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UK Delegation @ Global EITI Conference June 2023 - Dakar, Senegal

On the 13-14 June 2023, Senegal hosted the 9th Global EITI conference— the first since the COVID-19 pandemic, and the first ever to be hosted in Africa. 1300 representatives from EITI countries convened in Dakar to mark the 20th anniversary of EITI— an initiative that was founded out of the UK Government and now features 57 implementing nations.

Members of the UK Delegation at the EITI global conference.

At the conference in Dakar, the UK was represented by the UK’s EITI champion, Lord Callanan (Minister for Energy Efficiency and Green Finance); UK government officials: Ladan Mohamed (FCDO); as well as members of the UK EITI Multi-Stakeholder Group (MSG): Kirsty Benham (Critical Minerals Association), Martyn Gordon (Robert Gordon University), Hedi Zaghouani (BDO), David Dicker (BDO), and Tim Vickery (Strategic Communications Advisor).

Members of the UK Delegation & Lord Callanan, UK Minister for Energy Efficiency and Green Finance

Lord Callanan stated in one of the panel sessions: “We agreed that the prudent use of resources should be the bedrock of sustainable growth. Extraction should benefit the countries that extract them. However, as we know, this is not always the case. We need data that creates power. When data tells a story, this is when we shift the world.” The UK was also awarded a special mention at the closing ceremony for its support of the conference’s peer learning day, and was one of only four European countries to attend (alongside Germany, the Netherlands, and Norway). These four countries also represent the only Western and developed countries implementing the EITI; the majority of countries represented are resource-rich developing nations. It was excellent to see developing countries taking the reins and recognising the benefits of transparency and accountability.

The Extractive Industries Transparency Initiative (EITI) is a global standard for the good governance of oil, gas and mineral resources. The EITI Standard was created 10 years ago, and requires companies and governments to disclose information across the extractive industry value chain. The information required includes:

• allocation and registration of licenses and contracts

• information on beneficial owners (those who ultimately own/ control an asset)

• fiscal and legal arrangements

• quantities produced and taxes paid

• allocation of tax revenue and how these contribute to the economy

EITI implementing countries must publish an annual report disclosing this information, and each country goes through quality assurance, otherwise called ‘validation,’ at least every three years. At the conference in Dakar, the updated 2023 EITI Standard was launched. The new standard includes additions around anti-corruption, the energy transition, revenue collection, and gender, social, environmental (ESG) issues. EITI-implementing countries will be assessed against the 2023 Standard from the 1 January 2025. The changes include:

• Anti-corruption

• All reporting countries are expected to publish an anti-corruption policy

• State-owned enterprises are encouraged to disclose the identity of beneficial owners of their agents/ intermediaries/ suppliers/ contractors where feasible

• Energy Transition

• Increasing transparency in fast-tracked license awards

• Increasing understanding about energy transition policies, carbon pricing and subsidies

• Revenue Collection

• More comprehensive reporting on production and exports

• Gender, social, environmental issues

• Disclosing policies related to artisan and small-scale mining

• Promoting greater gender diversity in decision making

The updated changes reflect the current trends and future strategies of extractives in global affairs, recognising, for example, how increasing demand for critical minerals could risk projects being fast-tracked at the expense of implementing best practice ESG.

Over the course of the conference, over 25 Ministers and high-level Government officials spoke to their commitment for EITI. The Rt Hon Helen Clark, former Prime Minister of New Zealand and Chair of the EITI board, presented EITI awards to recipients, and the Rt Hon Tony Blair, former Prime Minister of the United Kingdom, gave a video address. The Rt Hon Tony Blair noted that the extraction of minerals underpins modern life and also that it doesn’t automatically translate into economic growth or sustainable development.

The Prime Minister of Senegal, the Rt Hon. Amadou Ba, opened the conference, welcoming delegates to Dakar and reaffirming Senegal’s commitment to EITI. Senegal is the only implementing country which has an EITI status of ‘very high’ - a huge achievement since the country joined EITI 10 years ago. He noted that we need to move away from a system where those who have more, gain more, and those who have less, keep less. Before joining EITI, Senegal did not have trustworthy, comprehensive, or publicly accessible information around their resources. EITI enabled Senegal to open informed public debate, and now, thanks to the rigour of polished data, civil society in Senegal supports the minerals sector because published figures are verified. The Rt Hon. Amadou Ba was joined by his neighbour, Prime Minister of the Islamic Republic of Mauritania, His Excellence Mohammed Bilal Messoud, showing the high level of commitment countries are showing to the EITI. The Rt Hon. Gwede Mantashe, South Africa’s Minister of Mineral Resources and Energy, called for African nations to come together, united, to conferences like the Global EITI conference.

Suneeta Kaimal, CEO of NRGI & Hon. Diamantino Pedro Azevedo, Minister of Mineral Resources, Oil and Gas, Angola

A consistent theme throughout the conference was the emphasis by developing countries of the need for the energy transition to be considerate of the specific circumstances of their countries. The Gulf States have grown wealthy from exploiting their oil resources, and are now diversifying into critical minerals and extraction for renewable technologies. They are committing huge sums of money into the critical minerals space and host an expansive critical minerals conference in Riyadh each year. Meanwhile, countries like Angola continue to export crude oil and import it back into the country once it is refined, for domestic consumption. Before transitioning away from oil, they aim to tap into their wealth of natural resources to develop their country. However, as Suneeta Kaimal (CEO of New York-based NGO, the Natural Resource Governance Institute) pointed out, the Angolan Government currently collects 85% of oil revenues (more than 85%, the Angolan Minister corrected), yet 50% of the population lives on less than $2 a day. The Angolan Minister responded that things are changing, that Africa is a dynamic continent and movements are not necessarily evident to those who only visit a few times a year. Angola is one of EITI’s newest implementing countries, and the improvements to law and governance that they made in order to meet EITI requirements are important in moving towards the transparency and accountability that will identify how state oil revenues benefit local communities. The Angolan Minister stated that they aspire to be self-sufficient in oil production, and although they wanted a just energy transition, they do not want to see energy poverty in their country become worse as a result of transitioning without implementable strategy.

