Brisbane: 6 out of 10

So the Brisbane G20 Summit is over.  It was a fascinating Summit to follow, with discussions on how to grow G20 economies by 2.1%, ebola, climate change (not Mr Abbott’s favourite topic, but with external pressure it was at least mentioned) and Mr Putin leaving the Summit early after frank conversations about the Ukraine.

I was following the Summit to see how G20 leaders responded to Tearfund’s Secret’s Out campaign, which called for action by G20 leaders on corruption – particularly in the extractives sector.  So what actually happened and what was agreed?

www.g20.org/news/photo_gallery

G20 Australia

  • The final G20 Communique was short and sweet.  From a corruption perspective, it included an endorsement of high-level principles on beneficial ownership (ie countries will gather data on who actually owns and controls companies), but G20 leaders failed to include a commitment to make this information available to the public.  So progress, but still room for improvement.
  • The G20 agreed to a new Anti-Corruption Action plan.  The past two Action Plans have been useful in spurring anti-corruption efforts as each country’s progress is monitored and the findings published.  The new Action Plan is therefore welcome as it ensures anti-corruption remains a core G20 topic and will help to galvanise future action.
  • The new Anti-Corruption Action Plan includes extractives as a high risk sector. G20 countries have committed to practical action to mitigate corruption in this sector – including through developing best practice and considering high-level principles, in partnership with business and civil society.  This is a mini-win, as earlier this year we thought extractives could be removed from G20 discussions altogether as it was proving such a controversial issue between G20 members.  Although not in the Communique, the fact that extractives is included in the Anti-Corruption plan means it is now firmly on the agenda for the forthcoming 2 years.  Civil society now needs to influence the best practice and possible high level principles.
  • Budget transparency is given a higher priority in the new Anti-Corruption action plan and is recognised as a particular sector meriting attention.  G20 countries have committed to conduct a self-assessment, outline steps they will take to enhance their efforts, alongside developing a practical G20 toolkit on budget transparency.  Certainly a step forward.

Overall, the Brisbane agreements seem on a par with outcomes in many other multilateral processes.  As civil society we often get some of what we called for, but rarely everything.  We know the UK government were championing many of our concerns but other countries continued to block progress – which can be very frustrating in the run up to a Summit.  Only a few weeks ago we were concerned that extractives would not be mentioned and the G20 would fail to make a single commitment in this area.  So I’m pretty relieved that the G20 took some steps forward.  That’s why I’ve given it a 6 out of 10 for tackling corruption and illicit financial flows.

And that’s why we keep campaigning and putting the pressure on our leaders, because without our efforts we may have made zero progress in Brisbane.  So let’s not stop just because the G20 is over – we must continue advocating so that governments make decisions in the interest of the world’s poorest people.

Brisbane’s trillion dollar question

On the eve of the G20 Melissa Lawson updates campaigners on what we have achieved and what we might see on transparency.

Developing countries lose approximately $1 trillion each year in illicit financial flows – that’s money lost to crime, tax evasion, corruption and other other illicit activity etc.¹ That’s seven times what is spent in international aid and is enough to:

$1 trillion could buy every person in Brisbane and Adelaide a new Rolls Royce. Source: Lukasdesign at http://commons.wikimedia.org/wiki/File:Rolls-Royce_Ghost_Motorshow_Geneva_2010.jpg#globalusage
$1 trillion could buy every person in Brisbane and Adelaide a new Rolls Royce.
Photo: Lukasdesign
  • buy every person in Brisbane and Adelaide a Rolls Royce, or
  • provide basic education for children in low-income countries for the next 17 years,² or
  • contain the ebola crisis at least 1000 times over (based on calculations by the UN Office for Coordination of Humanitarian Affairs).³

But this weekend, some of this might change.  Leaders of the world’s largest economies, making up 75% of global trade will be meeting at the G20 Summit in Brisbane – and we hope will agree actions to curb illicit financial flows.

