EITI IMPLEMENTATION IN UGANDA

Godber Tumushabe Executive Director Advocates Coalition for Development and Environment (ACODE)

Outline of Presentation
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Purpose of EITI Key features of EITI EITI- Operational aspects African countries in EITI EITI and governance EITI in Uganda What needs to be done to create a winning minerals sector.

Purpose of EITI- Addressing Abuses

The fundamental purpose of EITI is to confront abuses of resource wealth in countries rich in oil, gas, and minerals- the “resource curse”.

Johannesburg 2002 (WSSD) – the idea is born. 2003 – EITI principles are adopted with a pledge to harness resources wealth as an engine of growth and development Calls to improve transparency and accountability through proper resource management. 2005 – EITI Criteria setting out the requirements for successful implementation.

Key Features of EITI –Traditional International Development Jargon

Country ownership: access to the “club” is voluntary Involvement of a variety of stakeholders – cross purposes but mutual interests (governments, industry, donors, civil society, citizens’ organizations). Mandatory disclosure of company payments and government receipts. The dissemination of EITI Reports is expected to be widespread. An in-built system of ndependent validation of EITI compliance EITI among international standards and codes; endorsed by
UN and AU; used by African Peer Review Mechanism (APRM)

EITI in Operation
Companies Disclose Payments to Government Government Discloses Receipts from Companies

Award of licenses & contracts

Regulation & monitoring of operations

Reconciliation of Audited Payments / Receipts (EITI Report)

Revenue Distribution & Management

Expenditure Management: Pursuit of Sustainable Development Policies

Oversight by MultiStakeholder Group

African Countries in the EITI

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21- # of countries implementing the EITI in Arica 18- # of African countries that have published EITI Reports (31 reports in total). 5- # of African countries considered EITICompliant: Central African Republic, Ghana, Liberia, Niger, Nigeria Several more countries close to compliant or undergoing validation 2- # of countries delisted from EITI.

EITI – A Tool for Improving the Governance of Natural Resource Governance



The mandate is EITI is largely focused on revenue transparency. It relies on peer-pressure to improve broader resource governance. Improved governance then derives from multi-stakeholder engagement:
Investment incentives: level, transparency

Contract negotiations (Legal Support Facility) • Current tax regime for EI • Regulatory environment for EI • Revenue sharing arrangements In the African context and the “Africa led and Africa owned” jargon, EITI is used in the APRM Questionnaire:

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Corporate governance Economic governance

Uganda is Competing in a Crowded Sector

Two Options for Natural Resources reach countries

Governments can chose to succeed without their citizens – Angola, Equitoria Guinea. Governments can succeed with their citizens – Botswana, South Africa, Ghana, Kenya. Governments can remain in a crisis mode – DRC, Sudan, Chad. EITI and good governance are the choices of countries that chose to succeed with their citizens.

Uganda and the EITI process Where Are We?

Uganda and the EITI Process The process is uncertain or unknown
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Save for declarations of commitment from government officials time and again, Uganda’s commitment to subscribe to EITI is uncertain. This is consistent with recent trends where evidence shows that Uganda is reluctant to participate in governance initiatives:
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Open Government Partners (OGP) Partnership for Social Accountability (PSA) – World Bank

Governance is the Foundation for An Enabling Environment for the Mining Sector 

Governance indicators tracked by the World Bank.
Voice and Accountability  Political stability and absence of violence.  Government effectiveness.  Regulatory quality.  Control of corruption. Uganda performs below average on each of these indicators and the current governance environment has negative implications for the mining sector.

World Bank Indicators on Governance
oVoice and accountability - The indicator on voice and accountability assesses the extent to which citizens have political rights and civil liberties and are able to participate in selecting their government.

World Bank Indicators on Governance
oPolitical stability and absence of violence- Reflects perceptions of the likelihood that the government will be destabilized or overthrown by unconstitutional or violent means, including politically-motivated violence and terrorism. (Weak =-2.5; strong=2.5; i.e. the more ascending the trend is towards positive, the better)

World Bank Indicators on Governance
oGovernment effectiveness - Reflects perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government's commitment to such policies

World Bank Indicators on Governance
Regulatory quality- Reflects perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development.

World Bank Indicators on Governance
oControl of corruption- Reflects perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as "capture" of the state by elites and private interests.

Creating a competitive minerals sector – What we Must Demand from Government

Creating a competitive minerals sector is our business as much as it is the business of government.

Demand that Government should expeditiously initiate and fast track the process of subscribing to EITI.
Open Government Partnership (OGP).  Partnership for Social Accountability.

Creating a competitive minerals sector – What we Must Demand from Government

Identifying and developing multi-purpose infrastructure projects – the mining sector would benefit immensely from this kind of infrastructure – participation in EITI can build the confidence for partnerships. Legal reforms in infrastructure development can facilitate the multipurpose infrastructure agenda. Creating opportunities for ordinary people – the mining industry must put communities at the heart of their industry.

Concluding Remarks

Uganda has multiple opportunities – and mining should be seen as one of them. Making progress including in mining will be more a function of governance and leadership. Participating in EITI is communicating a message of confidence in our government systems and governance. Sitting on the fence of whether to join or not or delaying the process works against us in an increasingly competitive market place.

THANK YOU

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