Open Government Partnership Presentation July 9, 2014 Paul Mussenden, Department of the Interior, Deputy Assistant Secretary, Natural Resources Revenue Management

Open Government Partnership “In all parts of the world, we see the promise of innovation to make government more open and accountable. Now, we must build on that progress. And when we gather back here next year, we should bring specific commitments to promote transparency; to fight corruption; to energize civic engagement; and to leverage new technologies so that we strengthen the foundation of freedom in our countries, while living up to ideals that can light the world.” - Remarks by President Barack Obama in launching the OGP at the 2011 United Nations General Assembly OGP and EITI   The desire and commitment to improve governance and increase citizen participation prompted President Obama and the leaders of seven other governments to launch the global Open Government Partnership on the margins of the United Nations in New York in September 2011.   This work began in 2010, when President Obama challenged countries around the world, including the U.S., to come back a year later with specific commitments to strengthen the foundations of freedom in our countries – to develop country action plans that promote transparency, fight corruption, energize civil society, and leverage new technologies.  This was to be done in a true partnership with civil society.   In September 2011, President Obama announced the U.S. commitment to implement the Extractive Industries Transparency Initiative (EITI) as a featured deliverable of the U.S. Open Government National Action Plan. The EITI, as the name suggests, focuses on bringing transparency to the revenue flows from extractive industries as a tool to address what is commonly referred to as the resource rich curse –which is an economic paradox where many resource-rich developing countries have underperformed compared to their resource-poor counterparts because these resources are too often accompanied by mismanagement, corruption, weak accountability and poverty. The Administration committed, in the first U.S. OGP National Action Plan to: implement the EITI to ensure that taxpayers receive every dollar due for extraction of our natural resources, building on reforms in the management of our natural resources; and work in partnership with industry and citizens to develop a plan to disclose relevant information, creating additional “sunshine” for the process of collecting revenues from natural resource extraction and enhancing the accountability and transparency of our revenue collection efforts. In the second US OGP National Action Plan, the U.S continued to work toward EITI candidacy, including seeking public comment and feedback on the Federal Government’s candidacy application and committed to publish the first United States EITI report in 2015 and to achieve EITI compliance in 2016. In doing so the Administration also committed to: disclose additional revenues on geothermal and renewable energy; unilaterally disclose all payments received by the U.S. Department of Interior; create a process to discuss future disclosure of timber revenues; and promote the development of innovative open data tools that make extractive data more meaningful for and accessible to the American people.

The EITI Standard The Extractive Industries Transparency Initiative, or EITI, is a global standard that promotes revenue transparency and accountability in the extractive sector. http://eiti.org/eiti/principles What is EITI?   The EITI Standard is a voluntary, global effort designed to strengthen transparency, accountability and public trust for the revenues paid and received for a country’s oil, gas and mineral resources. The EITI Standard contains the set of requirements that countries need to meet in order to be recognized first as an EITI Candidate and ultimately an EITI Compliant country. The Standard is overseen by the international EITI Board, with members from What is EITI? • The EITI Standard is a voluntary, global effort designed to strengthen transparency, accountability and public trust for the revenues paid and received for a country’s oil, gas and mineral resources. • The EITI Standard contains the set of requirements that countries need to meet in order to be recognized first as an EITI Candidate and ultimately an EITI Compliant country. The Standard is overseen by the international EITI Board, with members from governments, companies and civil society. • Countries that follow the standard publish a report in which governments and companies publicly disclose to an independent reconciler – which is usually an auditing firm – royalties, rents, bonuses, taxes and other payments from oil, gas, and mining resources. • To the extent those two reported numbers do not match, the independent reconciler determines and resolves any discrepancies, and the information is published in an EITI report. • The centerpiece of EITI implementation is the Multi-Stakeholder Group (MSG) – the consensus-based decision making body comprised of government, industry and civil society that is responsible for overseeing implementation and deciding the scope and types of revenues that will be reported. governments, companies and civil society. Countries that follow the standard publish a report in which governments and companies publicly disclose to an independent reconciler – which is usually an auditing firm – royalties, rents, bonuses, taxes and other payments from oil, gas, and mining resources. To the extent those two reported numbers do not match, the independent reconciler determines and resolves any discrepancies, and the information is published in an EITI report. The centerpiece of EITI implementation is the Multi-Stakeholder Group (MSG) – the consensus-based decision making body comprised of government, industry and civil society that is responsible for overseeing implementation and deciding the scope and types of revenues that will be reported.