Tearfund and others round the world have been part of Micah Challenge’s Exposed campaign calling on the G20 to address corruption – particularly through increasing transparency in the extractive sector.  The G20 must keep up the momentum towards transparency and build on the progress achieved at last year’s G8.  This is why Tearfund supporters have sent 25,000 messages to Prime Minister Cameron, urging him to use this his influence to champion anti-corruption issues.

So what are our chances of success?

We understand that the G20 Anti-Corruption Working Group will issue a new Action Plan – something we called for earlier this year.  That’s a very mini-success.  Reportedly, extractive transparency has been discussed within this context and has brought much controversy.

Outside of the G20 discussions there have been other steps towards a global standard for extractive industry transparency.  Canada has made progress on mandatory reporting through tabling legislation, EU member states are transposing the Accounting and Transparency Directives into national law and the Australian Parliament will be discussing the issue.  This harbours well for the closing of the G20 negotiations, but agreements need to be solidified and other key countries such as Brazil and South Africa need to hold public discussions on extractive transparency.

Whether the G20 will collectively agree concrete actions on extractive transparency is still to be seen – we await the publishing of the new G20 Anti-Corruption Action plan at the weekend.

It appears there will be G20 progress on beneficial ownership transparency – although some countries are reportedly blocking agreements.  That said, to tackle corruption we need G20 leaders to agree for registries of beneficial ownership to be available to the public so the likes of Obiang can’t use complicated company structures to hide their wealth.

 

But these transparency mechanisms are amongst a long shopping list of challenges that will be discussed in Brisbane this weekend – from gender, tax, to climate change and I hope, ebola.  Let’s not be naive – international negotiations in a multi-polar world require determination, wrestling and strong leadership from the G20 President. I just hope that Tony Abbott has what it takes to stop some of the trillion dollars disappearing.

 

 

1. Global Financial Integrity Report (December 2013) Illicit Financial Flows from Developing Countries: 2002-2011

2. http://www.unesco.org/new/en/media-services/in-focus-articles/funding-gap-for-education-growing-according-to-new-figures-released-by-unesco-study-also-proposes-ways-to-close-it/

3.  https://docs.unocha.org/sites/dms/CAP/Ebola_outbreak_Sep_2014.pdf

 

One step closer: draft regulations published for oil, gas and mining companies

Advocacy work is certainly a long-haul game – and Tearfund’s work through our Unearth the Truth and Secret’s Out campaign, calling for extractive transparency, is certainly no different!  The EU Accounting and Transparency Directives were passed last year, requiring extractive companies; like oil, gas and mining,  to publish what they pay to foreign governments on a country-by-country and project-by-project basis.  EU countries now have two years to implement these into domestic law.

At the Open Government Partnership Conference last year, the UK committed to implement the Directives ‘faSecret's outst’ (to mine and many others relief!).  After years of campaigning on an issue, the finishing line was in view – with just a few hurdles left.

Yesterday the UK Government published the draft extractive transparency regulations which will be put before Parliament.

At Tearfund, we have been involved in the consultation process.  We have worked with our Publish What You Pay counterparts, made submissions to the department for Business Innovation and Skills, and our campaigners have been meeting with their MPs to call for quick and strong implementation of the EU Directives.  We are now beginning to see the results.

The publication is welcome.  The draft regulations make sure there is project level reporting, without any exemptions – which is required under the EU Accounting Directive.  Under the draft legislation, UK companies will need to publish this information for financial years starting this coming January (2015) and those that fail to report fully, truthfully and accurately will face criminal penalties.  This is a great step forward and a clear demonstration that the UK is living up to its Open Government Partnership commitment.

It is disappointing that the draft regulations include a condition that prosecutions against companies for failure to fully report payments will require the consent of the Secretary of State. This has been a recent addition to the regulations, and needlessly politicises the anti-corruption fight. We are therefore calling for this clause to be dropped from the regulations as they go through parliament.

