U4 Helpdesk Query

Content

This reply is structured somewhat differently because it is composed of information on individual initiatives. Initiatives covered in this answer include:

• Measuring Transparency Project
  
• Publish What You Pay
  
• Revenue Watch
• UN Global Compact
• Global Reporting Initiative
• The Kimberley Process

U4 helpdesk reply

There are numerous international initiatives aimed at promoting better fiscal transparency, accountability and reporting. While we are unable to provide an exhaustive list within the timeframe of the query, presented below is a selection of relevant initiatives. Several of them relate specifically to the extractive industries, while a few others are not limited to the industry but are relevant examples of multi-stakeholder voluntary accountability and reporting tools. The level of detail we were able to obtain on each initiative has been largely conditioned by the availability of information from the source in question. We will however be happy to research any of the tools further, if there is interest and time from your side.

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Measuring Transparency Project

Description/Objectives:

The Measuring Transparency project, led by Save the Children, has developed a standard to assess the performance of companies and governments in support of revenue transparency. It also provides a framework to track their progress over time. In its first phase the project has focused on companies and "home" governments (i.e. governments of countries in which oil and gas companies are registered or raising finance). Future phases will look at international financial institutions, mining companies and host governments.

Ten home countries were ranked on four areas:
a) requirements for disclosure of revenue payments
b) requirements for disclosure of supportive financial information
c) access to information legislation, and
d) broader governance.

Countries covered were: the UK, the USA, Canada, France, the Netherlands, Italy, Norway, Australia, South Africa and Russia. The home country assessment framework was developed by independent consultants through a consultative process involving government, civil society, investors and industry experts. A reference group provided guidance on both methodology and analysis of the results.

The project has ranked the policies, management and performance of 25 oil and gas companies (including all oil majors as well as listed state-owned companies) across three categories:
a) disclosure of revenue payments
b) supportive disclosure, and
c) anti-corruption and whistle-blowing.

Performance was assessed in Nigeria, Angola, Azerbaijan, Indonesia, Timor Leste and Venezuela. The company framework was also developed through a consultative process involving government, civil society, investors and industry experts. A reference group met twice to review the methodology and findings. In the interests of maintaining a level playing field, individual company input was not sought on the design of the framework. Industry associations were invited but declined to participate. Ex-industry representatives contributed to ensure a robust and objective process.

A full report, Beyond the Rhetoric - Measuring revenue transparency in the oil and gas industries, Save the Children, 2005 has been produced.
The report was written by Emerging Market Economics in conjunction with Save the Children UK. Additional funding for the study was obtained from a range of Non-Governmental Organisations including the Open Society Institute (OSI), Insight Investment, CARE UK, CAFOD, Secours Catholique and World Vision. In addition, a reference group was consulted on the findings of the report. This group comprised members of the Department of International Development and the Foreign and Commonwealth Office of the UK government; advisers from funding organisations and other NGOs; representatives of the study companies; and experts on the countries studied form the financial sector and governments

Organisation/management:

Measuring Transparency was conceived by Save the Children UK and developed in collaboration with investors, independent consultants, ratings agencies and other members of the Publish What You Pay NGO coalition of which Save the Children UK is a co-founder and leading member.

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Publish What You Pay

Description/Objectives:

The Publish What You Pay campaign aims to help citizens of resource-rich developing countries hold their governments accountable for the management of revenues from the oil, gas and mining industries. The Publish What You Pay coalition calls for the mandatory disclosure of the payments made by oil, gas and mining companies' to all governments for the extraction of natural resources. This is a necessary first step towards a more accountable system for the management of revenues in resource-rich developing countries.

