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1. Reducing Methane Emissions in Senegal’s Hydrocarbons Sector: A Call for Proactive and Transparent Action

Author:
Papa Daouda Diene and Aida Diop
Publication Date:
07-2024
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Senegalese authorities, and oil and gas companies must urgently take preventive measures to mitigate future methane emissions in Senegal’s oil and gas industry. With planned extraction expansions, these emissions could impact climate, public health, the environment and more directly, competitiveness of projects. Senegal currently emits low levels of methane, and there is political will to reduce methane emissions. However, the government should clearly spell out the country’s ambitions in national strategic documents such as the Nationally Determined Contribution (NDC), the Energy Sector Development Policy Letter (LPDSE), and the upcoming long-term low-emission development strategy. Greater transparency and disclosure of disaggregated data are needed to boost the confidence of local stakeholders and improve the evaluation of emission reduction measures. The Extractive Industries Transparency Initiative (EITI), with its multi-stakeholder structure and new 2023 standard, can help the government and compagnies to improve transparency in methane emissions reporting. As officials are drafting the implementing decree for the new environmental code, the government should reinforce regulations with transparency and accountability obligations, such as requiring companies to share their methodologies to improve data accuracy for public decision-makers. The government should also clarify what constitutes “emergency situations”, such as authorized flaring. Senegal must advance its MRV (measuring, reporting, and verification) system with independent audits and standardized estimation methods for reliable data. While MRV is crucial long-term, a practical short-term system is needed to track progress without stifling action. Additionally, the government should enhance its teams' technical skills to efficiently reduce methane emissions in the oil and gas sector. PETROSEN should proactively manage methane emissions in order to strengthen its global position and meet growing expectations in terms of environmental performance. In the short-term, it should sign the Oil & Gas Decarbonization Charter, demonstrating a stronger commitment to methane emissions. Civil society actors and journalists should be better informed and involved in the management of methane emissions. Their active participation can enhance transparency, make companies more accountable, and raise public awareness of the environmental and health impacts of methane emissions.
Topic:
Transparency, Methane, Carbon Emissions, and Hydrocarbons
Political Geography:
Africa and Senegal

2. Scoping Study on Contract Transparency in Mongolia

Author:
Dorjdari Namkhaijantsan and Zoljargal Naranbaatar
Publication Date:
10-2024
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Mongolia’s mining sector plays a crucial role in the economy, contributing to revenue and jobs, but faces significant challenges around governance, corruption and transparency. This scoping study highlights the importance of contract transparency to ensure fair and accountable management of the sector. This report presents the scoping study on Mongolia’s contract transparency, undertaken by the Natural Resource Governance Institute (NRGI). The study was made possible with the support and funding of the Extractive Industries Transparency Initiative (EITI) International Secretariat and the European Bank for Reconstruction and Development (EBRD).
Topic:
Corruption, Governance, Mining, Transparency, and Contracts
Political Geography:
Mongolia, Asia, and Asia-Pacific

3. Scoping Study on Extractive Sector State Owned Enterprise Disclosures in Mongolia

Author:
Dorjdari Namkhaijantsan
Publication Date:
10-2024
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Mongolia’s state-owned mining enterprises are crucial to the economy but face transparency and governance issues. This scoping study examines the need for improved disclosures and stronger accountability in the sector. This report presents the scoping study on the disclosures of Mongolia’s state-owned mining enterprises, conducted by the Natural Resource Governance Institute (NRGI). The study was supported and funded by the Extractive Industries Transparency Initiative (EITI) International Secretariat and the European Bank for Reconstruction and Development (EBRD).
Topic:
Corruption, Governance, Economy, Accountability, Mining, Transparency, Contracts, and State-Owned Enterprises
Political Geography:
Mongolia and Asia

