The Trinidad and Tobago Extractive Industries Transparency Initiative (TTEITI)

For the past three years the Extractive Industries Transparency Initiative (EITI) International Board has advocated disclosure of the names of the beneficial owners of oil, gas and mining companies as a further step towards achieving transparency and accountability in the extractive industries. In February 2016, at the 7th EITI Global Conference in Lima, Peru, attended by a delegation from TTEITI, the EITI Standard 2016 was adopted and included a new requirement that, by 1st January 2020, all EITI implementing countries must publish a Beneficial Ownership Register.

We of the TTEITI saw that requirement as a big challenge but were heartened when T&T’s Prime Minister, Dr. Keith Rowley, while addressing world leaders at the Anti-Corruption Summit 2016 in London on 12th May said, among other things:

‘Trinidad and Tobago is committed to the fight against the scourge of corruption and to pursuing those that have engaged in acts of corruption, with a goal of successful prosecution and recovering as many assets that are the fruits of corrupt acts for the benefit of the Citizens of Trinidad and Tobago.

“Trinidad and Tobago is open and committed to assisting its international partners in the fight against corruption. Trinidad and Tobago will work towards the establishing of a registry of company beneficial ownership information. Trinidad and Tobago commits to ensuring that law enforcement agencies have full and effective access to beneficial ownership information for companies and other legal entities registered within its jurisdiction.”

Clearly Dr. Rowley and his Government are on the same page as the EITI. Therefore, TTEITI’s aim of publishing its first Beneficial Ownership Registry during 2016, as reported in the TTEITI Newsletter No. 6, can expect Government’s support.

Beneficial ownership
Underlying the EITI requirement of beneficial ownership disclosure is the fact that, whereas transparency about governments’ revenues from the extractive sectors is important for accountability, it does not tell the whole story. Equally important is who owns and ultimately profits from the activities of the oil, gas and mining companies.

The EITI Standard requires that implementing countries maintain a publicly available register of the beneficial owners of the corporate entity(ies) that bid for, operate or invest in extractive assets, including the identity(ies) of their beneficial owner(s), the level of ownership and details about how ownership or control is exerted. Where possible, beneficial ownership information should be incorporated in existing filings by companies to corporate regulators, stock exchanges or agencies regulating extractive industry licensing.

EITI Chair, Fredrik Reinfeldt, said at the London Summit, “EITI members are showing leadership on beneficial ownership disclosure.” That issue was among the central issues of the Summit, and Heads of State, senior industry and civil society leaders discussed it, among others, and strategies were proposed for international cooperation to tackle it.

“The EITI is the global gold standard for resource revenue transparency. Our EITI Reports help unearth critical information on taxes paid by extractive companies that were not previously available in the public domain. The EITI also offers valuable contextual information on our extractive sectors, and helps citizens to better understand these sectors that are the cornerstone of our national economy”. Mrs. Nicole Olivierre, the Minister of Energy and Energy Industries, spoke those words at the TTEITI’s Roadshow event that was held in Tobago on 28th June. The TTEITI was also honoured to have her deliver the Feature Address at the Roadshow event that was held in Sangre Grande for the mining sector in April, where she also vocalized her commitment to the Trinidad and Tobago EITI.

Even though the target audience for both Roadshow events was different, the message was essentially the same. We want to increase the awareness of the EITI among all stakeholders and have them use the reports as a tool to educate themselves about activities in the extractive sectors and for promoting policy reform and greater transparency and accountability within the extractive sectors. This sentiment was also echoed by the Minister when she stated that “EITI is more than just an accounting exercise, as it can help us start a conversation about long term reform and link us to global transparency best practice.”

In order to make EITI data more accessible and easily assimilated, the TTEITI is planning some changes. It starts with our website. A new revamped website will be launched in August. Not only will it be more user-friendly but we will be also launching an Open Data Portal which will make it easier for researchers, students and the general public to manipulate the data and see trends. The website will also make it easier for visitors to provide feedback to the TTEITI Secretariat. Look out for the new website and have your say!

Changes in the new EITI Standard 2016 mean that new information will be made public. Persons will be able to see who are the real owners of companies with our Beneficial Owner Registry as well as a listing of all Production Sharing Contracts (PSCs) that exists in Trinidad and Tobago with our License Registry. This new information will be available on our new website.

Last but not least, you can look out for two years’ worth of information as our next EITI Report covers fiscals 2014 and 2015. This report will be published by 30th September. It will also contain information from the TTEITI’s Mining Sector Pilot Study, whereby the finances of a few mining companies will be reconciled for the very first time in Trinidad and Tobago. This Pilot Study will allow us to identify and find solutions to shortcomings or obstacles within the mining sector so as to facilitate future EITI reporting.

There’s a lot of new data to look forward to from the TTEITI and we invite your feedback.

