Burma a ‘candidate country’ for EITI-compliant status

File photo of oil storage tanks near Kyaukphyu in Arakan State, the starting point of the Shwe natural gas pipeline. (PHOTO: AFP)
Burma’s application to join the Extractive Industries Transparency Initiative (EITI), a set of voluntary reporting standards pertaining to revenue transparency and resource governance, has been accepted.

The announcement came on Wednesday at an annual meeting of the EITI Board, held this year in Mexico City. Burma is the 45th country worldwide to seek EITI compliance.

Burma will have 18 months to produce its first report, and a decision on whether or not its efforts have been sufficient to grant the country “compliant” status will occur within three years.

EITI standards aim to promote revenue transparency by ensuring that payments from companies operating in extractive industries – namely mining and oil and gas – match revenues received by governments. By making this information public, EITI standards are intended to reduce opportunities for public sector graft. Tripartite “multi-stakeholder groups” in EITI countries – comprised of representatives from industry, government, and civil society – are responsible for implementing EITI standards by producing reports, which are then verified through an independent auditing process.

Requirements pertaining licence transparency and the disclosure of the beneficial ownership – the entities that directly profit from extractive projects – are also part of the latest EITI Standard. The multi-stakeholder group determines what sectors are subject to EITI rules, and it remains to be seen if Burma, officially known as Myanmar, will apply EITI standards to forestry or hydroelectricity.

According to a statement on EITI’s website, Zaw Oo, the national coordinator of Myanmar EITI, said that being a part of the initiative could be a catalyst for ongoing reforms.

“We deeply appreciate the decision of the EITI Board, which recognizes our determination to transform Myanmar to [a] democratic and peaceful country,” Zaw Oo said in the press release. “EITI gives us a useful tool to design our escape from the resource curse.”

Last week, resource governance watchdog Global Witness released the results of a survey it conducted of the winning firms in Burma’s recently-concluded oil and gas tendering process. Of the 47 companies contacted by the organisation, just 11 produced information detailing their beneficial ownership. While the oil and gas tendering process marked an improvement over past practices, it drew negative comparisons to a parallel telecommunications tender by the Ministry of Communications and Information Technology that concluded last year.

Although Burma’s Ministry of Energy released the names of the winning firms at the time, it did not publicly detail those companies’ beneficial ownership or provide licencing details, such as the fees companies will be required to pay once contracts are signed. Burma must retroactively disclose these details as EITI implementation gets under way.

“As part of Myanmar’s EITI, the government has also committed to map and identify beneficial ownership of the companies operating in Myanmar, disclose details of the 2013-14 oil and gas bidding round, and explore the methodology and extent of contract transparency,” former British MP Clare Short, the chair of the EITI, said in a statement.

President Thein Sein announced his intention to have Burma join the EITI in December 2012, and the first meeting of the multi-stakeholder group responsible for implementation occurred in February. Burma formally submitted its application for candidate status in May.

Burma joins the Philippines and Indonesia among ASEAN states that have begun the process of achieving EITI compliance; both of those states are currently candidate countries.

By ALEX BOOKBINDER (DVB)

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