Organisation/management:

The campaign was founded by Global Witness, CAFOD, Oxfam, Save the Children UK, Transparency International UK and George Soros, Chairman of the Open Society Institute. The coalition has grown enormously and now consists of over 280 NGOs worldwide. There are now several Publish What You Pay national NGO coalitions around the world, including in Azerbaijan, Chad, Congo Brazzaville, Democratic Republic of Congo, France, Kazakhstan, The Netherlands, Nigeria, the United States and the United Kingdom. Publish What You Pay has an International Coordinator based in the offices of the Open Society Foundation in London

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Revenue Watch

Description/Objectives:

The Revenue Watch policy programme, which has a particular focus on Azerbaijan, Iraq, Kazakhstan and Africa, aims to generate and publicise research, information, and advocacy on how revenues are being invested and disbursed and how governments and extraction companies respond to civic demands for accountability. It also seeks to build the capacity of local groups to monitor government management of oil revenues through training in budget monitoring, training in reporting on the extractive sector, and seed grants to budget watchdogs.

Resource-rich states throughout the world face an unusual paradox. Natural resources, once touted as a blessing for poor countries, have more often contributed to poverty violent conflict, corruption, and repression. The transparent use of revenues generated by the sale and transport of natural resources is an issue of great importance for regional development and the promotion of civil society. Revenue Watch hopes to ensure that existing and future natural resource revenues be invested and expended for the benefit of the public, such as poverty reduction, education, and public health - through the promotion of transparency, civic involvement, and government accountability.

Organisation/management:

Revenue Watch is a programme run by the Open Society Institute.

UN Global Compact

Description/Objectives:

Through the power of collective action, the Global Compact seeks to promote responsible corporate citizenship so that business can be part of the solution to the challenges of globalisation. In this way, the private sector - in partnership with other social actors - can help realise the Secretary-General's vision: a more sustainable and inclusive global economy. Today, many hundreds of companies from all regions of the world, international labour and civil society organisations are engaged in the Global Compact, working to advance ten universal principles in the areas of human rights, labour, the environment and anti-corruption.

The Global Compact is a purely voluntary initiative with two objectives:
- mainstream the ten principles in business activities around the world
- catalyse actions in support of UN goals

The Global Compact is not a regulatory instrument - it does not "police", enforce or measure the behaviour or actions of companies. Rather, the Global Compact relies on public accountability, transparency and the enlightened self-interest of companies, labour and civil society to initiate and share substantive action in pursuing the principles upon which the Global Compact is based.

To participate in the Global Compact, a company:

- Sends a letter from the Chief Executive Officer (and endorsed by the board) to Secretary-General Kofi Annan expressing support for the Global Compact and its principles;
- Sets in motion changes to business operations so that the Global Compact and its principles become part of strategy, culture and day-to-day operations;
- Is expected to publicly advocate the Global Compact and its principles via communications vehicles such as press releases, speeches, etc.; and
- Is expected to publish in its annual report or similar corporate report (e.g. sustainability report) a description of the ways in which it is supporting the Global Compact and its ten principles.

The initiative also provides platforms for companies and other stakeholders to engage in proactive ways of pursuing the principles, ranging from global policy dialogues to establishment of local networks at local and regional levels.

Organisation/management:

The Global Compact is a direct initiative of the UN Secretary General. It is a network-based, multi-stakeholder initiative. At its core are the Global Compact Office, the Advisory Council and six UN agencies. The Global Compact involves all relevant social actors: governments, who define the principles on which the initiative is based; companies, whose actions it seeks to influence; labour, in whose hands the concrete process of global production takes place; civil society organisations, representing the wider community of stakeholders; and the United Nations, the world's only truly global political forum, as an authoritative convener and facilitator.

For detailed information on how GC is organised and its different stakeholders, please see the GC Stakeholders section of the GC website.

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Global Reporting Initiative

Description/Objectives:

The Global Reporting Initiative (GRI) is a multi-stakeholder process and independent institution whose mission is to develop and disseminate globally applicable Sustainability Reporting Guidelines. These Guidelines are for voluntary use by organisations for reporting on the economic, environmental, and social dimensions of their activities, products, and services. The GRI incorporates the active participation of representatives from business, accountancy, investment, environmental, human rights, research and labour organisations from around the world. Started in 1997, GRI became independent in 2002, and is an official collaborating centre of the United Nations Environment Programme (UNEP) and works in cooperation with UN Secretary-General Kofi Annan's Global Compact.

Organisation/management:

An overview of the governance of the Global Reporting Initiative is provided on its website.

