Monday, November 25, 2019

Whither Transparency in Extractive Industries?

Tanzania`s EITI agenda is stuck, and faces a bleak future

Dastan Kweka

Earlier this month, the Deputy Minister for Minerals – Hon. Stanslaus Nyongo – informed a diverse audience attending HakiRasilimali`s “Jukwaa la Uziduaji” (Extractive Industries Conference) in Dodoma, that the government was finalizing preparations for disclosing Beneficial Ownership information, stressing that there was a need to “educate the public” before such information is released. A Beneficial Owner is the true owner of an investment – one that, ultimately, benefits from the proceeds. The disclosure of such information is one of the key Extractive Industries Transparency Initiative's (EITI) requirements. The latest Tanzania Extractive Industries Transparency Initiative's (TEITI) implementation report corroborates with what the Deputy Minister said, and notes that the government is working on an integrated public registry (online portal) that will host the information.

EITI has set a deadline of 2020 for member countries to ensure all companies that apply or hold participating interest in oil, gas and mining sectors disclose Beneficial Owners information. Will Tanzania honor this deadline? In my opinion, this is unlikely, given that the government is already advancing preemptive excuses in terms of the “need to educate the public” before disclosure takes effect. This familiar talking point has been used before to ward off demands for contract disclosure, and has since become a favored argument – one that has replaced “commercial sensitivity”. It is also quite unlikely given that the information will inevitably uncover the identities and interests of local politicians and prominent businesspeople – a potential mine field that any political establishment would seek to avoid, especially in the period leading to a general election.
There are more fundamental questions surrounding the future of TEITI. While the introduction of the Tanzania Extractive Industries Transparency Initiative Act (TEITA) in 2015 was seen as a positive step towards institutionalizing transparency and accountability in the sector, the country has seen multiple recent signs that point to a decline in government commitment. The first and most (symbolically) significant sign was the government`s decision to withdraw from the Open Government Partnership (OGP) in 2017. When the Permanent Secretary from the Ministry of Foreign Affairs – Dr. Aziz Mlima - was interviewed about the position, he said at the time that the decision was a “temporary move because the government wanted to reassess the OGP” and find out “if it is in line with national interests.” This points to a certain level of suspicion that has for a long time been associated with initiatives that are considered “foreign”, especially in the extractives sector. A recent study attributes that suspicion to the legacy of Ujamaa – a socialist experiment that the country attempted in the 1970s, and which was predominantly against private, profit-oriented and (local or) foreign backed or owned initiatives.
The said suspicion has now been heightened by the fifth phase government`s growing emphasis on homegrown solutions. It is reiterated that “we must face our own realities, no imported solutions can resolve Africa’s challenges sustainably.” After all, we are reminded, “Watanzania Tunaweza”/Tanzanians are capable – and “mabeberu siyo wajomba zetu"/imperialists are not our uncles”. This clarion call is, in essence, a call for the country to devise solutions to its own problems, instead of relying on “imported” ideas. EITI is, of course, one of them.
There is another critical concern about the potential for institutionalizing transparency in the extractive industries sector, and thus the success of TEITI. It continues to be seen as a “project” for improving transparency in the government - one that will end at some point. This means that it remains peripheral in government plans, and when reforms are undertaken, such as we have seen recently, they are not necessarily informed, at least in part, by the desire to enhance its effectiveness. Reforms (2017/2018) in the extractives sector have shown us that the fifth phase government is more interested in (and willing to explore) government-centred (horizontal) accountability. Hence,  there has been a limited effort to establish a balance between internal checks and balances, on the one hand, and citizen-led initiatives, on the other hand. This is despite the fact that, through the Minister for Minerals - Hon. Doto Biteko -  the government issued TEITA's regulations in early 2019.
The preference for government-centred accountability, especially in the extractives sector, is embodied by the recent provision that “allows” the Parliament to review extractive industry contracts. After all, the ruling party has the majority in Parliament.
Ironically, implementation has stalled, but probably not for lack of a good reason! Those against the parliamentary review of contracts point to the doctrine of “separation of powers”. Their key argument is that the parliament has to exercise oversight and thus, if it involved itself in review and approval of contracts, it would be less independent in questioning and holding the government to account. One government lawyer offered to simplify it by saying, “Ni kama mlaji ambaye ameamua kupika. Chakula kikiharibika atamlalamikia nani”? (It`s like a customer who has decided to cook. If the food is messed up, who then will he lodge complaints to?) There are other concerns around “politicization” of issues, and the capability of parliamentarians to fully comprehend the contents. There is also a view that some agreements involve a huge deal of “balancing”, some of which may be hard to make the Parliament grasp.

The financing of TEITI is another area that raises questions about its future – if there is any! The initiative remains heavily reliant on “development partners” – the likes of Canada, European Union, and the World Bank. Its implementation reports show that government contribution has often hovered around 10% to 20% of annual budgets, and at times limited funding has led to significant delays in publication of reconciliation reports. One can easily tell what a government priority is, by looking at where its money goes.

Tanzania`s EITI agenda is struggling to transition from token disclosures to meaningful institutionalization, in spite of genuine and sustained efforts by civil society organizations, progressive media and extractive industry activists. Recent reforms have shown that the government doesn`t view limited transparency as a primary problem or central part of it`s quest to capture a fair share of benefits from the sector. There is a possibility that even notable achievements that have been seen to date may be reversed. Most importantly, the government is interested more in domestic solutions. 
Probably it is time for stakeholders to start exploring alternative options, in case the undesirable happens. For now, the potential for TEITI to make a significant contribution to improving accountability in the sector seems quite limited. This reality makes its future quite uncertain.


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