Joining the Extractive Industries Transparency Initiative "EITI" (TN0021)

Joining the extractive industries transparency initiative "EITI"

1. Join the extractive industries transparency initiative "EITI"

Commitment Text:

This commitment is intended to promote transparency and accountability in the area of natural resources in order to enhance this sector governance and build trust between the government, business and civil society as well as to improve the business environment and make Tunisia a model of transparency in the MENA region.

Milestones:

• Appoint a high-level official to lead the implementation process of the initiative
• Set up a multi-stakeholder group to oversee the initiative implementation
• Develop an action plan to implement the initiative
• Publish a report on extractive industries in accordance with the standards of the initiative and based on the principles of open data
• Make a demand to join the initiative

Responsible institution: Ministry in charge with Energy and Mines

Supporting institution(s): Natural Resources Governance Institute

Start date: June 2016        End date: August 2018

Context and Objectives

Oil and gas exploration and exploitation attracts 60 per cent of the foreign direct investments [1] in Tunisia. Extraction mainly takes place in the interior regions of Tunisia that have lower development, informal economies and high levels of unemployment compared to the coastal areas. While the extractive industry is seen as the only opportunity in the region, it has been historically notorious for its corruption. [2] Individuals closely associated with the former regime of the ousted President Ben Ali were reported abusing the laws and regulations to give exploration permits in exchange for bribes. [3] This discontent was one of the main driving forces of the 2011 revolution. [4] Despite the importance of the sector, to date there is little publicly available information about the profits made by gas exploitation.

In 2015 CSOs created a movement called “Winou el petrole?” (Where is the Oil?) to raise awareness about the lack of transparency in extractive industries in Tunisia. High visibility of the issue led to public protests in the interior regions demanding employment and development opportunities from the extractive sector. The government responded by publishing numbers about received profits on oil and gas, but the credibility of these numbers was questioned by the public. Discontent related to the operation of the extractive sector is a continuous problem, often resulting in blockages of exploitation works, closing the railway and the roads.

Joining the Extractive Industries Transparency Initiative (EITI) could be a major step. The transparency measures demanded by EITI standards, including the publication and independent verification of profits received, could bring more openness and accountability of the extractive sector in Tunisia.

With this commitment the government aims to start the preparatory process for joining the EITI. The commitment contains several concrete milestones for Tunisia to attain EITI candidature status. This commitment is relevant to access to information as it will lead to the disclosure of information on production volumes and finances of Tunisia’s extractive sector. It is also relevant to civic participation as it creates a multi-stakeholder group that could ensure the participation of CSOs in the formulation of EITI policies.

If fully implemented, this commitment could have a moderate potential impact. It will complete the necessary preparatory steps for Tunisia’s application to the EITI as a candidate country. Becoming EITI compliant is a longer process that requires completion of further steps, however, this commitment entails carrying out essential pre-requisite work. According to the National Resource Governance Institute (NRGI), this is a major commitment for the government that could bring transparency to the opaque but critical sector of the country’s economy. [5] It would also send a strong message to other economic sectors.

Completion

The commitment has had limited progress. Out of the five activities, only the first one has been achieved, which is the appointment of the high-level official. Frequent changes of the Minister of Energy and Mines has contributed to the lack of progress on this commitment.

EITI procedures involve the appointment of champions (political actors) and a project coordinator. Tunisia engaged on the EITI commitment in June 2016, when the Minister of Energy and Mines, Mongi Marzouk, and the chairman of the Energy and Natural Resources Committee, Ameur Laarayedh, were designated as champions for the EITI. In August 2016 Marzouk was replaced by Hela Cheikhrouhou and on September 2017, she was replaced by Khaled Kaddour. The project coordinator also changed three times. Since June 2016, three different focal points have led the project.

However, the major roadblock has been the formation of the multi-stakeholder group that is supposed to agree on the action plan and guarantee the voice and participation of civil society. In early 2017, the Tunisian Minister of Energy and Mines appointed the Tunisian Quartet ^[6] as the CSO representative. This was heavily contested by CSOs as they claimed that the quartet does not represent civil society and cited a conflict of interest. Indeed, the head of UTICA (part of the quartet) and multiple other board members are chairs of the holdings that operate in the oil and gas field ^[7]. To resolve this issue, the NRGI facilitated a discussion between major active CSOs and youth-led CSOs and the ministry. The result was the following:

• Elections were expected to be held to elect members that would represent civil society in the committee. The network of Publish What You Pay Tunisia, and I Watch, the Tunisian chapter of Transparency International, would participate in these elections.
• The elections would be supervised by the Tunisian Anti-Corruption Authority.
• A new category of “National Organizations” would be created in the committee to include the quartet.

Although Tunisia has seen a boom in CSO numbers, largely due to the injection of aid money after the revolution, the notion of civil society involvement in decision making is still very recent and CSOs still lack experience and capabilities. Few meaningful civil society groups exist and some classical historical CSOs tend to be polarized, either close to the private sector establishment (as UTICA) or to the administration and government entities (such as UGTT). Therefore, the process of selecting CSOs to the board is sensitive. Selected CSOs need to meet the criteria of representation and technical knowledge while avoiding conflicts of interest.

Next Steps

Joining the EITI is the major commitment of this action plan, and it should be prioritized on the political agenda both by the executive and legislative branches.

