New EITI Standards,Philippine Candidacy

and PH-EITI Work Plan

OVERVIEW OF EITIWhat it does:

•The Extractive Industry Transparency Initiative (EITI) is a global standard of transparency that requires the extractive industries such as oil, gas, and mining to publish what they pay to the government, and the government to publish what they collect from these industries.

OVERVIEW OF EITI

OVERVIEW OF EITI

• The EITI adheres to the principle that there must be sound management of natural resources. It operates on the premise that the citizens own these resources, and therefore have the right to know how these resources are managed.

OVERVIEW OF EITIHow it works:

The EITI standards rest on 3 pillars:1. All revenues from extractive industries should be

regularly published and independently verified;2. Publication of data should be managed and

overseen by a multi stakeholder group (MSG) composed of the government, the industries, and civil society; and

3. Data should be effectively shared with the country’s citizens and stimulate an informed debate about how natural resources are governed.

OVERVIEW OF EITIWho are involved:

•Globally, the EITI international board oversees the Initiative. The Board, led by a Chairman, is composed of 20 members, representing implementing countries, supporting countries, civil society organizations, industry and investment companies.

IMPLEMENTING COUNTRIES

1. Afghanistan2. Cameroon3. Chad4. Guatemala5. Honduras6. São Tomé and Príncipe7. Solomon Islands8. Trinidad and Tobago9. Guinea10. Indonesia

11. Kazakhstan12. Tajikistan13. The Philippines14. Democratic Republic of Congo (suspended)15. Madagascar (suspended)16. Sierra Leone (suspended)

Candidate Countries:

1. Azerbaijan2. Iraq3. Kyrgyz Republic4. Mauritania5. Mozambique6. Nigeria7. Peru8. Tanzania9. Timor-Leste10. Zambia11. Albania12. Burkina Faso

13. Côte d'Ivoire14. Ghana15. Liberia16. Mali17. Mongolia18. Niger19. Norway20. Republic of the Congo21. Togo22. Yemen23. Central African Republic (suspended)

Compliant Countries:

OVERVIEW OF EITIIn the Philippines, the multi-stakeholder group (MSG) is composed of representatives from the government, the extractive industries, and the civil society.

The government agencies involved in EITI implementation are the following:

1. Department of Finance (under which the PH-EITI secretariat is lodged).2. Department of Environment and Natural Resources3. Department of Energy 4. Department of Interior and Local Government5. Union of Local Authorities of the Philippines.

OVERVIEW OF EITI

• The civil society is mainly represented by Bantay Kita Philippines, a broad coalition of civil society organizations advocating transparency and accountability.

• The extractive industries are represented by the Petroleum Association of the Philippines, The Chamber of Mines Philippines, and an elected representative from non-chamber members.

Objectives and Benefits:

The benefits of EITI implementation are the following:

1. Demonstrates a national commitment to governance

2. Single-window information disclosure system

3. Increased efficiency in collection of resource revenue

4. Improving sovereign and corporate ratings

5. Empowers civil society to seek greater accountability

OVERVIEW OF EITI

2013 EITI STANDARDS 1. The EITI requires effective oversight by the multi-stakeholder group.

2. The EITI requires timely publication of EITI Reports.

3. The EITI requires EITI Reports that include contextual information about the extractive industries.

a. Legal framework and fiscal regimesb. Overview of extractive industries and significant exploration activitiesc. Contribution to national economyd. Production figures

2013 EITI STANDARDS e. Government participation in the extractive sectorf. Distribution of revenuesg. Revenue management (encouraged)h. Licensesi. Beneficial ownershipj. Production contracts (encouraged)

4. The EITI requires the production of comprehensive EITI Reports that include full government disclosure of extractive industry revenues, and disclosure of all material payments to government by oil, gas and mining companies.

• Government’s production entitlement• National state owned company and production

entitlement• Profit taxes• Royalties• Dividends• Bonuses• License fees, rental fees• Other significant payments and material benefits• Sale of state’s shares of production• Infrastructure provisions and barter arrangements

Revenue Streams

• Social expenditures

• Revenues from transportation of oil, gas and minerals if it constitutes one of the largest revenue streams

• Material payments to state owned enterprises and transfers between state owned enterprises and government agencies

• Subnational payments

• Subnational transfers

Revenue Streams

5. The EITI requires a credible assurance process applying international standards.

6. The EITI requires EITI Reports that are comprehensible, actively promoted, publicly accessible, and contribute to public debate.