So the next steps are to ensure these regulations, and equivalent ones for the EU Transparency Directive (covering companies listed on the stock exchange), pass through Parliament and that the final laws are strong.

We must continue to advocate for other countries (particularly G20 members) to adopt similar legislation – so that extractive companies, no matter where they are listed or operate, are required to publish their payments.  And we need to support churches and communities in resource-rich countries to use this information to hold their leaders to account and benefit from the wealth beneath their feet.

We still have a way to go, but it’s an exciting journey.

A G20 stock take

We may be heading into the UK Summer and you are thinking about your (hopefully) sunny holidays, but for a second I’d like you to think about November – because it’s important.

In November G20 countries are meeting in Brisbane, Australia to discuss ‘big global issues’. During the months leading up to this G20 Summit there are numerous negotiations, preliminary discussions and various groups all trying to influence the agenda.

That’s what I’ve been working on over the past few months – trying to make sure that decisions  made by the G20 bring justice for the world’s poorest communities.

As part of Tearfund’s Secret’s Out campaign we have been calling for the G20 to prioritise tackling corruption and enhancing transparency – particularly in the extractive industries, a sector prone to corruption.

Secret's out

A year ago the EU passed legislation requiring oil, gas and mining companies to publish what they pay to foreign governments on a country-by-country and project-by-project basis.  Then at the G8 Canada made a commitment to follow suit and also implement equivalent legislation to the EU and already existent US Dodd-Frank legislation. Now Norway has joined in too and Switzerland is taking strides in the same direction.

Once implemented, this will mean that citizens in resource-rich countries will be able to follow the money and hold their governments to account for how the money is spent – helping to ensure that natural resource revenues are directed towards healthcare and education and not lost to corruption.

But we need this to be truly a global standard, so that all companies are covered and required to make this information public – and this is why November and the G20 are key.  Other G20 countries, such as Australia, Brazil and South Africa have sizeable extractive industries listed on their stock markets and still need to commit to legislation.

So I thought I would do a stock take: how are we getting on at ensuring that the G20 make commitments on extractive transparency?

  • Anti-Corruption is an aspect of Australia’s ‘Building Economic Growth and Resilience’ agenda.  But to be honest it needs to be given a higher priority – for it to be on the political agenda and discussed by the Finance Ministers and not just seen as technocratic issue. Failure to prioritise it risks the G20 agenda having a ‘gaping hole’.  Corruption undermines economic growth by diverting resources away from their intended destination, undermines trust and weakens investor confidence.
  • The current G20 Anti-Corruption Action Plan will come to an end this year and we need a new one to be agreed.  The current plan has been a useful tool that has encouraged countries to make new commitments to tackle corruption and for their progress to be monitored by other G20 governments and civil society.  The G20 Anti-Corruption Working Group are deciding whether or not to issue a new Action Plan – this needs to happen and for G20 countries to include tangible, measurable commitments to transparency in the extractive industries.  For example, to commit to national consultations on the introduction of extractive transparency legislation.
  • The C20 (the civil society forum to engage with the G20) has put ‘Governance’ as one of its top asks of the G20 this year– including calling for progress on natural resource transparency.  So the call for a global standard on extractive transparency is being sent by civil society groups from across the globe.  This is great, but we still need the G20 to listen and respond to these voices.
  • Although we have the Dodd-Frank legislation in the USA, there continues to be a strong anti-lobby by some companies and the API lawsuit has delayed implementation.  We need the SEC to quickly re-issue a strong implementing rule for Section 1504 so that nothing halts the transparency agenda from moving forward.
  • The UK continues to champion extractive transparency, but some countries remain hesitant and risk blocking progress.  Today Prime Minister Cameron published this article in the Wall Street Journal reinforcing his support for extractive transparency.  But we still need Australia, as the G20 President, to take up the leadership mantle and commit to domestic legislation and encourage others to do likewise.

So what next?