The organisation consists of a Board of Directors, Organisational Stakeholders, Stakeholder Council, Technical Advisory Committee and a Secretariat.

Board of Directors: The GRI Board of Directors has the ultimate fiduciary, financial and legal responsibility for the GRI, including final decision making authority on GRI Guidelines revisions, organisational strategy, and work plans. The Board is geographically diverse and represents a broad variety of stakeholder groups. Nevertheless, Board members are required to serve as individuals, not as formal representatives of the organisations with which they are affiliated.

Organisational Stakeholders: The GRI offers a mechanism through which an unlimited number of organisations can identify themselves as committed to the GRI mission. Organisational Stakeholders elect 60% of the Stakeholder Council. Registration requires Organisational Stakeholders to commit to participation, promotion, and disclosure

Stakeholder Council: The Stakeholder Council (Council) is the formal stakeholder policy forum within the GRI structure. It serves as an active multi-stakeholder body for debating and deliberating key strategic and policy issues facing the GRI. The Council appoints Board members and makes recommendations to the Board on Guidelines revisions and other strategic matters. The Council has sixty members, comprising a balance of stakeholder and geographic constituencies. It meets annually.

Technical Advisory Committee: The Technical Advisory Committee (TAC) will provide the GRI Board of Directors and Secretariat with high-level technical guidance on the Guidelines revision process and GRI technical work plan. The TAC will comprise ten to fifteen (10 - 15) experts in the fields of the environment, human rights, labour, economics and finance, reporting, and/or accounting. Each technical advisor will offer the perspectives of varying constituencies and regions of the globe. The Board of Directors will appoint all members of the TAC in consultation with the Stakeholder Council and Secretariat. The Technical Advisory Committee is expected to be operational in 2004.

Secretariat: Under the leadership of a Chief Executive, the Secretariat implements the work plan of the GRI Board of Directors. It also manages communications, outreach, stakeholder relations, and financial administration. The Secretariat supports the operations of the Board of Directors, Stakeholder Council and Technical Advisory Council. The Chief Executive serves as an ex-officio member of the Board.
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The Kimberley Process

Description/Objectives:

The Kimberley Process is a joint government, international diamond industry and civil society initiative to stem the flow of conflict diamonds - rough diamonds that are used by rebel movements to finance wars against legitimate governments. The trade in these illicit stones has contributed to devastating conflicts in countries such as Angola, the Democratic Republic of Congo and Sierra Leone.

The Kimberley Process Certification Scheme is an innovative, voluntary system that imposes extensive requirements on Participants to certify that shipments of rough diamonds are free from conflict diamonds. The Kimberley Process is composed of 43 Participants, including the European Community. Kimberley Process Participants account for approximately 99.8% of the global production of rough diamonds.

Organisation/management:

The Kimberley Process normally meets once a year in Plenary. Plenary meetings provide Participants, industry leaders, and civil society members the opportunity to meet face to face to discuss and assess the implementation of the certification scheme.

Plenary meetings are reserved for Participants, Applicants and Observers only. A Final Communiqué outlining the decisions and events of the meeting are made public and are posted in the Documents section of the website.

The Chair of the Secretariat is responsible for overseeing the implementation of the Kimberley Process Certification Scheme, the operations of the Working Groups and Committees, and the general administration of the Kimberley Process. The Chair of the Kimberley Process is selected by Plenary and rotates annually between Participants.

The Process also includes a number of Working Groups, amongst which are:

The Working Group on Monitoring - mandated to monitor and assess implementation of the Kimberley Process Certification Scheme by all Participants.

The Working Group on Statistics - mandated to ensure timely reporting and analysis of statistical data on the production and trade of rough diamonds in order to identify anomalies and to ensure the effective implementation of the certification scheme.

The Working Group of Diamond Experts - also referred to as the Technical Working Group, is tasked with identifying solutions to technical problems in the implementation of the KPCS such as: proposing changes to the Harmonised System Codes for rough diamonds to the World Customs Organisation; the classification of diamond powder; the international transfer of diamond samples from exploration projects.