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How to Strengthen Transparency in Extractive Sector Governance? Ask Trinidad and Tobago

 

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Trinidad and Tobago reached a milestone in promoting transparency and improving the governance of its extractive sector. On January 23rd 2015, the country achieved full compliance with the Extractive Industries Transparency Initiative (EITI) requirements. The official announcement highlights the country’s progress in adapting an international standard to a national context and reality. It also signals the success of numerous committed individuals: policy entrepreneurs, industry champions, and civil society supporters to improve governance of T&Ts extractive industry.

How did they do it? What can we learn from the process?

Established in 2003, the EITI is a global coalition of governments, industry, and civil society that seeks to promote transparency and accountability. EITI compliant countries must publicly disclose payments that extractive companies make to governments, reconciled with the government’s declared receipts. The standard contributes to openness and efficient management by providing information about discrepancies in reported payments. This information helps citizens understand where money is going, and if it is missing, to understand the reason why. With information, Trinidadians can question the amount of money the government receives from extractive industries, debate how it is being used and discuss what the sector holds for the future of Trinidad and Tobago. EITI can engender public trust in the governance of a country’s natural resources.

Adopting the EITI standard was important for Trinidad and Tobago because the extractive sector is a pillar of its economy, and governance inefficiencies can severely impact its performance. The country has a long history of working in the oil and gas sector. Commercial oil production began in the 1910 and, since the sixties, it has also developed in the downstream tranche. Although it has less than 1% of the world’s oil and natural gas reserves, the country has managed to become one of the world’s most effective hydrocarbon monetization locations.

Committing to Transparency

Trinidad and Tobago was among the first countries in the world to affirm its commitment to the EITI. In 2003, it was part of a pilot group of implementing countries. However, by 2007, Trinidad and Tobago had still not fulfilled the sign-up requirements for EITI membership. In September 2010, the country reaffirmed its intentions to adopt the standard; the government appointed a multi-stakeholder steering committee, comprised of government, industry, and civil society representatives. Led by Victor Hart, its chairman, the committee prepared the country’s candidacy to the EITI, and it was accepted in March 2011.

With the support of the Inter-American Development Bank, the steering committee investigated confidentiality provisions in its legislation, which seemingly made it illegal to publicly disclose information about payments in the extractive sector and to implement the EITI. Armed with a more detailed understanding of the legal challenges, the steering committee brokered the signature of information-sharing agreements with industry and requested that the nation’s attorney general reinterpret the law. In two landmark opinions delivered in May and August of 2013, the attorney general officially paved the way for the public release of extractive sector payment information. Trinidad and Tobago was able to publish its first EITI report in September 2013, and a year later, its second report. The preparation of its third EITI report is currently underway, but the global community already recognizes the efforts of Trinidad and Tobago in promoting transparency in the governance of its natural resource revenues.

Collaboration for Reform

Implementing the EITI would have been impossible without constructive collaboration from government, industry, and civil society. It reflects the tireless efforts of policy champions and the work of individuals with the vision, ingenuity and courage needed to bridge differences and create positive and long-lasting reforms. How could reforms related to transparency help your country? Share your stories here.

You may find additional information on the efforts of Trinidad and Tobago, and other experiences promoting transparency in the extractive sector in a recent IDB publication, Governance in an Age of Abundance: Experiences from the Extractive Industries in Latin America and the Caribbean, co-edited by Malaika Masson and Juan Cruz Vieyra.

 

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