Depending on whether you are a ‘glass half-empty’ or ‘glass half-full’ type of person, will no doubt affect how you view the current state of play.  But either way there is a need for us to keep up the pressure and not let our foot slip off the pedal.

And that’s why I’m asking you to think about November now.  Together we need to find creative ways of demonstrating to Australia the importance and the urgency of the issue – for Australian businesses and investors, and for citizens in poor but resource-rich countries.  The months ahead are an opportunity for us to put tackling corruption firmly on the global agenda.  So, will you join me and Tearfund’s Secret’s Out campaign and call on the G20 to prioritise action to tackle corruption?

The Secret We Mustn’t Keep

by Rachel Dickinson

Poverty is no secret. It happens across the world and it robs people of their hope and dignity. But what remains secret are the illicit deals and hidden transactions that deprive poor communities of the money they need to tackle poverty. Tearfund is launching our new Secret’s Out campaign, calling on the Prime Minister to expose the scandal of corruption as we approach the Australian G20 Summit.

In 2010, developing nations lost a staggering £555 billion because of illicit money flows – money stolen through corruption, smuggling, trade mispricing, money laundering and tax evasion. Consistently we hear from the communities that we work with the pervasive and crippling effects of corruption, and unless this everyday reality of corruption is challenged, the poorest communities will remain trapped in poverty.

The good news is that already we’re seeing astounding progress in the fight against corruption. Tearfund’s Unearth the Truth campaign launched in June 2011 set about implementing European transparency laws in the extractive industries. Africa has an astonishing amount of natural resources, whilst being classified as the most economically underdeveloped continent.

Following two years of campaigning by Tearfund staff and supporters, on 12 June 2013, the European Union passed new laws demanding European extractive companies to publish the payments they make for oil, gas and precious minerals in the countries where they operate. The laws apply to all extractive companies registered in Europe and will require disclosure of all payments over 100,000 euros on a project-by-project basis. With this new information available, more communities will be able to see what their government is receiving and hold them to account.

The EU legislation and the similar US Dodd-Frank regulations passed last August, will now cover approximately two thirds of all listed oil, gas and mining companies worldwide. This is a major achievement, but there is still much to be done. G20 countries like Australia, South Africa and Brazil, which are home to large extractive companies, are not yet covered by transparency legislation. That’s why Tearfund’s Secret’s Out campaign is working to ensure G20 countries follow Europe in committing to more extractive industry transparency, so that communities will be able to benefit further from the vast mineral wealth beneath their feet.

And in order to challenge corruption, citizens not only need to see what money is coming into their communities, but keep a check of how their leaders are spending it. Secret’s Out is also calling on G20 nations to agree higher standards of budget transparency, making sure they set the highest standards by providing extensive accessible and understandable budget information.

Giving citizens and churches knowledge about key financial decisions being made in their countries empowers them to get involved in the debate about how revenues are being spent,  whether on schools, hospitals, or other issues that matter to their communities.  Budget monitoring schemes such as the Public Expenditure Tracking (PETS) committee in Mpamantwa village, Tanzania demonstrates how greater budget information is transforming communities – from helping to increase the size of the local school, to ensuring  availability of medicines in the local health clinic.

Thanks to the work of the PETS committee, the local school in Mpamantwa Village has recently been fitted with three new classrooms.

It is our hope that the achievements like those of the PETS committee become not rare case studies but everyday anecdotes. Please join us as we approach the G20 Summit to make sure the illicit transactions that trap people in poverty no longer remain a secret.

http://www.tearfund.org/secretsout

The Open Government Partnership – a success story in how the UK makes policy decisions?

Last week the G8 delivered some real encouragements on transparency – from natural resource transparency, ownership of companies, to an Open Data Charter.