Countries that Participate in EITI 4 OECD Countries Recently Announced Their Intention to Implement EITI: France, *Germany, Italy, United Kingdom 16 EITI Candidate Countries: Afghanistan, Chad, Ethiopia, Honduras, Indonesia, Madagascar, Myanmar, Papua New Guinea, São Tomé and Príncipe, Senegal, Solomon Islands, Tajikistan, The Philippines, Trinidad and Tobago, Ukraine and UNITED STATES 29 EITI Compliant Countries: Albania, Azerbaijan, Burkina Faso, Cameroon, Central African Republic, Côte d’Ivoire, Democratic Republic of Congo, Ghana, Guatemala, Guinea, Iraq, Kazakhstan, Kyrgyz Republic, Liberia, Mali, Mauritania, Mongolia, Mozambique, Niger, Nigeria, Norway, Peru, Republic of Congo, Sierra Leone, Tanzania, Timor-Leste, Togo, Yemen, and Zambia *Pilot Implementation Country is currently suspended International EITI Developments   Currently, there are 16 EITI Candidate Countries, 29 EITI Compliant Countries and 35 Countries have published EITI Reports.. Accomplishing one of the President’s primary goals of leading by example, G7 members France, Italy, Germany, and the UK are now following the U.S. and preparing candidacy applications this year. The EITI International Board has met 27 times since December 2007, the most recent being this month in Mexico City, Mexico. SIGN-UP CANDIDACY COMPLIANCE

Stakeholder Assessment – 2012 Consensus Building Institute – 3P neutral Highlighted potential benefits and challenges Considerations for convening Multi‐Stakeholder Group Provided recommendations Purpose of MSG Size & Sector Balance Role of Tribes, individual Indian mineral owners, States Selection criteria Administrative and legal options USEITI Implementation • In the Spring of 2012, the Department of the Interior, designated by the Administration as the lead Agency for implementing USEITI, contracted with the Consensus Building Institute, a third party neutral facilitator to conduct a stakeholder assessment to inform USEITI. CBI facilitated 2 rounds of public listening sessions and conducted 66 independent interviews across sectors. • CBI then provided recommendations regarding the initial scope and direction of EITI implementation in the US, including the criteria, scope and function of an MSG and the roles and involvement of tribes, allottees and states. • In a parallel or analogous ongoing effort, the U.S. EITI Inter-agency Policy Committee, represented by USAID, Energy, Treasury, Small Business Administration, State, Interior, Treasury, Forest Service, and NSS, meets periodically to discuss USEITI implementation, milestones, and major decision points to facilitate government-wide awareness and collaboration of the initiative.

MSG Formation Membership Charter Terms of Reference 21 Members and 20 Alternates - broad range of organizations and stakeholder interests Charter Signed by Secretary of the Interior, July 24, 2012 2-Year, renewable periods Collaborative and consensus-based oversight of USEITI implementation. Forum for consultation among stakeholders Committee’s advice / recommendations - public. Terms of Reference Scope, Membership, Leadership, Decision-making, Meetings, Responsibilities In July 2012, then Secretary Ken Salazar established the USEITI MSG as a Federal Advisory Committee and convened its first meeting in February 2013. • Membership on the MSG includes several oil and gas companies and trade organizations, as well as civil society organizations and members of the public and academia. • The design of EITI implementation, including the components of the reconciliation process, is country-specific, and is developed and overseen by the MSG through a multi-year, consensus-based effort.

