Five Steps to Disclosing Contracts and Licenses in EITI

Issue: Contracts, EITI

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Disclosing contracts and licenses is one of the most important steps that EITI implementing countries can take to promote more effective management of their extractive resources. Contract transparency promotes constructive relationships between citizens, companies and governments, which can reduce conflict and promote stability in the sector. It helps set realistic expectations about the terms of and timelines for extraction, which facilitates accurate government revenue collection and forecasting. The disclosure of contracts also provides enhanced opportunities for stakeholders to monitor adherence to obligations, which encourages all parties to act responsibly in project implementation.

Contract/license disclosure also enhances the utility of other EITI disclosures by providing context that facilitates the analysis and understanding of revenue flows and other data. For example, Section 4.1(e) of the EITI Standard requires the disclosure and, where possible, reconciliation of material social expenditures that are mandated by law or contract. Without contract disclosure, it is difficult to determine whether contractual social payment obligations even exist, let alone accurately collect and reconcile information on them.

The note begins by looking at how an MSG can start discussing contract and license disclosure, followed by how countries can approach defining the scope of disclosure. Next, we cover mechanisms for assembling and verifying documents and establishing public access to this information. Finally, the note outlines options for maximizing public education and outreach. Throughout the note, we base the discussion on lessons learned from the experiences of the growing number of countries that publish their extractive industry contracts and licenses.

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