Watching Government: Looking beyond transparency

Nov. 10, 2014
More transparency is essential to improve resource governance, speakers suggested at a Nov. 4 Brookings Institution discussion. But much more is needed, they quickly agreed.

More transparency is essential to improve resource governance, speakers suggested at a Nov. 4 Brookings Institution discussion. But much more is needed, they quickly agreed.

"It's essential and powerful, but not the only tool to ensure resource development is translated to a country's benefit," said Natascha Nunes de Cunha, Latin America government relations manager at Vale, a Brazilian multinational mining company.

Companies need to balance their corporate responsibilities with meeting local residents' needs, she observed. "That's where good governance and transparency come in," Nunes said.

US oil and gas firms that operate overseas are heavily involved in this issue. Several raised questions about the Dodd-Frank law's requirement to disclose foreign agreements because they believe it could make it harder for them to compete globally. Many are working to get the Extractive Industries Transparency Initiative more widely implemented.

"Translating transparency into accountability isn't happening across the board," said Natural Resources Governance Institute Pres. Daniel Kaufman. "It's not just putting contracts online, but finding out how to convert data into true accountability."

Latin America is ahead of the Middle East and former Soviet republics in that regard, "but there are signs of trouble, particularly government instability," Kaufman said.

Brookings hosted the discussion to help launch an Inter-American Development Bank book that outlines extractive industries' experiences in Latin America and the Caribbean.

The book, "Transparent Governance in an Age of Abundance," is available for download at www.iadb.org.

Strong political will

Translating transparency into civil terms can be challenging, according to one of its authors, Juan Cruz Vieyra, an operations specialist in IADB's Institutions for Development. "In Colombia, there was a strong political will to put the information out there, even though the government didn't know the outcome," he said.

"Depending on which agency uses it, information and data can provide checks and balances, especially at the local level," added his co-author, Mataika Masson, an energy and extractive industries specialist in IADB's energy division.

Governments sometimes create their own problems, noted Victor Hart, who chairs the steering committee Trinidad and Tobago's Extractive Industries Transparency Initiative. "We were on the verge of becoming EITI-compliant when we discovered that the legislature had passed a law making illegal for a company to disclose to a compliance inspector tax information that it routinely filed," he said.

"Resource-rich countries tend to be more opaque," said Kaufmann. "They need more incentive to improve. We have to renew our efforts because the successes are exceptions in Latin America. Countries like Mexico, which are reforming their systems, are asking the proper questions."