As part of this, the UK is committing to enhance transparency at home as well as abroad – and is a founding member of the Open Government Partnership – an international initiative whereby governments commit to make progress on becoming more ‘open’.  The UK’s draft revised OGP National Action Plan, as published today, outlines how the UK will strive to work towards this agenda.[1]

Ok, so this may not sound particularly ‘sexy’ but it does deserve some thought-time (or at least a blog).  The drafting of this National Action Plan (NAP) has been a test-case in how the UK does open policy-making.  And the content of the draft published today will, for many, be a measure of the success of the process.

So what have the successes been so far?

The process:  Through the action plan drafting process (which involved civil society policy officers meeting weekly with civil servants), there has been greater dialogue between Government and civil society – allowing for both sides to have frank conversations and to better understand the concerns and challenges of the other.  This participation has allowed NGOs to increase the prominence of key issues such as beneficial ownership and extractive industry transparency – key features of the G8 discussions.

The content:  There has been some progress.  The revision has taken the action plan beyond open data to look at open government i.e. not only looking at publishing government data, but ensuring that there is citizen participation that generates accountability, a key thing that civil society has pushed for.  There has been movement on specific areas, for example the draft NAP recognises the need to have strong enforcement of anti-corruption legislation in order to truly have ‘open government’.

And the draft action plan doesn’t avoid some of the difficult areas – such as the UK needing to work with the UK’s Overseas Territories (OT’s) and Crown Dependencies (CDs) to take action on bribery – a previous ‘no-go’ area due to constitutional challenges.  Perhaps particularly interesting in light of the Prime Minister’s successful efforts to get all the UK’s OTs and CDs to sign-up to the multilateral convention on information exchange.

But there have been some challenges.

The drafting process has proved lengthy.  The Government originally intended for the draft to be published in April, but with the high number of Government departments involved and needing to agree the content, it has been delayed until now.

The draft plan omits some essential areas of open government. These need to be addressed and included in the text rather than the ‘civil society-asks annexe’. Specifically, the plan omits commitments to:

–          Strengthen OGP’s eligibility criteria on budget transparency.  Budget transparency is a fundamental part of open government – without extensive, accessible and understandable budget information citizens are unable to hold leaders to account for public expenditure.  Although the UK has made an individual commitment to this area, as current Co-Chair, the UK should prioritise strengthening OGP’s budget transparency eligibility and reporting requirements.  This should be discussed and agreed at the OGP steering group meeting in July, and included as a UK commitment.

–          An anti-corruption strategy or plan.  There have been positive steps with the UK beginning to bring greater coordination to its anti-corruption efforts.  But efforts need to be crystallised and a transparent action plan put in place so that UK citizens know what actions the Government is taking to tackle corruption at home and abroad.

–          Strengthen international accountability initiatives.  Information is useful in so much that it leads to accountability (by citizens, parliament and civil society) and the UK should not shy away from supporting initiatives that build this capacity internationally e.g. Making All Voices Count.

The OGP open policy making process is fascinating in the light of the resurgence of concerns about lobbying. Whilst there is the desire on both sides to engage the public directly in policymaking, it is clear that engaging intelligently is much easier for those who have time and expertise through private, not-for-profit and charitable employment.

The real test of OGP national action plans and this open policy making pilot will be what happens next.  Will NGO’s continue to engage in this process or will they think that the government has been unresponsive?  Will ‘ordinary people’ participate directly in the public consultation (ongoing until 19th September), not just through supporting NGO policy officers to invest time? Ultimately, will policy reflect the will of the people, or the will of the politicians?

A success story?  We will have to wait and see.

Image Photo: gov.uk


[1] Draft, because this is for wider consultation before the final plan is launched in the Autumn, revised, as the first action plan was published in 2010.

Transparent industry can make a real difference to fight poverty

On the day the EU voted in favour of extractive industry transparency laws, Tearfund has a guest post by Bishop Stephen Munga.  Bishop Munga is a member of the working group of the Tanzania Extractive Industries Transparency Initiative and chair of the interfaith standing committee of Tanzania. He travelled to the EU with Tearfund as part of its Unearth the Truth campaign

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Africa has vast riches, whilst being classified as the most economically underdeveloped continent. It astonishes me that with mineral wealth, quite literally splitting at the seams, it still fails to deliver even the basic services for the poorest people. On the surface it makes no sense at all.

