to determine how to navigate obstacles and help with advocacy to necessary institutions to drive implementation. This would help to ensure that the OGP process facilitates extractives reform rather than adding work. She added that the Office of the Vice President could convene lead government agencies to encourage higher ownership and implementation. [107]

Looking Ahead:

Notable progress has been made on this commitment to establish legal framework and processes to disclose key extractives data. However, opportunities remain to ensure access to timely and complete data in accessible formats and encourage use of data. This commitment is continued in Sierra Leone’s 2024–2028 Action Plan, focusing on passage of the SLEITI Bill and implementing systematic publication of extractives sector data. [108] Considering this commitment’s continuation, the IRM offers the following recommendations:

• Substantive law and regulatory framework to mandate BO disclosure: The passing of the Mines and Minerals Development Act (2022) presents a solid foundation to mandate BO disclosure. This can be reinforced by finalising the review of the Companies Act (2009), with stakeholders collaboratively developing and passing BO legal framework, and sensitising stakeholders across the country on the importance of the BO register.
• Development of a public BO register and enforcement of companies’ disclosure. Examples from the region include Ghana, [109] Nigeria [110] and Liberia [111] on translating laws into public BO registers.
• Adopt a policy for systematic disclosure: Sierra Leone 2022 Validation Report [112] recommends strengthening systematic disclosure by institutionalising the practice of contract disclosure and BO. This is considered in the National Action Plan V 2024–2028. [113]