Watching The World: NGOs promote transparency

Oct. 11, 2010
Transparency is a key concern of the oil and gas industry, so the introduction of a new index to measure transparency is a welcome event.

Transparency is a key concern of the oil and gas industry, so the introduction of a new index to measure transparency is a welcome event.

"A pioneering new measurement of government openness in managing oil, gas, and minerals ranks Brazil and Norway highest among 41 countries for making public detailed information about these key resources," the Revenue Watch Institute (RWI) and Transparency International (TI) said.

The remarks came as the organizations introduced a 56-page report comparing how much the 41 governments disclose about the money they receive for oil, gas, and minerals exploitation.

In nearly all of these countries, natural resources are public assets, and the revenues are managed in trust by the government on behalf of its citizens. But the governments involved may or may not take the public trust as seriously as it deserves.

Limited information…

"We found that in too many countries, governments give citizens little information about this crucial part of the economy," said RWI Director Karin Lissakers. "Without access to information, the public has very limited influence on how governments manage the resources and how governments use the revenues."

Government openness about its income is essential to combat high-level corruption and reduce citizens' mistrust of how government uses its funds, the report noted.

"Transparent, accountable management of these revenues is also fundamental to economic development and political stability," the organizations said, adding, "Openness does not guarantee good governance, but transparency is one of its essential building blocks."

"Our findings are a call to lawmakers and civil society to focus their attention on the weaknesses pinpointed by the index and to press for specific reforms for greater openness," said Christiaan Poortman, TI's director of global programs.

…Critical role

In case anyone has forgotten, oil, gas, and mining play a critical role in the global economy. Oil and its byproducts account for 15% of world trade, while oil and mining account for as much as 80% of the GNP of the countries included in the index.

It goes without saying that proper governance of the extractive sector is now seen as critical to the economic success of resource-rich countries.

Yet, as RWI and TI note: "The absence of an objective set of revenue transparency benchmarks for governments hampers efforts to promote the accountable, transparent, and effective management of oil, gas, and mineral revenues."

The index is meant to address this gap and to be a resource for activists and policymakers, to guide their efforts to achieve higher standards of transparency and accountability in the extractive sector.

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