Germany Attains Satisfactory Progress Against EITI Standards

The Extractive Industries Transparency Initiative (EITI) have recognised Germany as having made satisfactory progress across all EITI requirements.

An active advocate and supporter for the EITI internationally, Germany started implementing the EITI in 2016 to demonstrate its own commitment to responsible natural resource governance.

From the outset, Germany’s multi-stakeholder group focused on making the EITI relevant to national priorities, addressing implementation in a federated state, manage a declining mining sector, water use and environmental impacts and aligning reporting standards.

Germany’s 2016 EITI Report covered environmental aspects and subsidies. It explained how environmental impacts are compensated for and how the state can guarantee that the cost of rehabilitating sites does not fall on the taxpayer.

The report also disclosed the amount of water consumed by the extractive sector in each state and described the rules and fees for water usage.

“Germany’s ambitious approach to reporting on environmental management and monitoring provides inspiration to other multi-stakeholder groups that are seeking to understand the impact of oil, gas and mining activities,” said EITI Chair Fredrik Reinfeldt.

The German EITI has also shed light on subsidies received by the extractive sector. Hard coal production in Germany is no longer competitive due to high production costs, and the sector has been subsidised. In 2007, an agreement was reached to phase out subsidies in a socially responsible manner by the end of 2018.

The EITI Report showed that in 2016 subsidies to the coal sector totalled nearly EUR1.3 billion. In the same year, total gross government revenue from the extractive sector was less than EUR500 million.

In related development, the Board also recognised Chad has to have made meaningful progress in implementing the EITI Standards with significant improvements in contract transparency and commodity trading.

Validation, which is the quality assurance of the EITI Standard found that Chad’s performance in implementing EITI requirements has been generally positive but remains uneven.

The Board recognised Chad’s pioneering effort to disclose specific revenue streams including the cost for extracting oil and for transporting it through the Chad-Cameroon pipeline to the export terminal in Kribi.

Significantly, the disclosure by Exxon of so-called “cash-calls” to cover cost by oil field operator provides a fuller picture of the sector’s contribution to the economy. Other field operators could follow Exxon’s lead.

Similarly, EITI Chad discloses and monitors oil backed loans and loan repayments to inform citizens about the State’s debt burden and any impact on the national budget.

EITI reporting on the sale of in-kind revenues has provided detailed information to stakeholders and set a strong precedent for citizen oversight on how resources are managed.

In addition to volumes sold and revenues received, the Chad EITI has reported volume and value of oil sold, as well as the quality of the oil, official selling price, the date of sale and date of payment for each cargo of crude oil belonging to the state.

EITI Chad has also contributed to the public debate for a clear government policy on contract transparency adopted in April 2018. Since then, EITI Chad has regularly published contracts on its website, which is becoming a repository of all publicly available contracts in Chad, ensuring that policy is followed in practice, the EITI Secretariat said in a statement on its website.

However, Validation found that on balance Chad has made progress on ensuring space for civil society but noted growing restrictions of the space for civil society since 2015.

While most incidences are not directly linked to the EITI process, the Board expressed concerns on the potential effects of Ordonnance 23, which if implemented in practice could lead to further restrictions of the civil society protocol.

Will private management of Nigeria's refineries be a success story?

Subscribe To Newsletter

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular

To Top