7. The EITI requires that the multi-stakeholder group take steps to act on lessons learned and review the outcomes and impact of EITI implementation.

2013 EITI STANDARDS

Timelines for Validation

PH-EITI’s Candidature and Work Plan

Steps we undertook to become a candidate:

•The government issued an unequivocal public statement of its intention to implement the EITI.

Executive Order 79

Statement of the President

“We will implement the Extractive Industries Transparency Initiative (EITI) in order to improve transparency in the collection and payment of government taxes and other revenues from extractive industries. We earlier declared this commitment through Section 14 of Executive Order No. 79. We will apply for EITI Candidacy in January 2013.”

Statement of the President

“Most importantly, we commit to implement EITI in an exclusive and participatory manner. In line with the prescriptions of EITI, we have formally convened a Multi-Stakeholder Group that has developed, deliberated upon and endorsed a work plan for EITI implementation in the country. We call on industry, civil society and other stakeholders to link arms with the government in putting this transparency initiative to action.”

PH-EITI’s Candidacy and Work Plan

Steps we undertook to become a candidate:

•The government appointed a senior individual to lead on the implementation of the EITI.

•The government worked with civil society and companies, and established a multi-stakeholder group to oversee the implementation of the EITI.

Terms of ReferenceGeneral Roles of the MSG members:

•Ensure an open and transparent functioning of PH-EITI

•Address confidentiality concerns in implementing EITI

•Communicate and provide linkages and facilitate dialogue with the different organizations and groups regarding related issues

•Help determine parameters of EITI implementation

•Be involved in communicating updates and results to their respective constituencies and to the general public

•Implement capacity building and other knowledge exchange activities for those less familiar with EITI

Terms of ReferenceRole of Government Representatives:

•Provide political leadership and support such as creating a unit which will provide secretariat and technical support to Philippine EITI

•Ensure the full participation of national government agencies and local government units in the implementation of EITI and create an enabling policy environment for the same

•Ensure the full participation of extractive companies

Terms of ReferenceRole of Government Representatives:

•Encourage the full participation of civil society

•Provide a legal basis for implementation of EITI as well as identify and address legal barriers and regulations that block the proper implementation of EITI

•Disclose government revenues and relevant data in an accurate and timely manner and at a level of detail to be agreed upon by the MSG

Terms of ReferenceRole of Business Representatives:

•Help ensure the full participation of extractive companies

•Disclose payments and relevant data to government, IPs and other stakeholders in an accurate and timely manner at a level of detail to be agreed upon by the MSG

•Communicate with industry stakeholders developments on EITI

Terms of ReferenceRole of CSO Representatives:

•Communicate and consult widely with a diverse set of stakeholders including those outside the steering group and build capacities on EITI

•Ensure full participation of relevant CSOs

•Monitor the disclosures done by the government and extractive companies

Steps we undertook to become a candidate:

•The multi-stakeholder group developed a work plan, fully costed and aligned with the reporting and Validation deadlines established by the EITI Board.

•Upon completing the above steps, the government submitted an EITI Candidate Application to the EITI Board.

The Philippines was admitted as a Candidate Country on May 22, 2013 during the EITI Global

Conference in Sydney, Australia.

Objectives of the PH-EITI work plan and the activities that support these objectives: 1.Establish commitment and support to implement EITI2.Form the MSG, develop and publish the TOR and work plan3.Institutionalize PH-EITI4.Prepare to implement and monitor PH-EITI5.Report, reconcile, audit revenue flows6.Communicate, build knowledge and engage citizens

CONCLUSIONKey features of the new standards

1.Extending the scope of EITI reporting is encouraged.

2.Contain specific rules on which information are required and which are merely encouraged.

3.Explicitly state the importance of communicating EITI to the public.

4.Contextual information is required, thus making the report more useful and informative

THANK YOU!!!PH - EITI Secretariat

Contact Details:Email

eitiphilippines@gmail.comalessandra.v.ordenes@gmail.com

abigailocate@gmail.com babesmancheta@gmail.com

dave.galang@gmail.com Telephone: 784-4286 local 4939