The IRM researcher suggests carrying this commitment forward in the next plan with the following recommendations:

• The Ministry of Energy and Mines should maintain a stable focal point to lead the process and ensure continuity
• Elections for the committee should take place for the plan to be carried forward. Ensure there are no conflicts of interest (NGOs members or funders should not be involved or sponsored by oil and gas companies)
• Broaden the base of CSOs to include organizations with anti-corruption profiles, such as I Watch (the chapter of Transparency International in Tunisia), Al Bawsala (a national watchdog of the parliament and government), le Forum Tunisien des Droits Economiques et Sociaux (a national CSO that monitors social movements in Tunisia), and l’Observatoire Tunisien de l’Economie (a national CSO that publishes insights and reports on the Tunisian economy)
• To lead to a major transformation EITI measures need to be supported by a robust legal framework. The current legal framework could be revised to include the following:
  • Publish the data in an open data and exploitable format
  • Ensure stakeholders participating in the extractive industry can be held accountable under Tunisian laws in case of fraud, whether government organizations or exploration and extraction firms

1. Joining the extractive industries transparency initiative "EITI"

Commitment Text:

This commitment is intended to promote transparency and accountability in the area of natural resources in order to enhance this sector governance and build trust between the government, business and civil society as well as to improve the business environment and make Tunisia a model of transparency in the MENA region.

Milestones:

This plan will be prepared to meet the requirements to join EITI initiative by:

• Appointing a high-level official to lead the implementation process of the initiative,
• Setting up a multi-stakeholder group to oversee the initiative implementation,
• Developing an action plan to implement the initiative,
• Publishing a report on extractive industries in accordance with the standards of the initiative and based on the principles of open data,
• Making a demand to join the initiative.

Responsible institution: Ministry in charge with Energy and Mines

Start date: June 2016 End date: August 2018

Editorial Note: This is an abbreviated version of the commitment text. For the full commitment text from the Tunisia National Action Plan, see here.

Commitment Aim:

This commitment aimed to improve governance and transparency in the extractives sector in Tunisia by taking several steps toward joining Extractive Industries Transparency Initiative (EITI). This commitment includes five milestones. The milestones cover the formation of the multi-stakeholder group (MSG), the creation of the action plan for the implementation of the EITI process, the appointment of a government official to lead the EITI implementation process, the publication of one extractive report, and submitting the request for membership to EITI.

Status

Midterm: Limited

Tunisia engaged on the EITI commitment in June 2016, when the Minister of Energy and Mines, Mongi Marzouk, and the chairman of the Energy and Natural Resources Committee, Ameur Laarayedh, were designated as champions for EITI. Since June 2016, three different focal points have led the project. [1]

The second milestone covered the creation of the MSG to oversee the implementation of the initiative. In early 2017, the Tunisian Minister of Energy and Mines appointed the Tunisian Quartet as the CSO representative. This was heavily contested by CSOs as they claimed that the quartet does not represent civil society and cited a conflict of interest. Indeed, the head of UTICA (part of the quartet) and multiple other board members were chairs of the holdings that operate in the oil and gas field. [2]

After the government announced its list of CSOs participants in, the watchdogs and CSOs active in transparency and accountability threatened to withdraw from the initiative. They criticized the government for undermining the commitment principles. ^[3] Following this tension, Natural Resource Governance Institute (NRGI), which supported the government in implementing this commitment, intervened to mediate between CSOs and the Ministry of Energy and Mines.

End of term: Limited

In December 2017, the Tunisian Anti-Corruption Authority (INLUCC) agreed with Tunisia’s Ministry of Energy, Mines and Renewable Energies to work together toward natural resource-related reforms, including Tunisia’s adherence to the EITI. [4] As a result of advocacy efforts by CSOs and NRGI, the government revised its approach toward the establishment of the MSG and subsequently called civil society actors to appoint their selected representatives to the group. [5] Following this call, INLUCC held the election of MSG on 26 May 2018 in its headquarters. [6]

Mourakiboun, an election watchdog, monitored the election process. Five CSO representatives were selected to the MSG. Four organizations were from the Tunisian Coalition of Transparency in Energy and Mines (CTTEM), [7] a 13-member coalition that translates local grassroots demands into national-level advocacy campaigns. The fifth representative came from Tunisian watchdog organization I Watch. ^[8] There are four male representatives and one female.

Manel Ben Achour, an elected member of the MSG, saw this as a major step where the civil society was able to position itself as a major player in this process. [9] She also stated that the CSOs should prepare to provide input to the action plan. [10] Rim Garnaoui, the government representative that attended the elections, highlighted that this was a great blueprint for government/CSO cooperation. [11]

Despite this achievement, by the end of term, the remaining three milestones, including the development of an action plan to implement EITI, the publication of extractive reports, and submitting application to join EITI, had not been not implemented as planned. Therefore, the completion of this commitment remains limited.

Did It Open Government?

Access to Information: Did Not Change

Civic Participation: Marginal

The implementation of this commitment did not change the status of access to information in the extractives sector, since no extractive report was published during this time. Regarding the civic participation, the change in government practice was marginal. As noted in the completion section, at the end of implementation period, the MSG still needed to be completed. So far, the CSOs’ election was successful. According to a blog by NRGI’s Dianna Al-Kaissy, a former Publish What You Pay coordinator for the Middle East and North Africa, the election process was reflective of international best practices. [12] However, how the space works and the quality of the engagement between sectors has yet to be seen. [13]

Carried Forward?

This commitment was carried forward in the next action plan in its entirety.