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Extractive Industries

Transparency and accountability in the extractive industry sector is crucial to mitigating the effects of the “resource curse” in countries endowed with natural resources.

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Overview

More than 50 OGP countries depend on oil, gas and minerals as their most important sources of government and export revenues. However, evidence shows that their performance on human development indicators compares unfavorably to less-endowed countries. At the root of this underperformance is the failure by governments to properly address the institutional and policy challenges that come with the governance of natural resources.

Open government approaches can help detect corruption, safeguard community interests, improve the investment climate, and support environmental sustainability. 

Extractive industry commitments are a common area of activity within OGP and they are more frequently impactful and complete than commitments in other policy areas. According to assessments by OGP’s Independent Reporting Mechanism (IRM), more than one in four extractives commitments have the potential to transform the status quo – double the rate of other commitments.

OGP and the Extractives Industries Transparency Initiative (EITI) work together to promote openness across the extractives sector, including in areas like beneficial ownership transparency, state-owned enterprises, contract transparency, gender and environment. OGP amplified the effectiveness of EITI by adding visibility to EITI commitments echoed in OGP action plans. The paper Seeking Synergy: OGP and EITI provides recommendations on how to leverage both initiatives to make meaningful reforms in extractive governance.


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Bridging the Gap to Protect Environmental Rights

OGP can serve as a space to ensure that efforts to enhance information, participation, and accountability translate into concrete outcomes to address the issues that environmental defenders are facing.

Extractives Indonesia –

Four Ways Beneficial Ownership Transparency Can Benefit the Extractive Industries and Beyond

See how OGP members are making progress on beneficial ownership transparency, a key tool for combating tax evasion and stopping illicit financial flows.


Recommendations

  • Find synergies between Extractive Industries Transparency Initiative (EITI) and OGP: OGP members can improve extractives industries transparency by applying policies like open contracting and beneficial ownership to extractives sector management.
    • In Ghana, reformers have committed to opening up the contract process and publishing information about the beneficial owners of contracts.
    • Armenia is piloting a beneficial ownership registry with national metal mining companies before expanding to all sectors.
  • Require that governments collect and disclose beneficial ownership information: including levels of ownership and any politically exposed people, and link this collection and screening to licensing systems and contract disclosure portals.
    • Nigeria created its first beneficial ownership registry to combat grand corruption, including in the oil industry. The country is also pursuing beneficial ownership through EITI that will require public disclosure of beneficial owners of oil, gas, and mining companies.
    • Ghana committed to opening up the procurement processes, publishing contracts in extractives and providing information on the beneficial owners of contracts.
  • Go beyond the EITI standard in environmental disclosure to consider climate change mitigation and alternative-use analysis. 
    • Georgia committed to publish environmental risks and impacts before and during project planning, consulting with the scientific community and the general public throughout the process.
  • Publicly disclose licenses and publish information on the licensing process.
    • Bulgaria created a public information system to disclose data about extractive resources, including registries of exploration licenses and concessions.
    • Indonesia published data and information regarding oil, gas, and mining activities, including a list of mining business license holders.
  • Publish data on state-owned enterprises (SOEs). 
    • Mexico publishes bidding decisions and contracts entered by the state-owned oil company. 
    • Mongolia requires financial and operational reporting by state-owned enterprises.
  • Ensure Equitable Impacts: Perform gender-responsive analysis in the project planning phase and publish environmental, health, and social impact assessments with gender-differentiated impacts of extractive industries.

Resources

  1. How to Read and Understand Mining Contracts

    This resource from NRGI and EITI highlights strong contract clauses and explore how others could be improved.

    2014, Outbound Link, Web Page

  2. Seeking Synergy: OGP & EITI

    This paper explores how OGP and EITI members can leverage both platforms to make meaningful reforms in the extractives industry,…

    2019, Research Product, Web Page

  3. Oil Contracts: How to Read and Understand Them

    In late October 2012, OpenOil gathered a group of world class oil experts and professionals to jointly write a book…

    2012, Outbound Link, Web Page

  4. Environmental Democracy Index (WRI)

    This is an archived site that was created in 2015 through the research of WRI and its partners to show…

    2015, Outbound Link, Web Page

  5. Closing the Gap: Strengthening the Development and Implementation of Natural Resource Commitments in OGP

    This report focuses on the implementation of natural resource commitments for better development and open government outcomes.

    2019, Document, PDF

  6. Disclosing Contracts in the Natural Resource Sector (English)

    This issue brief is a product of collaboration between the OGP Openness in Natural Resources Working Group and its co-anchors:…

    2017, Document, PDF

  7. Disclosing Environmental Information in the Natural Resource Sector (English)

    This issue brief is a product of collaboration between the OGP Openness in Natural Resources Working Group and its co-anchors:…

    2019, Document, PDF

  8. Disclosing Beneficial Ownership Information in the Natural Resource Sector (English)

    , Outbound Link, Web Page

  9. NRGI Primers: A Series About Resource Governance

    The Natural Resource Governance Institute (NRGI) has created a series of short, illustrated overviews of key topics in their portfolio…

    2015, Outbound Link, Web Page

  10. Guidance Notes on the EITI Standard

    The following guidance notes, standard terms of reference and templates have been issued by the EITI International Secretariat to provide…

    2018, Outbound Link, Web Page

  11. The EITI Standard

    Explore the Extractive Industries Transparency Initiative's (EITI) guide to implementing the EITI Standard.

    , Outbound Link, Web Page

  12. The Open Contracting Data Standard

    The Open Contracting Data Standard (OCDS), is a free, non-proprietary open data standard for public contracting, implemented by over 30…

    , Outbound Link, Web Page

  13. Resource Governance Index (NRGI)

    The 2017 Resource Governance Index, gathered by the Natural Resource Governance Institute (NRGI), measures the quality of governance in the…

    2017, Outbound Link, Web Page

  14. Disclosing Beneficial Ownership Information in the Natural Resource Sector (French)

    This issue brief is a product of collaboration between the OGP Openness in Natural Resources Working Group and its co-anchors:…

    2017, Document, PDF

  15. Transparency International's Accountable Mining Resources

    Transparency International’s Accountable Mining programme is developing a series of ‘maps’ to demystify the licensing process in countries around the…

    2020, Outbound Link, Web Page

  16. Using the EITI Standard to Combat Corruption: Lessons From Transparency International's Mining Research in Five Countries

    The oil, gas and mining sectors are some of the world’s most corruption-prone industries. The renewed focus on combatting corruption…

    2020, Outbound Link, Web Page

  17. Gender and Extractive Governance: Lessons from Existing Legal and Policy Frameworks

    Women and gender minorities often face disproportionate harms from oil, gas and mineral extraction and are likely to access economic…

    2021, Outbound Link, Web Page


Commitments


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