I see this as a chronic injustice and one that I’ve lobbied hard to change.

It’s hard to tell where Africa’s wealth goes when there’s a lack of accountability and public scrutiny – and corruption is shrouded in secrecy. That’s why the best way of tackling it is to maximise transparency.

This week the EU voted for laws which will mean revenues collected from mining operations may soon help to benefit the poorest communities. Companies will be required to publish meaningful information about their projects, often directly affecting people who often have little or no access to basic services, which will help them to call their government officials to account for the revenues coming into their community.

For decades minerals, oil and gas have been extracted from beneath the homes of some of Africa’s poorest people. Corruption associated with this industry has resulted in massive economic losses, with human costs in terms of livelihoods lost and poverty increased. Are we at long last redressing the balance?

My country, Tanzania, is ranked among the three poorest countries despite being rich in platinum, gold and phosphate. I meet families in the dioceses I frequently visit who have limited access to the basic essentials we take for granted, such as clean water, a local health centre and adequate education for their children. For too long they have put up with indifference and excuses from officials; worst still, intimidation and marginalization when forced from their homes and land.

It doesn’t stop at mining operations. We currently have an explosive case in Mtwara surrounding the gas sector; the people rioting and property destroyed. They think the government has embarked on the new gas investment behind their backs and they want to make sure that they benefit from the deal with compensation for land and better service provision.

You might say that providing public services and tackling poverty isn’t the business of corporations. Directly it isn’t. But if regulation enforces publishing the accounts of operations, then surely all that transparency can lead to is no more than what a responsible company should welcome.

And it needn’t be seen as too radical for the people of Tanzania to benefit from Tanzania’s natural resources.

Africa needs economic growth. We need employment. We need innovation to improve how industry operates. But sustainable exploration is one conversation; systematic exploitation is a different thing altogether.

In 2010 exports of oil, minerals and gas to Africa were nearly seven times what the continent received in international aid[1].

Funds made available, from what are massive profits and corporation taxes, are crucial in the fight against poverty. They can improve the lives of the poorest people in Africa and around the world and reduce the reliance on development aid.

A year ago in Brussels I heard for myself from permanent representatives, civil society groups and the MEPs who fought for many months for the legislation on behalf of the European Parliament. In addition, tens of thousands of supporters backed Tearfund’s Unearth the Truth campaign.

Together their efforts have paid off, and I thank them. But let’s not be in any doubt that this is just one major river crossed.

I am part of the Tanzanian branch of the international Extractive Industries Transparency Initiative (EITI). The scheme requires companies to report their payments to the government, which must in turn report its receipts. So I am pleased that the UK has now signed up to this initiative, showing continued leadership on transparency issues.

However, the initiative is voluntary, and so far only 37 governments have signed up. It leaves dozens of countries – rich in natural resources – with no publicly available information.

The EU legislation and the similar US Dodd-Frank regulations, passed last August, will now cover approximately two thirds of all listed oil, gas and mining companies worldwide. But it leaves the door open for industry to exploit resource-rich countries that are not bound by it.

David Cameron and his business ministers have showed strong commitment to the Brussels negotiations. He has put transparency at the top of the G8 agenda for next week’s Summit in Northern Ireland. With Canada making an announcement today that it too will pass similar laws, this is an opportunity for Japan and Russia to commit to passing their own legislation – and to encourage the major economies of Brazil, India, China and South Africa to do the same. Society globally must work together to confront corruption and poverty.

With more information available we improve the quality of public debate. Society as a whole will be able to convince government to enter business deals with companies as credible partners – prepared to go the extra mile to increase transparency and ultimately reduce poverty.

The EU vote shows Africa and the world that it will tackle exploitation and injustice. This legislation must now be fully implemented by EU nations without delay or loophole. People have waited far too long for the benefits that must now follow.


