This material was presented in Events PWYP-Asia-Pacific Regional Forum

In Manila, Philippines - March, 2014

Workshop Highlights

Asia-Pacific Regional Forum

Wednesday, 26 March 2014

Pillar One

Publish Why You Pay & Why

You Extract

Free, Prior & Informed Consent

(FPIC)

Tax Justice & Illicit Flows

Sovereign Wealth Funds

Trade Agreements

Advancing the FPIC Debate

• Key points/issues– Not all countries have FPIC laws or policies. – Those with FPIC (or related policies) have conflicting or

contradictory provisions. – Gap between law/policy and practice. – The primacy of customary law– Information gaps: the law, people’s rights, technical processes

have to be communicated in a language that is understandable and accessible.

– Capacity gaps: government agencies need technical expertise and ‘compassion’ to adequately represent the communities

– Indigenous leaders could be vulnerable to co-opting their community members

– Culture of IP dependency created by companies and governments

Advancing the FPIC Debate (cont.)

–Mainstream FPIC in current national laws and policies: EIA, ECCs, IP Laws

– Require EI companies to include FPIC as core component of CSR

– Build capacities for FPIC: information flows– Communities, NGOs/CSOs, governments,

companies, advocacy with media– Create FPIC Regional FPIC Index &

Community level FPIC– Link FPIC to Open Contracting

Tax Justice & Illicit Financial Flows

• Key points/issues– Trade mispricing and re-invoicing: pervasive

& difficult to track– Illicit flows have been increasing over the

years.- In developing countries: 50 percent of investments from tax havens– There are tools/methods to attempt to tackle

problem of illicit financial flows (e.g. country-by-country reporting, automatic information exchange, etc)

Tax Justice & Illicit Financial Flows (cont.)

– Tax Justice: the right to tax and the obligation to pay. Transparency and accountability are key concepts in tax justice

– Taxation must be a tool for equity– Two levels:

• international• Local

– Excessive incentives to mining companies– Reforms needed for the fiscal environment to be

more transparent– The nature of the problem (global) requires that

response must also be global

Resource Curse: Sovereign Wealth Funds as a Safeguard Measure

• Oil and gas contribute most to Natural Resource Funds (77%)

• Good NRF governance practices:– strong statements and objectives– appropriate fiscal rules– clear division of responsibilities– regular and extensive disclosures– strong and independent oversight bodies

Issue: The need to set up SWFs varies from country to country, depending on needs and economic indicators.

Resource Curse: Sovereign Wealth Funds as a Safeguard Measure

• Revenue Watch recommendations:– NSFs should be products of rules and frameworks that

call for savings of revenues– NSFs require political consensus and informed

oversight

• Until you know the extent of the resources in your country, a SWF is pre-emptive (e.g. if revenue generated by natural resources is low, cost of SWF could outweigh benefit)

Issue: SWFs are best governed by law. It is important to push for legislation because it establishes the rules.

Trade Agreements

• Key Points– Congress is our friend?– Information (and the lack of it) is power– Trade agreements: not only related to

exchange of goods and services but also to policies related to investments and taxations

– “Reverse National Policy Making”

Publish What

You PayNew EITI Standard

Fiscal & Regulatory

Policies

Mandatory Disclosures

Fiscal & Regulatory Policies in Indonesia

• Key Points- Politics play a major role in

implementing policies- Leaks such as corruption may be

caused by confusing decentralized and inconsistent policies

Issue:

Goal:

Mandatory Disclosures in the G20 Context

• Key Points– tools for civil society to make sense of

disclosure data– final template for mandatory disclosure

reporting– stock exchange opportunities– EITI implementation in South Korea,

Australia– role of China in mining operations and

policies

The New Extractive Industries Transparency Initiative (EITI) Standard

• Main issues/points• Very high interest in potential of EITI • Lots of clarifications required on the

new standard• Craft a regional vision for extractive

industries where EITI can feed into• Do a comparative EITI report across

the region for lobbying• Include FPIC in EITI standard

Publish What You Earn & How You Spend

Pillar 3

Budget Monitoring &

Revenue Sharing

Linking Revenues to Expenditure

– Problem: lack of transparency in budgeting, no mechanism to track budget, data is NOT unbundled and disaggregated

– Objectives:– 1. push for EITI as a monitoring tool at the

subnational level– 2. Review existing laws on revenue sharing– 3. Mobilize the community

– Partners and Alliances were also identified