Aug 102013

YANGON – ASEAN countries including the Philippines can help protect their oil, gas and mining industries by complying with the Extractive Industries Transparency Initiative (EITI), a global standard that calls for disclosure of payments and receipts, a leading anti-corruption advocate yesterday said.

Erry Riyana Hardjapamekas, former chief executive officer of Indonesia’s Tambang Timah PT, the world’s largest tin producer, estimates that in ASEAN countries, at least 10 percent of government revenues from extractive industries are likely lost to corruption.

 “One measure to prevent corruption is the EITI because one basic thing in combatting corruption is transparency,” he told Southeast Asian journalists here.

He said that without proper disclosure, revenues from extractive industries such as oil, gas and mining, may not be maximized and instead are lost to corruption.

 “It’s difficult to measure how much corruption there is in each country but we can feel it. It could be reflected on the quality of public services,” Harjapamekas said.

Governments could show they are serious in combatting corruption through the EITI.

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“It shows how serious governments are in combatting corruption in their extractive industries,” he said.

In the region, EITI is becoming a big issue with Indonesia, the Philippines, Myanmar and Vietnam which  are all making efforts to hold companies and governments accountable for the revenues they make from extractive industries.

Marie Gay Alessandra Ordenes, the national coordinator of Philippines-EITI said in an article posted on the Philippines-EITI website that efforts to join EITI would allow Filipinos to know how much the government is really getting from mining and how much the industry is paying the government.

“Filipinos should be getting the answers to these and other questions about the extractive industries after the government formed the Philippine Extractive Industries Transparency Initiative (PH-EITI) following the issuance,” she said.

“Publication of payments will also aid local communities in monitoring the exact benefits that they are entitled to, including those under the Social Development and Management Program mandated by the Mining Act,” she also said.

Furthermore, she said EITI compliance would also make the Philippines more attractive to foreign investors.

“Participation in the EITI is expected to promote transparency among industry players and level the playing field, making the country more attractive to investors,” she said.

Helene Johansen, of the Communications Office of EITI International Secretariat said it could also prevent conflict around resource-rich areas.

 “EITI also assists in strengthening accountability and good governance, as well as promoting greater economic and political stability. This, in turn, can contribute to the prevention of conflict based around the oil, mining and gas sectors,” she said.

In an EITI workshop held in Manila in January, Philippine Finance Secretary Cesar Purisima said complying with the EITI shows that the Philippines is serious in protecting the mining industry.

 “I believe this is a crucial component on the better way forward for the mining industry,” he said.

Toward this end, Manila’s Mines and Geosciences Bureau introduced last week an online database of mining taxes, royalties and fees and charges.

However, Hardjapamekas, former commissioner of Indonesia’s Corruption Eradication Commission, said the Philippines should not only focus on mining, but also on other industries as well.

“EITI consists of mining, oil and gas – both are non-renewable energy so (the Philippines) should include not just mining but oil and gas,” he said.

At the same time, Hardjapamekas said EITI compliance is only one step in fighting corruption.

“Seriousness should also be followed up by other measures. The extractive industry is only the first step. Governments must create transparency in other sectors,” he said.

Resource-rich Myanmar aims to carry out the tasks of EITI by the end of the year.

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