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Philippines

Extractive Industries' Transparency (PH0032)

Overview

At-a-Glance

Action Plan: Philippines National Action Plan 2015-2017

Action Plan Cycle: 2015

Status: Inactive

Institutions

Lead Institution: Department of Finance, Department of Budget and Management, Department of Environment and Natural Resources - Mines and Geosciences Bureau

Support Institution(s): Department of Energy, Department of the Interior and Local Government, Union of Local Authorities of the Philippines. Chamber of Mines of the Philippines, Petroleum Association of the Philippines, Bantay Kita

Policy Areas

Anti-Corruption, Extractive Industries, Public Participation

IRM Review

IRM Report: Philippines End-of-Term Report 2015-2017, Philippines Mid-Term Progress Report 2015-2017

Starred: No

Early Results: Major Major

Design i

Verifiable: Yes

Relevant to OGP Values: Access to Information , Civic Participation

Potential Impact:

Implementation i

Completion:

Description

The 1st EITI Country Report was published in the EITI website (www.ph-eiti. org) and submitted to the EITI International Board in December 2014 . Further, Executive Order No. 147 was signed in November 2013 creating the Philippine EITI. Preliminary discussions have also been made in Congress and Senate in 2014. Main Objective - Improved transparency and increased accountability in the extractive industry to improve governance of the extractive sector. Sepcifically, the 5 main objectives for EITI implementation in the Philippines are as follows:
 Show direct and indirect contribution of extractives to the economy (through EITI process)
 Improve public understanding of the management of natural resources and availability of data
 Strengthen national resource management / strengthen government systems
 Create opportunities for dialogue and constructive engagement in natural resource management in order to build trust and reduce conflict among stakeholders
 Strengthen business environment and increase investments. The Extractive Industries Transparency Initiative (EITI) is a global Standard to promote open and accountable management of natural resources. It seeks to strengthen government and company systems,inform public debate, and enhance trust among stakeholders. A multi-stakeholder group composed of civil society, business, and government was formed to implement EITI in the Philippines. Through an annual report published by Ph-EITI, revenues collected by government and paid by companies are compared and reconciled to see if they tally. In the process, gaps are identified by the report, and recommendations are forumulated by stakeholders to address scuh gaps. Beyond producing a report and promoting fiscal transparency, PH-EITI aims to improve governnace of the extractive sector by making information accessible and enabling stakeholders to have an evidence-based approach to policy making. The EITI promotes access to information, transparency and accountability in the extractive sector through disclosure and publication of payments made by mining, oil, gas and other extractive companies. The annual EITI report informs the public on how much the extractive industry contributes to the economy, and how the government spends such revenues for the welfare of citizens. EITI’s multi stakeholder approach also provides a platform for discussion of issues relevant to the governance of the extractive sector, thereby increasing civic participation.
Aside from producing information on extractive sector revenues, EITI also promotes transparency across the extractive industry value chain, including information on the licensing process, social development programs at the local level, and processes involving Indigenous Peoples. EITI aims to ensure transparency across the extractive industry value chain and foster civil society’s meaningful participation in the governance of natural resources. The disclosure of information through the EITI process enables the broader public to evaluate the extractive sector by providing a mechanism by which local communities are able to openly scrutinize the collection and spending of revenues collected by the government from the extraction of natural resources. EITI also enables civil society to assess gaps in existing government systems and provide data - driven recommendations to policy makers.

IRM End of Term Status Summary

4. Extractive Industries’ Transparency Initiative

Commitment Text:

The 1st EITI Country Report was published in the EITI website (www.ph-eiti. org) and submitted to the EITI International Board in December 2014. Further, Executive Order No. 147 was signed in November 2013 creating the Philippine EITI. Preliminary discussions have also been made in Congress and Senate in 2014. Main Objective - Improved transparency and increased accountability in the extractive industry to improve governance of the extractive sector. Specifically, the 5 main objectives for EITI implementation in the Philippines are as follows:

· Show direct and indirect contribution of extractives to the economy (through EITI process)

· Improve public understanding of the management of natural resources and availability of data

· Strengthen national resource management / strengthen government systems

· Create opportunities for dialogue and constructive engagement in natural resource management in order to build trust and reduce conflict among stakeholders

· Strengthen business environment and increase investments.

The Extractive Industries Transparency Initiative (EITI) is a global Standard to promote open and accountable management of natural resources. It seeks to strengthen government and company systems, inform public debate, and enhance trust among stakeholders. A multi-stakeholder group composed of civil society, business, and government was formed to implement EITI in the Philippines. Through an annual report published by Ph-EITI, revenues collected by government and paid by companies are compared and reconciled to see if they tally. In the process, gaps are identified by the report, and recommendations are forumulated by stakeholders to address such gaps. Beyond producing a report and promoting fiscal transparency, PH-EITI aims to improve governnace of the extractive sector by making information accessible and enabling stakeholders to have an evidence-based approach to policymaking. The EITI promotes access to information, transparency and accountability in the extractive sector through disclosure and publication of payments made by mining, oil, gas and other extractive companies. The annual EITI report informs the public on how much the extractive industry contributes to the economy, and how the government spends such revenues for the welfare of citizens. EITI’s multi-stakeholder approach also provides a platform for discussion of issues relevant to the governance of the extractive sector, thereby increasing civic participation. Aside from producing information on extractive sector revenues, EITI also promotes transparency across the extractive industry value chain, including information on the licensing process, social development programs at the local level, and processes involving Indigenous Peoples. EITI aims to ensure transparency across the extractive industry value chain and foster civil society’s meaningful participation in the governance of natural resources. The disclosure of information through the EITI process enables the broader public to evaluate the extractive sector by providing a mechanism by which local communities are able to openly scrutinize the collection and spending of revenues collected by the government from the extraction of natural resources. EITI also enables civil society to assess gaps in existing government systems and provide data-driven recommendations to policymakers.