The situation of Angola is an important one to consider. One of the speakers noted, how can we make sure that resource-rich countries aren’t short-changed in the energy transition? As developed countries rush to secure critical minerals for the low-carbon technologies required for the energy transition, a number of developing countries in Africa and Latin America highlighted their need to increase their income from resources. Resource-rich countries are increasingly uninterested in extracting resources, in order for the value-add processes to be undertaken elsewhere. Indonesia, for example, has recently banned exports of unrefined nickel to encourage the development of domestic processing. Countries like the UK, who are considering which aspects of critical mineral supply chains to invest in, should bear this in mind. If developed countries are determined to develop midstream processing without identifying regional sources of feedstock, there will inevitably be competition with developing countries who aspire to do the same. The Ambassador, Head of Delegation of the EU in Senegal, HE Jean-Marc Pisani stated that the EU wants to help build capacity for value-add within developing countries. Supporting developing countries to build midstream processes and add value to their local natural resources could also encourage these countries to leapfrog the development of an oil and gas processing sector, at a time when the world needs to decarbonise. Countries like Angola will likely be unable to develop processing sectors for both an oil and gas and critical mineral midstream concurrently.

EITI works because of its multistakeholder approach and ability to bring together governments, industry, and civil society for open dialogue. The founder of Transparency International, Peter Eigen, noted how every stakeholder brings a different perspective. Suneeta Kaimal talked about the need to safeguard civic space and broaden the base of EITI participation. She encouraged members to stand up for the integrity of EITI, and for company participation to be held to the same standard as country participation, with consequences for those who aren’t compliant. ICMM’s CEO also noted that the poor actions of a minority are a stain to everyone in the industry, and that complying with local regulations should be the floor and not the ceiling. Another important point raised at the conference was the need to ensure that multinational companies are accountable to everyone, without taking advantage of cross-border loopholes. Countries, particularly where patriarchal cultures are prevalent, should be bringing more women into the discussion. Only 25% of EITI Multi-Stakeholder Groups include women. The conference did an excellent job in highlighting successful women in the sector, including Gabriela Egana, representing the Minister of Mining in Chile, who said: “Listen to the young, and the women. If there are no jobs in a community or a sector, young people lose hope.”

At the session ‘Can there be a win-win for transparent and sustainable resource taxation?,’ the Hon. Judith Suminwa-Tuluka, the DRC’s Minister of State, Minister of Planning opened the discussion with a case study of the DRC’s experience on Sicomines, where major infrastructure projects such as schools, hospitals, and housing were promised by Chinese extractive companies, and over 10 years later, have barely been delivered. A discussion ensued around how to identify and rectify unfair deals, and at what point renegotiation becomes necessary. It is important to consider the different perspectives around bad deals for developing countries. Developing countries which are missing out on important tax revenues from extractive projects thanks to poor negotiations, won’t be able to escape the ‘resource curse’ unless these deals are rectified. However, from the investment perspective, renegotiating deals creates uncertainty and lack of confidence from investors, whose business investments and long-term strategies are at risk when governments move the goalposts.

In response to a question from Zambia around ‘at what point can you identify bad deals negotiated by countries,’ Don Hubert, Founder and President of Resources for Development Consulting raised some clear issues in negotiation processes. Firstly, he noted that countries who had signed bad deals, would often continue to sign bad deals, and asked, ‘who are the people negotiating these contracts, and what is their role in government?’ He shared that often, the people in the room negotiating deals are investment promotion officials, who are focused on offering incentives to secure investment. Whereas there should also be officials who care about revenues and long-term implications represented in the negotiations. Another recommendation Don made was for negotiating teams to ensure they are prepared ahead of negotiations, having models costing out the value of the resources they are selling, and for negotiators to have met before the meeting to agree their stances. Some minerals don’t have reference prices, which means countries struggle to know how much their resources are worth. This makes it all the more important for countries to find and understand this information ahead of negotiations. Other important points raised included making contracts between industry and governments transparent, and the need for accurate disclosure of production data for revenues to be taxed appropriately.

Lawrence Dechambenoit, Global Head of External Affairs at Rio Tinto, noted that: “the world is unequal and moves at different speeds, and that there is a tendency in the West to assume that the speed of the West, for example on areas such as digital transformation, are replicated elsewhere. We need to ensure that these differences don’t exacerbate inequalities. Driving an EV in Paris will be a failure of the energy transition if children in resource-rich countries are still unable to access to clean water.”

The UK delegation has learned a great deal from the conference. A highlight of the event was having dinner with the Rt Hon Helen Clark at a hotel inhabited by famous Senegalese football players. Dakar was extremely hospitable, their modern conference centre proved to be an ideal venue for international delegations, blending preferences by serving coffee and Bissap, a popular purple beverage made from hibiscus flowers and mint. you to the EITI Secretariat for doing an excellent job in organising this conference, and EITI Senegal for hosting this event. Thank you as well to the UK Government’s Foreign, Commonwealth & Development Office & Department for Energy Security & Net Zero for supporting this important initiative, and showcasing the UK’s commitment to promoting EITI for the responsible sourcing of extractives globally. We look forward to the next conference in 2026, and hope that this too will bring the world back to Africa.

Article by Kirsty Benham, Founder, Critical Minerals Association

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