4. Behind the Schemes: Anticorruption Gaps in Mining Sector Certifications

Author:
Susannah Fitzgerald, Robert Pitman, Matthieu Salomon, and Phesheya Nxumalo
Publication Date:
11-2024
Content Type:
Special Report
Institution:
Natural Resource Governance Institute
Abstract:
Decisionmakers are increasingly looking to certification schemes to provide information on the sustainability of mining operations, yet these schemes have significant room for improvement regarding how they address corruption in their standards. The report assesses the content of the performance standards used by the Aluminium Stewardship Initiative (ASI), the International Council on Mining and Metals (ICMM), the Initiative for Responsible Mining Assurance (IRMA), The Copper Mark, and Towards Sustainable Mining (TSM). Schemes address some topics, such as revenue and payments and anticorruption procedures, relatively well; this may reflect the extent to which legislation and regulations address these topics. Schemes’ standards less frequently covered other issues, such as beneficial ownership and allegations of corruption. Many schemes, and the mining companies that use them, are missing an opportunity to assess the implementation of corporate-level anticorruption policies in mine-site assessments. The quality of certification schemes’ governance and assurance processes is essential to their effectiveness, yet many fall short of best practice. This undermines their credibility. Key governance challenges include the unbalanced representation of different interests within schemes and the risk of conflicts of interest in the auditing process. Decisionmakers risk becoming overreliant on certification schemes as indicators of responsible business conduct, which may be facilitated in part by industry influence over policymaking processes. Certification schemes are not a replacement for ongoing, robust due diligence into the environmental, social, and governance impacts of mining operations, including corruption, and the design and enforcement of robust regulatory frameworks. In a shifting standards landscape where there are efforts to both consolidate and review existing certification schemes, and a moment where the risk of corruption is heightened by growing demand for transition minerals, governments, mining companies, and certification schemes themselves must do more to address the topic of corruption. To do so effectively, they should focus their attention on solutions that will have the most impact in addressing this issue.
Topic:
Corruption, Environment, Governance, Accountability, Mining, Transparency, and Minerals
Political Geography:
Global Focus

5. Unfinished Business: Contract Transparency in the Extractive Industries Transparency Initiative

Author:
Robert Pitman and Aubrey Menard
Publication Date:
06-2023
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
How are EITI-implementing countries faring with disclosure of oil, gas and mining contracts? The urgency of climate action and the complexity of the energy transition mean it has never been more important to be able to understand the deals made between companies and governments for oil, gas and minerals. For this reason, since 2021, implementing countries of the Extractive Industries Transparency Initiative (EITI) have been required to disclose the contracts between governments and extractive companies. This briefing by the Natural Resource Governance Institute (NRGI), Oxfam and Publish What You Pay (PWYP) surveys the contract disclosure practice of the 57 EITI-implementing countries to understand the extent of their contract disclosure practice. The briefing highlights trends, areas of insufficient disclosure and best practices. Readers can explore the data on a dedicated visual tool on the #disclosethedeal microsite.
Topic:
Corruption, Natural Resources, Accountability, Transparency, and Extractive Industries
Political Geography:
Global Focus

6. Equitable Sharing of Mining Profits: The Best Deal for Tanzania?

Author:
Thomas Scurfield
Publication Date:
09-2023
Content Type:
Special Report
Institution:
Natural Resource Governance Institute
Abstract:
Tanzania’s unique approach to mining taxation, described as an equitable sharing of economic benefits between government and mining company according to a negotiated split, could leave the country shortchanged. Tanzanian citizens have access to the terms of only one profit-sharing deal, a 50-50 framework agreement for Barrick’s gold mines. The rest remain unpublished, despite laws that require the government to disclose deal terms. The Barrick deal predicates government revenues more heavily on mine profitability than a more typical regime, making these revenues more uncertain. This structure also increases the risk that companies may seek to avoid tax payments. Negotiating the split on a project-by-project basis, without any legal guardrails on the approach, increases the risks of corruption and unfavorable deal terms. The Tanzanian government could eliminate these risks by borrowing provisions from other countries that also require a specific government share of mine profits but take a different approach. However, unless the government has identified benefits from its current sharing mechanism that a more typical regime does not offer, it should not pursue a sharing mechanism and instead focus on improving the underlying regime, such as increasing its flexibility with regards to profits and reducing tax avoidance risks. To gain more trust from citizens, Tanzania’s government should explain how the mechanism works in existing deals.
Topic:
Government, Natural Resources, Tax Systems, Mining, Transparency, Contracts, and Energy Transition
Political Geography:
Africa and Tanzania

