Extractive industries seek gold standard
Extractive industries seek gold standard
A visiting Mongolian delegation comprised of government, industry and civil society active in the petroleum and mining sectors shared their experience in implementing the Extractive Industries Transparency Initiative (EITI) with their Cambodian counterparts at a workshop in Phnom Penh yesterday.
The EITI is an international standard for disclosure and transparency in the management of revenues from natural resources.
Governments that implement the standard disclose how much they receive from oil and mining companies operating in their country, while the companies disclose the amount they pay as taxes, royalties and other operating fees.
“The EITI is a mechanism used to promote more transparency [in resource revenue management]” said Meng Saktheara, secretary of state at the Ministry of Mines and Energy. “The mechanism encourages the participation of the various stakeholders to define and implement policy, and to foresee the impact of this policy.”
Forty-eight countries have implemented the EITI and 31, including Mongolia, are deemed compliant. Compliance is based on seven criteria, including the timely publication of comprehensive financial reports on a country’s extractive industries.
Cambodia is not yet a candidate for EITI implementation. However, it is hoped Mongolia’s experience will encourage Cambodia’s government to implement the standard.
Saktheara said EITI compliance encourages foreign investment and improves a country’s eligibility for financing from international lending institutions such as the World Bank, IFC and ADB.
“Those institutions encourage companies to invest in countries that comply with the EITI, so it is easier for them to obtain finance,” he explained.
The government has announced a raft of reforms aimed at good governance in the management of Cambodia’s natural resources.
To achieve these goals and develop the country’s extractive industries, it is crucial to promote transparency and accountability among all the stakeholders, Saktheara said.
“We need reform to make sure that we use our resources effectively, transparently, and that people get equal share of the resource in the present and the future,” he said.
