Summary of PWYP Asia Pacific Regional Meeting 2018

I got the opportunity from INFID to attend PWYP Asia Pacific Regional Meeting on August 8^th, 2018 at Morrissey Hotel Jakarta. PWYP (Publish What You Pay Indonesia) is a civil society coalition for transparency and accountability of extractive resource revenues and governance of oil, gas, minerals and other natural resources. Whereas this meeting aims to facilitate experience sharing, peer learning and championing best practices on advocacy in promoting transparency, accountability and improved good governance of extractive and natural resources sector. The event had about 18 speakers and was divided into four main themes: first, EITI, Commodity Trading, and Fiscal Transparency; second, Social-Environmental Impact and Community Engagement; third, Showcase: Tools and Innovation on Extractive Industries Governance Advocacy and the last one, Anti-Corruption, Open Contract and Opening up Beneficial Ownership.

The Extractive Industries Transparency Initiative (EITI) is a standard to promote accountable and open management of oil, gas and mineral resources. In the first session, Aryanto Nugroho emphasized that EITI standard requires information along the extractive industry value chain from the point of extraction, to how the revenue makes its way through the government, and to how it benefits the public. In Indonesia, there are several problems regarding extractive industries mainly in the scope of the contract and licensing, revenue collection & fiscal policy, social economic spending & environmental and corruption. In addressing the problems, national agenda reform has been made such as ESDM GeoPortal, moratorium new license on Local Government, SIMPONI & E-PNBP (E-Payment), Minerba One Data Indonesia (MoDI), Open Budgeting (Ministry of Finance) and etc.

Nurkholis Hidayat From Lokataru highlighted the limitation of EITI report such as on how there are no specific export trading partners listed, but only destination country. Besides, he also mentioned that the level of corruption risk in the oil sector is high due to confidentiality and concentration of decision making. NRGI identified three categories where corruption risks appear, they are 1) selection of buyers, 2) negotiation of terms and 3) transfer of revenues. Juvinal Dias from PWYP Timor Leste addressed wider scope where petroleum itself has become a global challenge because no one can control the price and the reserves. Petroleum is also always become a cause of political and economic instability (Resource Curse and Dutch disease).

In the second session, Jalal, Chairperson of Advisory Board-Social Investment Indonesia explained how the narrow understanding of CSR limit company to contribute toward society. He mentioned that CSR carried out by extractive industry sector in Indonesia accept accountability but disregard sustainability performances. Many companies conduct CSR as a mere financial donation. Their practices are mostly not in accordance with the principles and expectations of the core subjects of ISO 26000. Instead of improving welfare and self-reliance, many communities surrounded by these industries are even more dependent upon resources from extractive companies.

Even though extractive companies in Indonesia may be among the first to use various international standards in the late 1990s, but, the use of international standards has been very limited until now. Therefore, it is important for the company to realize that CSR should go beyond than financial donations. These extractive industries should responsible for the impact resulting from its decisions and actions.

Specifically addressing on women, Lucy Manne, Head of Policy and Campaigns ActionAid Australia explained that mining will disadvantage women in five agendas namely food insecurity, health issues, violence, climate shocks and unpaid labor. Women’s organizations demand to promote transparency, create a binding treaty on business and human right, access to remedy, and end subsidies for fossil fuels. To decrease the potential harm, ActionAid collaborates with PWYP Australia in supporting women’s organization directly affected by fossil fuel projects and promoting open data on Australian fossil fuel. 

Mrs. Wallis Yakam, Executive Officer of Consultative Implementation and Monitoring Council, explained about the effort and outcome of CIMC as a government-mandated platform for policy dialogue between Civil Society, Private Sector and Government in Papua New Guinea. It conducts several activities to empower community leaders, create general awareness of EITI, monitor policy and set up provincial EITI focal points. CIMC enhances collaboration among stakeholders but in the implementation, it also has challenges especially on knowledge and capacity gaps, geographical challenges and weak commitment of community leaders.

