CSO Representative at the TL-MSG The role of Civil Society in the EITI process, Challenges and benefit CSO & EITI Process in Timor Leste MERICIO AKARA CSO Representative at the TL-MSG Manila, 19 January 2013

Location of Timor Leste: Southeastern Asia, northwest of Australia in the Lesser Sunda Islands at the eastern end of the Indonesian archipelago (NTT). Note: Timor Leste includes the eastern half of the island of Timor, the Oecusse (Ambeno) district on the northwest portion of the island of Timor, and the islands of Atauro and Jaco. Area of 15,007 km2. Population are 1.066,582 people (census 2010). Timor Leste has 13 districts, 65 sub-districts and 442 villages. Climate: tropical; hot, humid; distinct rainy and dry seasons. Natural resources: gold, petroleum, natural gas, manganese and marble.

?????? “…EITI is a global standard that can be use for improved transparency & accountability for the huge revenue generated by oil , gas and mineral industry to avoiding “resource curse” and improving their use in reducing poverty and generating economic growth…”. “…is a ‘world first’ in which Government, CSO & Companies are all directly involved in the development & governance of the initiative…”

Why EITI: The Paradox of Plenty Developing countries rejoice when they strike oil and gas… But the potential for good is often not realized Mineral revenues may be used for development … but in some countries there is: Low per capita growth Increased corruption Slow progress on human development Social and political instability and violence So most people don’t benefit Poverty remains – The “paradox of plenty”

EITI was created to tackle the paradox. It is … a global standard for improving transparency a partnership of governments, donors, companies, CSOs, investors, and international organizations about improving accountability of governments and companies – and for how oil gas revenues are used about reducing corruption and potential conflict by providing clear information on payments and revenues, and by involving civil society.

Why is EITI important for governance and development? EITI calls for revenue transparency – a fundamental building block of good governance Transparency: Increases accountability; reduces risk of corruption Fosters democratic debate Improves macroeconomic management Enhances access to finance To be fully effective it must be imbedded in a wider good governance process

What kinds of results are we starting to see? About 13 countries produce reports with info on company payments and government revenues Some are fiscal only, others show where there are weaknesses in the revenue collection system In some cases EITI scrutiny has encouraged payments from companies which before paid little or no tax. It can also urge governments to strengthen regulatory functions – reducing the tendency to blame companies for everything. www.eitransparency.org

Results cont’ EITI in Nigeria estimates it has saved $1bn for the country, 2004-5, by blocking loopholes & leakages It creates a “safe” space for CSO dialogue with governments & companies; less dangerous than previously polarized positions. CSOs form coalitions to build capacity and enhance understanding of oil, gas & mining companies. Encourages governments to debate with public on the appropriate use or spending of revenues. www.eitransparency.org

Benefits for civil society of EITI Better information on what companies are paying and governments receiving – absence of information often leads to civil society groups assuming the worst. Managing expectations – oil doesn’t mean instant wealth for all. Good info on revenues ensures people understand what is, and is not, going to be received. This helps people to become involved in realistic debate on how the money should be spent.

Civil society engagement in EITI CSO often form EITI Coalitions. These increase their negotiating power with government and companies. CSO are involved in designing and steering the EITI process in all countries. CSO are usually involved in selecting an audit company to reconcile payments and revenue data. CSO are vital in explaining to ordinary people why oil and Gas revenues are important and how they should be managed.

CSO & EITI Process Timor Leste

History Civil society groups formed a Core Group for Transparency in 2005 (8 organizations ). At the same time, such Transparency Based Groups involved TL-NGO Forum in EITI process. Negotiated with government and companies 2005-2006 on the form EITI would take. MoU was signed by all groups, end of 2007 Coalition members sit on steering group that oversees EITI in Timor Leste since 2007 to date CSO involved in selecting the audit company which reconciles payments and revenue data.

History – cont’ Coalition gets funds from supporters and donors based on it annual work plan. Its staff and members carry out EITI activities: NGO Forum organize an election assembly to select SCO Representative at TL-EITI Multi Stake Holders Public awareness and media campaigns, conference etc to promote EITI and to lobby for more information and transparency. Capacity building training for NGOs, Parliament Members and media on the oil sector and the importance of transparency. Analyzing EITI reports and VALIDATION PROCESS?

When TL Become Compliant Country? Objective of Validation: For candidate countries; validation process is to check about how the EITI process being done? For Compliant countries; validation process is to check weather its country implemented and full filled all of the EITI criteria (to check the status).

Validation Process? Timor Leste was conducted its validation process at the end of 2009. Timor Leste’s validation report was sanded to EITI Board in April 2010, and it was decided that TL became a compliant Country since then Timor Leste has produced 4 reports for 2008-2011. On December 2012, TL-MSG has launched EITI Report for 2010-2011.

OBRIGADO & Visit Timor Leste!