I think this is step in the right direction. No longer should countries and corporations hide under the veil of secrecy to conduct corrupt act.

Now, this is just an endorsement - what would make developing countries, who are often are the end of allowing foreign companies to bribe and have their, to support this endorsement and thus initiate legislation to enshrine this within their constitution. The G8 must take this a step further and provide specific punishments for countries who do not follow up with an appropriate law within their countries.

We are watching.

Here's a caveat on Vanessa's excellent posting on the G8's remarkable decision on extractive industry transparency:

While we all welcome that timely decision, we need to be cautious on what we prescribe for the developing country environment and be mindful of the political economies.

Since most of these developing countries are still quite fragile states as a result of

   (a) recent wars or political unrests,

   (b) extremenly very high illiteracy rates ( e.g Sierra Leone has 80%)

   (c) the influence of etnicity on electoral politics

   (d) the inexperience of the politicians in governance--remember majority of the politicians were but yesterday just ordinary headmasters up in their constituencies or union functionaries.

   (e) majority of the population are unaware that government services are not free and have to be paid for.

Therefore all these adverse conditions are potential powder kegs!

Here's a case in point: several years ago, Lbya's Khaddafi visited Sierra Leone and while he was addressing the crowd in Freetown he deviated from the official script and asked the crowd if it  were aware that he'd given the government of Sierra Leone tons of rice for the country.

Guess what happened?

The next day the mobs stormed the city rice stores and routed them alledging that the rice in those shops were their own given to them by Gaddafi. In fact that single incidence led to tthe voting out of power a competent government. The consequencies can be seen right now in the country.

And imagine in any of the poor developing countries a mining company announces that it has given the government in power millions of money. All it requires is one "journalist" or an indepent radio announcer to alledge that a particular government minister is building a house for one of his concubines. If the boys in khakis don't head to state house, the mob will be out and about rioting.

My point is, the stability of those developing and fragile countries supersedes the desire  for irresponsible release of government transaction information. Even in the mother of all democracies-the USA, for security reasons, certain information is witheld from the citizens until the appropriate times.

Besides, majority of those countries are heavily indebted; sometimes the government may have to use those foreign company disbursement to pay down some of those debts. The population may not appreciate or believe that; it will assume the ministres are "eating our money". Such unsophiscated populace would prefer to see that money used to bring in free rice, etc.

What needs to be done is that those foreign companies become partners to those "young" governments to advise and guide them on sustainable national and local ecenomic development pathways.

Good job Vanessa!

Eng. Ahmed Finoh, MPA

Durham, North Carolina,

USA

Hi Ahmed,

I understand where you are coming from but beg to disagree with you.

1. What we are talking about here is the "mandatory requirements for extractive companies to disclose payments to governments". This is totally different from the "Even in the mother of all democracies-the USA, for security reasons, certain information is witheld from the citizens until the appropriate times.

I agree that certain information needs to be withheld but what has held most developing countries back, particularly African countries, is corruption - the ability of government officials to use government funds (not known to the public) for private needs.

Information we are told is power. For more than 50 years Nigeria has been pumping and selling oil but its citizens can't tell how much has been realised from the sale of oil. What is only publicly available is  how much has been stolen so far. If the people knew, every month, how much the oil companies pay and are able to ask their leaders questions about this, I strongly believe this will lead to some measure of accountability.

At the end of the day, this is public funds and not funds meant for some individual or private enterprise, thus, the people reserve the right to know how much is coming into the government coffers and how much is distributed to each tier of the government as the case may be.

You said "the stability of those developing and fragile countries supersedes the desire  for irresponsible release of government transaction information." I agree with you however, don't you think it is the systemic corruption that has contributed to these countries' fragile states? Do we continue by still denying citizens information about revenue from extractive industries? Far from it.

I also take issue with this statement "What needs to be done is that those foreign companies become partners to those "young" governments to advise and guide them on sustainable national and local ecenomic development pathways."

What you are invariably saying is that the 'customer' should assist the 'seller' in putting his house in order. Do you really think the customer would be unbiased in his advice?

I think the government should be true to its responsibilities and set strategic guidelines that foreign companies should follow. The government should set guidelines on corporate social responsibilities for any company that wants to be involved in the extractive industries. These guidelines should define the role of the companies in doing business as well as developing the community and ensuring capacity building. The guideline should be part of the contract signed by these companies a breach of which would lead to suspension of their activities or outright expulsion.

The government has to play its regulatory role at the same time, the citizens need to watch the government to ensure that what belongs to all is not used for one person's selfish needs.