7. New Producer Contract Terms and Uncertainty: Lessons From the Recent Past

Author:
Patrick Heller, Perrine Toledano, David Mihalyi, and Tehtena Mebratu-Tsegaye
Publication Date:
03-2022
Content Type:
Special Report
Institution:
Natural Resource Governance Institute
Abstract:
The petroleum industry is volatile, and governments in “new producer” countries have operated at a significant information disadvantage when negotiating with international oil companies. This challenge is growing today; new producer countries face intensifying questions around whether to offer fiscal incentives to maintain investment in the face of 1) the pandemic-induced volatility in oil prices and 2) long-term questions about the future of the industry in the face of the climate crisis and the global energy transition. This confluence of short-term and long-term uncertainty is prompting a reexamination of the narrative that once took hold in many new producer countries. The traditional story was one of linear progression from being non-producers to small levels of production to ultimately having oil and gas become a major economic contributor over the long term. This notion of progression was associated with a commonly held theory: After a country’s first major discovery, the geological risk that wells will be dry was expected to decrease. Countries could therefore shift from a position of having to grant tax breaks (and other concessions) to international investors, to taking a tougher stance in laws and negotiations for new projects going forward. In this paper we examine whether this theory has been borne out in practice and make recommendations to support new producers in their navigation of the uncertainty associated with the energy transition. Among the eight “new producer” countries, for which we analyzed a total of 26 contracts signed before and 25 contracts signed after discovery events (all occurring between 2001 and 2014), the evidence is mixed.
Topic:
Gas, Transparency, Contracts, Monitoring, Energy, and Green Transition
Political Geography:
Global Focus

8. Tying Their Hands? How Petroleum Contract Terms May Limit Governments’ Climate Policy Flexibility

Author:
Nicola Woodroffe
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
The pathway to net-zero emissions will be a fraught one for many petroleum-dependent countries. Radical policy action is necessary to decarbonize the global economy , with significant economic implications for countries dependent on oil and gas revenues. The Intergovernmental Panel on Climate Change has warned that global warming will exceed 1.5 and even 2 degrees Celsius without deep emissions cuts. At the same time, the International Energy Agency has proposed a freeze on new development approvals for oil and gas fields from 2021 if we are to limit the global temperature rise to 1.5 degrees Celsius. Current and emerging producers may want to go beyond merely reacting to foreign governments’ or international oil companies’ evolving climate policies – they may seek to proactively decarbonize and build climate resilience in their own petroleum sectors. Yet the long-term contracts governments sign with companies for petroleum exploration and production may significantly limit this flexibility for decades. Have producer countries begun to modify petroleum contract terms in response to climate change and energy transition risks? To explore this, the author of this briefing reviewed 34 contracts and model contracts from 11 countries, signed or issued since the Paris Agreement. This review focused on stabilization, arbitration, and force majeure clauses. The contracts reviewed do not yet indicate a shift in these clauses to respond to climate change risks, and the need for government flexibility to take climate policy action. Producer governments should reconsider traditional contract clauses and assess and adapt their petroleum sector legal framework to address energy transition and climate change risks.
Topic:
Climate Change, Energy Policy, Government, and Transparency
Political Geography:
Global Focus

9. How and Why the Myanmar Government Should Publish Petroleum and Mining Contracts

Author:
Sebastian Sahla, Hosana Chay, and Robert Pitman
Publication Date:
05-2019
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Contract disclosure is a growing global norm. The Extractive Industries Transparency Initiative (EITI) board agreed to require all member governments to disclose the contracts they sign with oil, gas and mining companies beginning in January 2021. Around the world governments, companies and civil society are increasingly advocating for disclosure. In Myanmar, progress has been extremely slow. Despite civil society activists and several major investors supporting reforms, the government has not disclosed any petroleum or mining contracts so far. With new licenses expected to be issued in the petroleum, minerals and gemstone sectors, the Myanmar government should act now to keep pace with a global trend.
Topic:
Corruption, Natural Resources, Regulation, Negotiation, Legislation, Transparency, and Contracts
Political Geography:
Afghanistan, Mongolia, Asia, Sierra Leone, Mexico, Myanmar, and Cameroon

10. The Case for Publishing Indonesian Mining Agreements

Author:
Robert Pitman and Rani Febrianti
Publication Date:
09-2019
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
The disclosure of contracts and licenses in the extractive industries is a rapidly growing global norm. There are now over 44 countries that have disclosed at least some extractive industry contracts or licenses, and the new EITI Standard makes it a requirement for all implementing countries to publish contracts and licenses that are granted, entered into or amended after 1 January 2021. This reflects a growing recognition among governments, the private sector and civil society organizations that disclosure of these documents helps to improve governance of natural resources and contributes to a more stable investment climate. In Indonesia, long-standing advocacy by civil society has resulted in notable advances. In 2011, a decision by the Central Information Commission declared that mining contracts are open documents and a 2016 decision by the Supreme Court declared that IUP licenses are also open documents. Together with a new EITI requirement for the publication of contracts and licenses, these decisions provide the groundwork for the government of Indonesia to develop disclosure practices that will position the country at the forefront of a global trend. This brief explains why Indonesia should proactively publish these important documents, gives an overview of the documents that it should make public, and suggests a path for making publication a reality.
Topic:
Treaties and Agreements, Mining, and Transparency
Political Geography:
Indonesia and Southeast Asia