The Application Scope – Commodities, Revenue Streams, Materiality Threshold, Unilateral Disclosure Third Party Reconciliation of Relevant U.S. Federal Government Revenues Publicly Sourced Narrative Adapted Implementation USEITI Candidacy Application The USEITI MSG reached unanimous consensus on the following scope for initial USEITI reporting: Extractive commodities (oil, gas, coal, other leasable minerals, non-fuel minerals, geothermal and other renewables); Revenue streams (rents, royalties, bonuses and fees collected by DOI); Materiality threshold for company reporting and reconciliation (for the initial report, $50 million or approximately 80% of the revenues collected by ONRR, and for the second report, $20 million, or approximately 90% of the revenues collected by ONRR); and Unilateral Disclosure (for all in-scope commodities, DOI will disclose all reported revenues disaggregated to the company level to the extent allowable by law) and disaggregated by commodity (oil, gas, coal, other) and revenue stream (royalties, rents, bonuses, other). 100% of extractive revenues collected by Interior that are determined to be within scope by the MSG, regardless of the materiality threshold. Third Party Reconciliation Compare data from companies on their payments to government with data from government on revenues collected from companies. Reconciliation of relevant U.S. Federal Government revenues, such as rents, royalties, bonuses, and fees collected by: Bureau of Land Management (BLM), Office of Natural Resources Revenues (ONRR), Office of Surface Mining Reclamation and Enforcement (OSM) Federal tax revenues will be included in the USEITI report, but the MSG is still working on the details of the inclusion. Publicly Sourced Narrative Will provide easy access to available data available from U.S. government agencies and other authoritative sources. Gives context and a well-rounded picture of the extractive industries in the U.S. Include information for additional types of natural resources that will not be reconciled under USEITI. Consistent with the goals and standards established by the September 20, 2011, U.S. National Action Plan for the Open Government Partnership. Adapted Implementation – USEITI reporting will exceed Rule 4.2(e)'s requirements by reporting 100% of extractives-specific revenues collected by the federal government and transferred to states as required by law.  In addition, USEITI will report on all legally-required transfers of extractive revenues from the federal government to state governments and local government units. Rule 4.2(d)'s requirement to disclose material extractive revenues directly collected by states through a two-phased approach: Under Phase I, publically-available information about state extractives revenue collection will be included in USEITI reports; Phase II involves encouraging states to fully participate in USEITI through a voluntary “opt-in” process. 

Implementation to Candidacy February 2013: First meeting of the USEITI Federal Advisory Committee (Multi- Stakeholder Group) September 18 - November 8, 2013: Public and Tribal outreach; sought public comments on Draft Candidacy Application December 2013: Finalized and submitted US Candidacy Application March 2014: Candidate Country Status In December, on behalf of the USEITI MSG, Secretary Jewel submitted the USEITI Candidacy Application to the EITI International Board.   The U.S. application was approved and U.S. became an EITI Candidate County on March 19, 2014. Approval of the U.S. Candidacy Application by the international EITI Board marks a significant milestone and demonstrates this Administration’s continued commitment to transparency and accountability. Implementing EITI is unprecedented for a country as large and complex as the United States: We have thousands of companies in the extractives sector; We have a federal system with state and tribal governments; We have a mixture of public, state and private lands where extraction occurs; And we have a population of more than 300 million active and vocal citizens with very diverse points of view.

Next Steps / Collaboration September 2014: Next USEITI MSG Advisory Committee Meeting December 2014: Implement USEITI Work Plan; DOI On-line Data Pilot December 2015: Publish first USEITI Report December 2016: Publish second USEITI Report March 2017: Complete validation and achieve compliance USEITI Implementation   As a result of achieving “Candidate Country” status, the U.S. must publish its first EITI Report within two years (March 2016) and complete the requirements to achieve “Compliant” status and commence a “validation” process within three years (March 2017). The timeline calls for the Department to produce the first USEITI Report by December 2015, a second Report by December 2016, and become a compliant country no later than the March 2017 deadline. This is an aggressive schedule given the inter-bureau and interagency coordination that will be required to obtain and validate the revenue and lease data from across the Department, as well as energy sector and state-level revenue data to satisfy the requirements for EITI reports. Next Steps & Opportunity for Interagency Collaboration Outreach to States and Tribes to define and develop USEITI “opt-in” processes. DOI on-Line Data Portal - Develop a robust Department of the Interior Natural Resources Revenue (DOI-NRR) website that will be used as a pilot for the future USEITI website. The development of these websites aligns with the principles of this Administration’s Project Open Data and is consistent with the goals and standards established by the U.S. National Action Plan for the Open Government Partnership.

Questions and comments Conclude the session by addressing any questions the audience might have for any of the speakers regarding the Candidacy application or the U.S. implementation of EITI.

Contact Us Written comments can be emailed to: USEITI@ios.doi.gov Or mailed to: USEITI Secretariat 1849 C Street NW MS 4211 Washington DC 20240 SECTOR CONTACT INFORMATION Industry Sector Co-Chair: Veronika Kohler Vkohler@nma.org Civil Society Sector Co-Chair: Danielle Brian Dbrian@pogo.org Government Sector Co-Chair Greg Gould Greg.Gould@onrr.gov For more information about USEITI, please visit www.doi.gov/eiti For more information about the EITI International Standard, please visit www.eiti.org