Nur Hidayati, National Executive Director Wahana Lingkungan Hidup Indonesia (WALHI) brought the topic of Transparency and Participatory Environmental Impact Assessment in Extractive Industry Sector. She mentioned there should be three pillars in good environmental governance: rights to information, rights to participation, redress mechanism. Unfortunately, they are not well implemented. Based on WALHI’s study in 2015, the participation of the community is at the level of “non-participation”, at best is at “tokenism” level (using Arnstein’s Ladder of Citizen Participation). Even, the basic right of the communities, the decision in mining area allocation, is currently denied especially in Mineral and Coal Act No.4/2009.

Different with other speakers, Sreedhar from Environics Trust India explained that illegal mining is the main problems in India. Nearly 100.000 illegal mines operate in the country. As non-signatory of EITI, India depends on people’s movement who demand transparency in wage payments, led to a vibrant and diverse campaign that led to the passage of the Right to Information (RTI) Act in 2005.

In the third session, there was café talk discussion. Through this discussion, the committee introduced the participants with Indonesia Extractive Industry Data Portal. Moreover, they also demonstrated a tool to help decision makers in Indonesia especially local government to measure the benefit and disadvantages of the extractive industry and inform us about unique approach of Bantay Kita, Philippines to inform the local community about the extractive industry in the region. Bantay Kita found that one of a hindrance to promoting transparency is coming from the community leaders who mostly are unwilling to inform their own people about the company itself. So, the process and negotiation is a closed process between the company and community leader. 

In the last session of discussion, Bantay Kita explained how far the commitment of The Philippine's government to promote transparency in the extractive industry. In 2011, the Philippines co-founded the Open Government Partnership. In 2012, the Philippines committed to participate in the Extractive Industries Transparency Initiative (EITI). Through the country’s Annual EITI Report, relevant data and documents are made available at a single source. PH-EITI took another step by developing contracts portal with support from the Natural Resource Governance Institute, the World Bank, Columbia Center on Sustainable Development and the EITI MDTF through UK aid. The drive for transparency was further accelerated when President Rodrigo Duterte signed the Freedom of Information executive order, calling upon agencies to disclose public contracts and records requested by citizens.

Through this initiative, civil society in the Philippines can assess the company’s compliance with environmental regulations. Citizens may also able to validate whether mandatory social development allocations have been aligned with the local development plans of the community or not. By referring to coordinates of an approved mining area as reflected in a contract, communities can supervise and consider the benefit of having mining companies operate in their areas.

Not limited to the Philippines, Indonesia is currently strengthening the transparency in the extractive industry. KPK was declared National Movement in Rescuing Natural Resources (GNPSDA) on 19th March 2015 by 27 Ministries. TII also designed study to fill the gap by assessing the risks for corruption that hinder lawful, compliant and ethical awarding of permits in the Indonesian mining sector. The study assessed a total of 35 corruption risks in the entire process of awarding Exploration IUPs. Based on the study, 91% of the risks assessed are classified as significant and very high risks, implying that about 91% of the risks are very likely to happen and /or will have severe impacts.

Indonesia also needs to work on the issue of beneficial ownership. It is common practices in the natural resources sector, that large-scale business is hiding their beneficial owners. Indonesia’s national risk assessment of money laundering identified that the corporation threat levels (7, 01), higher than individual threat levels (6, 74). 

In Myanmar, a lack of knowledge of policymakers is one of the hindrances to support the transparency agenda. Moreover, EITI is seen as an attack on the military and its affiliate groups. State Own Enterprise (SOE) plays important role in Myanmar economy which can support democratization, peace, and stability of Myanmar but the government’s so-called “National Reconciliation” might block the process because the military is the main actor to do reconciliation.

In conclusion, this forum provides insight on how the progress of EITI implementation as well shows us what are the hindrances and achievements of civil society who promote transparency in extractive industries.