Responsible institution: Department of Finance, Department of Budget and Management, Department of Environment and Natural Resources - Mines and Geosciences Bureau

Supporting institutions: Department of Energy, Department of the Interior and Local Government, Union of Local Authorities of the Philippines. Chamber of Mines of the Philippines, Petroleum Association of the Philippines, Bantay Kita

Start date: 1 January 2015

End date: 31 December 2017

Commitment Aim

This commitment aimed to improve the governance of the extractive sector by participating in the Extractive Industries Transparency Initiative (EITI), a global standard for the open and accountable management of natural resources. This involved convening a multi-stakeholder group composed of civil society, business, and government and submitting annual reports that account for the context and document revenues from extractives.[Note: The Extractive Industries Transparency Initiative (EITI) http://www.eiti.org. ] To achieve this, the Department of Finance (DoF) has listed the following targets:

· Publish the second and third EITI reports;

· Complete the validation process for the Philippines to be declared an EITI-compliant country;

· Adopt and amend policies and legislation to promote transparency in the extractive industries; and

· Build the capacity of stakeholders and increase their awareness EITI.

Bantay Kita, the civil society commitment holder, aimed to achieve the following targets:

· CSO representatives attending all EITI activities,

· Establish a strong and accountable CSO coalition;

· Conduct of local outreach activities;

· Publish EITI financial status; and

· Utilize EITI data.

Status

Midterm: Substantial

At the midterm, substantial progress was made toward completing this commitment. The second country report was submitted to the EITI Secretariat on time; the third report was still pending as of June 2016, though it was not scheduled for delivery until December 2016. The validation process, a major derivable, had not been completed as of June 2016, but the IRM researcher considered this to be on schedule and the Philippines-EITI Secretariat did not anticipate any delays. Key agencies[Note: Aceron, Joy. Philippines Progress Report 2015-2017. Independent Reporting Mechanism-Open Government Partnership. 2017.] had adopted considerable reforms to promote transparency in the extractive industry and all CSO commitments had been substantially or fully completed.

End of term: Complete

All the target deliverables of the commitment have been accomplished. A key pending deliverable, the validation process, was accomplished with the announcement of the Philippines being “the first country to achieve satisfactory progress against the EITI standards.”[Note: PH lone country to meet int'l standards in extractive industries governance. Abs-Cbn News. October 6, 2017. http://news.abs-cbn.com/news/10/06/17/ph-lone-country-to-meet-intl-standards-in-extractive-industries-governance. ] The EITI validation report finds that “the Philippines presents a dynamic case of EITI implementation, with its fast-paced and innovative multi-stakeholder group engaging in strategic discussions linking the EITI to national priorities for the extractive sector. Government, industry and civil society have all used the EITI to address local demands for information and identify areas for reform.”[Note: The Extractive Industries Transparency Initiative Philippines Page https://eiti.org/philippines. ]

Meanwhile, both DoF and the Department of Environment and Natural Resources (DENR) have passed policies advancing transparency in the extractives sector.[Note: PH-OGP End-of-Term Self-Assessment Report. October 9, 2017.] By June 2017, Bantay Kita had conducted 53 capacity building activities and produced 20 reports using EITI data.[Note: Ibid.] Its members represented in the EITI have also regularly attended meetings. Finally, EITI bills are pending in both the Senate and the House of Representatives.[Note: SB 1125 an act providing for the creation of Philippine extractive industries transparency initiative filed by Sen. Joel Villanueva. The bill is pending in the committee (9/7/2016) (source: Philippine Senate) and HB 4116 an act providing for the creation of Philippine extractive industries transparency initiative filed by Rep. Ramon Rocamora. The bill is under referral to the Committee on Natural Resources (2016-11-07) (source: Philippine Congress).]

Did It Open Government?

Access to Information: Major

Civic Participation: Major

There are many issues and challenges surrounding the extraction and use of natural resources, such as corruption, conflict among stakeholders, revenue generation, protection of community rights, and sustainable development. Although participation in EITI is an ongoing commitment, the creation of a functioning and active multi-stakeholder group, the participation of CSOs, and the regular publication of country reports are clear indicators of improved transparency and civic participation in the extractive industry. One of the remarkable accomplishments of Bantay Kita is its Open Data initiative. This engages with communities and advocates by directly matching needed information with available information, secured, and processed by Bantay Kita. This allows more effective engagement of advocates and communities using EITI data[Note: Pimentel, Tina and Marco Zaplan , Bantay Kita. Interview on 18 November 2016 at Bantay Kita Office, Quezon City.].

EITI has significantly contributed to making information on extractive governance open and accessible to civil society. This has been a major step in addressing the many issues around extractives, including its meager contribution (0.75 percent) to the Philippines’ total GDP.[Note: Philippine Extractive Industries Transparency Initiative Report, 2013.] The proposed legislation, improvement of EITI rating, and engagement by civil society all indicate the sustainability of current progress.

Carried Forward?

This commitment has been carried forward in the new national action plan. Included in the deliverables is the timely submission of the EITI reports, the development and roll out of an online reporting tool, as well as a scoping study on beneficial ownership disclosure. Civil society has adopted several deliverables that aim to broaden and deepen their engagement in extractives’ governance, including enhanced participation of indigenous people in resource management and the passage of an EITI law.


Commitments

Open Government Partnership