Thanks.

 Emeka:

 Greetings and thanks for your excellent comments on my posting.

1. "I understand where you're coming from.."

     Where I am coming from is over 50 years of living and breathing the insanity that has been going  on the continent of Africa from pre-colonial times when there was optimism everywhere to post-colonial years of carnage and disillusionment. I have seen it all; that's why I am very passionate about what is going on at the moment on my continent. I would've thought that by now Africa would produce visionary leaders who care about their peoples' welfare rather than making themselves look larger than life.

Senegal, and one time Ivory Coast where the exception in terms of good leadership on the continent.

2. ".....industries to disclose payments to governments."

     Name me a country in the West where industries line up every month to disclose how much amount of money they remit to their goverments?  Or walk down the main streets of any major city and ask any citizen to tell you how much the coal mining industry remits to their governments monthly. What the citizen cares most about is that public services are delivered as expected in return for his/her tax payments to the government!

3. "...more than 50 years Nigeria has been pumping oil.....the citizen does not know..."

 But Nigeria has some of the best institutions of higher learning in the world,as an example. Does any Nigerian citizen know how much it costs annually to operate those excellent institutions? Or should they bother with the cost or their efficiency?

4. "....particularly African countries is corruption..."

     I'll rather call it ignorance or incompetence rather that corruption per se.

     In the larger scheme of things, how much does a certain government minister or two steal public funds to collapse a country's whole annual budget? Many times these government officials,in their enthusiasm to secure investment commitments from foreign investors inadvertently or unknowingly  short-sell their countries by offering large concessions to the investors. By the time this is realized many years after, much needed revenue has been drained away from the country.

5. "....what you're saying invariably is that the "customer" should assist the "seller"

     Exactly, that's what they term "feedback" in a competitive market place. The seller/producer obtains information from the customer about its product as compared with its competitors in order to maximize sales and profits. Yes, the customer is here helping the seller/producer.

My point Emeka, is, that  any one who sincerely cares about those (African) developing countries needs to emphasize and assist in the strenghtening of the institutions of governance and enabling them to become effective in delivering public services. There's sufficient laws on the books in those countries to  twart the much talked about corription these days. Creation of parallel institutions such as anti-corruption commissions become nothing more than political victimisation organisms or kangorro courts to please the World Bank and generous big western "uncles".

 You realize that now there's emerged a plethora of NGOs purporting to assist developing countries in every way. I wish all theses efforts could be synergized into some massive millinium literacy  goal that by the turn of the century, every child will have access to quality education and healthcare, everywhere on the continent of Africa. Within a lifetime, I am sure, the continent will emerge out of this perpectual cycle of underdevelopment and instability.

What do you think?

Ahmed Finoh

USA 

Gentlemen - If I may exercise my GOXI moderator's privilege to step into this vibrant discussion:

Ahmed raises an interesting point about the expectations risk, which, in my view, has not been adequately addressed in the discourse around this movement. It feeds into the broader question of how much of EI contracts should be made public, given that these are legal documents with multiple clauses that can be erroneously taken out of context--or to score political points. 

That said, one could argue that the expectations risk on the national level is not much different from that with the EITI. One of the real game-changing elements here may be that observers can now associate amounts with specific companies, so, an increased risk of upheaval, if any, will probably be local. Another game-changing element is that host countries cannot opt out, as is the case with EITI. 

I am keen to hear your thoughts on these points. 

Kobina, Emeka et al. :

Thanks for the insightful and healthy discourse.

Kobina wrote:

 "....can be erroneously taken out of context--or to score political points."

This is what scares me about the extreme  emphasis on disclosures of money exchanges between host governments and companies in poor developing multi-ethnic, multi-religous countries.

The intentions of the Transparency movements are good intentions under ideal conditions, as abtly put forward here by Vanessa:

 (1)   " This [G8 announcement] promises investors and citizens new tools to hold companies and governments accountable" ,

 (2)   " ....help shine light on whether countries are getting a fair share from their extarcted resources." ,

 and (3)  " .....where profits are generated and whether companies are paying what they should."

 In order to avert or minimize any adverse [.." local" (Kobina)] social or political fall-outs  from public reporting of monies remitted to governments, extractive companies should be encouraged to become social entrepreneurs by investing in the locality of their operations.

 I say investing , because I consider giving scholarships to local kids, reconstructing  local schools, providing village water and sanitation facilities to local communities separate from the mining companies' obligation of  remediating  any environmental and health hazards due to their normal mining operations. 

How will the transparency requirements be ensured and who will do it?

Ahmed Finoh

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