[1] OECD, (2011), Development at a Glance. ODA to Africa, p2 and WTO, (2011), International Trade Statistics, Merchandise trade by product, Table II.23

Transparency is on the move – the revised EITI standard

This week the EITI biennial conference is being held in Sydney – an opportunity for extractives companies, governments and civil society to strengthen their efforts to enhance transparency and tackle the ‘resource curse’.

Currently it feels like each day we are taking steps towards transparency –  on Tuesday the French and British development Ministers called for transparency to become the norm rather than the exception, and only yesterday Prime Minister David Cameron and President Hollande announced that the UK and France will be joining the EITI.

For those involved in the EITI, this week is momentousThe revised EITI standard, as being agreed in Sydney, will be implemented in the 39 member countries.  ‘The revised standard encourages more relevant, reliable and usable information, as well as better linkages to wider reforms’.

Tearfund has been calling for these changes, drawing upon the findings from our research in Peru.  The Peru case (see previous blog) shows that these revisions are essential in order to make EITI information useful to communities.  In particular:

  • Project-by-project reporting:  The research found that this is critical in order that communities have information that is relevant for their lives – this revision is therefore supported.
  • Contract transparency:  The research in Peru highlighted that the main other demand from communities is to know the terms and conditions of contracts – with concerns that many of the contracts have not been negotiated in the interests of the country but the result of underhand political deals.  Therefore the ‘encouragement’ on contract transparency is welcome, but doesn’t go far enough.
  • Presenting the contextIn Peru, the lack of contextual analysis and lack of links with other initiatives severely undermines the potential impact of the EITI reports.  The revision is therefore crucial, but in time must go further so that EITI reports also link to other kinds of information in order for the full picture to be seen (e.g. on local government budgets and environmental laws).
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Women in vinchos community. Credit Graham Gordon

But the EITI itself isn’t enough – voluntary initiatives can only go so far.  The UK has been actively involved in working through the European legislation which complements the US Dodd-Frank law, meaning these laws cover about two-thirds of the world’s oil, gas and mining companies.  But we need a global mandatory reporting standard for extractive industries.

The movement in the direction of transparency can’t be allowed to stall.   The G8 this year provides a perfect opportunity to continue to build on the progress made.  G8 countries need to commit to a global mandatory reporting standard for extractive firms – and to implement the necessary domestic legislation.

The Prime Minister has outlined that this will be on the agenda of the G8.  But the question remains to be seen whether the G8 outcomes are ambitious and whether other G8 countries agree to a global reporting standard.

Our work is far from done.  We need to keep moving forward in order to make a difference to the millions of people living in resource-rich countries, but who live in abject poverty.

On the winning team

Today made me think that perhaps we’re on the winning team after all – on the ‘cusp of a wave’ of transparency.  As an advocate, when you see a world leader call for action on an issue that you are passionate about, it does give you hope.

Kofi Annan today urged the world to ‘stop the plunder’ of Africa’s natural resources.  Watch this video of Kofi Annan speaking to find out why this is crucial – and why the G8 and G20 need to take action.

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Kofi Annan
Africa Progress Panel
http://www.africaprogresspanel.org/

There is reason for optimism.  The forthcoming EU legislation, expected next month, would be a real success.  The US Dodd-Frank legislation and the forthcoming EU law would mean that approximately two-thirds of the world’s oil, gas and mining firms would be required to publish the payments they make on a project-by-project basis, enabling citizens from resource-rich countries to hold their leaders to account for its expenditure.

But we need the world to work together on this.  We need companies to be the most transparent they can be – to publish payments and contracts.   We need Governments to publish budgets – including revenues and expenditures, so that citizens can see where the money is spent.   But we also need civil society and citizens to ‘follow the money’, to ensure that it is used well – on hospitals, schools and roads.  Tearfund’s experience in Tanzania shows that tracking the use of budgets at this local level, can, and does make a difference.

