No more secrecy in mining deals, disclose beneficial owners – Malawi’s EITI commitments

No more secrecy in mining deals: companies urged to embrace EITI and disclose beneficial owners

2016-12-malawi-mining-trade-review-mweiti-companies-msg-and-beneficial-ownership-disclosure-meetings

By Chiku Jere

Days of secrecy over mining deals are now numbered as government in collaboration with other stakeholders is on its toes implementing several initiatives that will ensure transparency and accountability in the management of the country’s natural resources for the benefit of the nation.

Among other activities, stakeholders converged at Capital Hotel in Lilongwe for a workshop on Extractives Industry Transparency Initiative (EITI), which was followed up by an orientation of Extractives Companies on EITI reporting at Riverside Hotel.

Both functions were organized by the Malawi Extractives Industry Transparency (MWEITI), a vehicle established to facilitate the EITI process in Malawi.

EITI is a global Standard which requires governments to disclose receipts on tax royalties and rental payments, licences, contracts, production, among other key elements around resource extraction, while natural resources companies are required to disclose the payments they make to Government.

Malawi EITI organized the Capital Hotel workshop in conjunction with EITI international Secretariat based in Norway, while the Riverside Hotel event was made possible with financial support from GIZ.

In his opening remarks at the Capital Hotel function, which was attended by members of the civil society, the private sector and government officials, Director of Revenue Policy in the Ministry of   Finance, Economic Planning and Development Crispin Kulemeka said government is totally committed to good governance in the management of the country’s natural resources.

He explained that commitment to EITI stems from President Arthur Peter Mutharika who in June 2014 made a public declaration and subsequently made assurances to join the EITI.

Later Malawi established a Multi Stakeholder Group (MSG) with four representatives from three constituencies – the Civil Society, Government and Private Sector – and eventually an EITI Secretariat was established.

This MWEITI, which was established with the strategic goal of ensuring national sustainable development through revenue transparency, is now working towards meeting EITI requirements to attain ‘compliance’ status which guarantees membership, hence the holding of the activities,

he said.

He urged stakeholders to continue working tirelessly to ensure the country implements EITI effectively.

Kulemeka said government appreciates the technical work the EITI Multi-Stakeholder Group has done so far and also thanked the International EITI Secretariat for the support it renders to the cause.

As government we are hopeful that the EITI information will stimulate informed and evidence-based dialogue on ways of how best to utilize our finite and non-renewable   natural resources to meet national priorities outlined in the Malawi Growth and Development Strategy II,

he said.

Kulemeka also thanked the Norwegian Embassy and the World Bank for their role in funding EITI related activities in the country.

Special recognition went to GIZ for its ‘unwavering’ technical and financial support towards the EITI process.

The Capital Hotel workshop comprised two major presentations, one on the new 2016 EITI Standard ‘Beneficial Ownership Disclosure (BOD)’ of resource companies which aims at making known to the public the natural person(s) who directly or indirectly ultimately own or control extractive entity and assets.

The presentation that was made by Eddie Rich, Deputy Head and Regional Director for Africa and the Middle East for the International EITI Secretariat was subtitled ‘Revealing Who Stands Behind the Companies’.

Rich said that by revealing real owners of corporate entities, countries have managed to improve investment climate, reduce reputational and other risks, prevent corruption and illicit financial flows, improve rule of law, increase trust and accountability as well as enhance revenue collection.

Grain Malunga, Chamber of Mines Coordinator, who is also a member of MSG handled the other presentation titled ‘How to Implement the Roadmap to BOD’.

Similar presentations were also made during the Riverside Hotel workshop, however, dwelling much on orienting extractives companies on EITI reporting, with much focus on the mutual benefits that companies, government and the public attain in the course of adherence to the EITI Standard.

At this event, Malunga urged companies to look at EITI not as a burden but something that brings good corporate image to the investor.

He said participation in EITI reporting provides companies with a public podium to showcase their economic contribution to a particular country.

Communities need to know that these companies pay taxes and loyalty to government and the money is put in Account Number One and dispersed for developmental use across the country. So, by laying bare your company’s revenue transactions through EITI, the public will know how much you are contributing to the government coffers through tax and loyalty remittances,

he said.

All the sessions of both workshops were skewed on how Malawi could produce its first EITI Report that is comprehensible, reliable and timely and covers important revenue flows in a manner that could be understood by diverse audiences.

Malawi is expected to release its first EITI Report on April 22, 2017, whose information will be independently reconciled and verified by an Independent Administrator before final compilation.

Apart from fulfilling a requirement to attain ‘compliant’ status which guarantees EITI membership, the annual EITI report will also be a useful tool for all Malawians to see how the country’s natural resources are being managed, and how much revenue is being generated.

***

The article above was initially published in Malawi’s Mining & Trade Review Issue Number 44 that is circulating this December 2016.

The full edition is available for download here. This monthly publication is edited by Marcel Chimwala.

 

Advertisements

Leave a Comment, Question or Suggestion

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s