sharing in governance of extractive industries
They go by different names but share the same higher principles. Most people don't know they exist but there they are, built into every national government, working tirelessly to ensure public resources are collected and spent as they were meant to be. They are supreme audit institutions, and they are the guardians of public financial management and natural resource governance.
Last week, I had the honor of participating in the Third Annual Meeting of the INTOSAI Working Group on the Audit of E... in Mombasa, Kenya. The meeting was attended by SAI officials from all over the world, committed to strengthening their role in natural resource governance. Our discussions covered many of the most pressing issues of the moment (commodity price volatility, economic diversification, artisanal mining, public-private partnerships...) and examined the implications for SAIs’ work.
The session I lead focused on the factors that help or hinder SAI effectiveness in resource revenue oversight. This included things like legal authority, independence, capacity, leadership, and external relationships and support. In the group discussion, one auditor general stressed how common it is for constitutionally mandated access rights to be ignored by auditees, particularly around sensitive information. Another official lamented excessive bureaucracy that delayed audit reports to the point of uselessness. Others flagged parliamentary indifference as a major challenge, and the danger of having one auditee responsible for releasing operating funds and a second auditee responsible for approving new hires.
One intervention in particular really struck me: the political will of leadership is everything. A SAI can have all the advantages of in-depth technical expertise, sufficient resources, a comprehensive legal mandate, and a strong auditor general ready to speak out on restricted access and damning findings. But if the head of government doesn't acknowledge and support the critical role of the SAI, impact will likely be limited. This makes it critical that resource governance practitioners understand the basics of SAIs and pay attention to their work. The following is a starter guide on SAIs and resource governance:
NRGI is already working with SAIs in a few of our country programs and through our engagement with the WGEI. They are also covered (albeit in a small way) in the forthcoming Resource Governance Index and the Natural Resource Charter benchmarking framework. But the natural resource governance community can and should do more to support the guardian work of SAIs, and last week’s WGEI event was an important rallying point that I am happy to have been a part of.
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