Perhaps if there has ever been a case for us to ‘all be in this together’ it is for this – to stop the scourge of corruption and to ensure that revenues from natural resources aren’t wasted.

As Kofi Annan highlighted, the G8 next month is a great opportunity to continue in the direction of transparency.  G8 leaders need to commit to:

–          A global standard on transparency in the extractives sector – to commit to implement domestic legislation requiring extractive companies to publish what they pay to foreign governments.

–          Support civil society groups and infomediaries (such as parliaments, audit institutions, the media and civil society organisations) to interpret and use the data, in order that there is greater accountability

–           Reach the highest standards of budget transparency, to join the Open Government Partnership and to support other countries to publish budgets in a usable and understandable way.

Transparency throughout the natural resource process – from contracts, payments, revenues to budget expenditure, could enable the truth about corruption to finally be unearthed.

Parliamentarians and corruption – the problem or the solution?

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Tearfund partners EFZ with APNAC Zambia Chair, Hon. Cornelius Mweetwa MP

This week the Global Organisation of Parliamentarians Against Corruption (GOPAC) 5th conference has been taking place in Manila.  But is this just another conference where we meet, talk and then return home with little change?  Should Parliamentarians even be included in the anti-corruption movement when they are often the worst offending corruptors? 

Parliamentarians can be a force for change.  But I also know that they are too often key contributors.  Research conducted on the Zambian Constituency Development Fund (CDF) by Tearfund and our partner the Evangelical Fellowship of Zambia (EFZ) has demonstrated this. Where Parliamentarians and others in the CDF process failed to exercise transparency and community participation then CDF projects were often found incomplete, unused, or susceptible to allegations of the misuse of funds.

CDFs are present in at least 23 countries and have the one defining feature that the Parliamentarian has some control over the use of the fund in their constituency.  In Zambia, constituencies receive approximately $200,000 per annum which is intended for local development.  The MP sits on, and appoints, the majority of the CDF committee who control the use of the fund – quite shocking from a UK perspective (and takes the expenses scandal to a new level!). 

Despite the challenges and allegations, in Zambia the CDF is a widely popular fund.  Perhaps because it is a more ‘visible’ form of development and decentralisation policy.  For example the CDF has been used to construct school buildings, clinics and market shelters. 

But Parliamentarians can take certain actions to enhance the effectiveness of this fund.  In the case of one constituency, Choma, the CDF enabled a prison clinic to be extended in order to provide services for the surrounding community.  The research indicated that the community were satisfied with the project and the clinic remains well used.  In this example, transparency and participation were seen throughout the CDF process, in particular:

i) Participation in identifying projects: the community identified the project as an area of need and therefore applied for CDF funding.  
ii) Transparency in decision-making process: the CDF committee made public its reasoning for funding the project on local notice boards and the community radio stations.
iii) Community involvement in project implementation: community members contributed labour and materials.
iv) Transparency in procurement: materials were sourced by suppliers recommended by the local community.  At the clinic, the CDF committee kept a log book of all suppliers and materials delivered, which local people were free to check.
v) Transparency and participation in monitoring: progress reports were posted in public places and feedback was sought from the community at public meetings.

 

So what can we learn, and what actions can Parliamentarians do to ensure better use of local development funds?  At the GOPAC conference EFZ and Tearfund presented the need for Parliamentarians to:

  • Enhance transparency, ensuring that information is useful and understandable at the local level. 
  • Promote meaningful community participation throughout the process, from the decision making to the monitoring of projects.
  • Reduce the level of influence that the Parliamentarians have over decisions on the use of CDFs.

These aspects may not be the panacea – but the research indicates that they can make a difference to the outcome of local development projects.  So it is great that in the closing ceremony the African Parliamentarian Network Against Corruption (APNAC) noted their intention to work to reform CDF practices.   So let’s continue to call on Parliamentarians to model best practice and urge them to become key partners in the fight against corruption.