Earlier this year, the headlines of the foreign and local mainstream and social media got a reprieve from terrorist attacks by the breaking news of ‘the Panama Papers’ that overnight turned the Panamanian law firm Mossack Fonseca into a household name. Approximately 11.5 million documents were leaked that revealed that the firm had registered annually nearly 20,000 shell companies on behalf of persons in influential positions to hide their identity and conceal their true wealth. Some persons used those companies to make legitimate investments and others to facilitate corrupt payments, launder money and evade the payment of taxes.

There is a general feeling that the Panama Papers revelations are only the tip of the iceberg. The International Monetary Fund (IMF) reports that “every year US$200 billion of untaxed income is taken out of poor countries by international corporations operating in those countries, which represents around 50% more than the total they receive in aid from rich countries. Tax abuse by multinational corporations increases the tax burden on other taxpayers, violates the corporations’ civic obligations, robs developed and developing countries of critical resources to fight poverty and fund public services, exacerbates income inequality, and increases developing country reliance on foreign assistance.”

The need for this degree of transparency was clearly demonstrated by one of the many stories coming out from the Panama Papers revelations. In Uganda, a country in which most of its citizens live on less than US$1.45 a day, an oil company (not operating in T&T) based in Jersey (a British crown dependency) used Mossack Fonseca’s services to move its business registration and assets from the Bahamas to Mauritius. This was in an attempt to avoid paying US$400 million in capital gains tax to the government in 2010 after it sold its 50% share in certain Uganda’s oilfields for US$1.5 billion.

What is the link between the Panama Papers and the Extractive Industries Transparency Initiative (EITI)? Since 2013, long before the revelations of the Panama Papers, the EITI Board began advocating the need for EITI implementing countries to identify and publish the names of the beneficial owners of extractive companies. The TTEITI Steering Committee proposes to publish T&T’s first Beneficial Ownership Register very shortly and so avoid some of the practices revealed by the Panama Papers on the use of hidden ownerships to mask corruption–a clear benefit that T&T will enjoy from such public disclosures.

The TTEITI’s commitment to the publication of T&T’s first Beneficial Ownership Registry goes hand in hand with the pledge made by the Prime Minister of Trinidad and Tobago, in May 2016, at the Anti-Corruption Summit in London. He pledged that this country would establish a registry of company beneficial ownership information. He also committed to ensuring that law enforcement agencies have full and effective access to this beneficial ownership information for those companies and other legal entities registered within our jurisdiction.

It is important to note that EITI Beneficial Ownership reporting mandates the disclosure of not only the names of “the natural person(s) who, directly or indirectly, ultimately own(s) or control(s) a corporate entity, a license or other property”, but also the identity of Politically Exposed Persons (PEPs), which the TTEITI Steering Committee defines as “an individual who is or has been entrusted with a prominent political function. These include foreign and local political figures and extend to their immediate family members and close associates.”

The lesson to be learnt from the Panama Papers by those engaged in EITI implementation is that there is no such thing as too much transparency and that, whereas transparency is not an end in itself, it is the best means of protecting the people’s patrimony. Whenever and wherever high profile persons are implicated in wrongful acts, such as those revealed by the Panama Papers, they must be held accountable for their actions and appropriate consequences meted out to them according the country’s laws.

Look out for T&T’s first Beneficial Ownership Registry which will be published soon on our website:

The Trinidad and Tobago Extractive Industries Transparency Initiative (TTEITI) is mandated by the requirements of the EITI Standard to produce an Annual Activity Report by the end of June. Following that guideline, TTEITI’s Annual Activity Report (2015-16) was published on June 29th, 2016. This report records activities and events undertaken by the TTEITI Steering Committee for the year.

The purpose of the EITI is to promote transparency and accountability in the extractive sectors (oil, gas and mining). This is done by disclosing how much revenue governments receive by the extractive sector companies and how much companies pay to governments and, if there is any discrepancy, explain why.

Throughout the year under review, the TTEITI Steering Committee has shown continued progress and accomplished many goals. One goal, in particular, was that in January 2015, Trinidad and Tobago gained Compliant Country status from the International EITI Board. For Trinidad and Tobago, this means that we have satisfied the requirements of the EITI Standard and have put in place the necessary checks and balances to ensure a satisfactory level of disclosure and openness in the management of the country’s natural resources in the extractive sectors.

In 2015/2016, the TTEITI Steering Committee and Secretariat continued to engage in activities to increase awareness of the EITI implementation process among its main stakeholder groups: civil society, the public, Government and the energy and mining sectors. Those outreach sessions generally focused on the findings of the EITI Reports and ways in which the data could be used by civil society to promote and advocate for better transparency and accountability by Government and companies.

The TTEITI Steering Committee hosted a Roadshow event at the Arthur Lok Jack Graduate School of Business. The event was well attended and pioneers in the oil and gas industries, including two former Ministers of Energy, addressed the audience and advanced the promotion of transparency in the extractive sectors.

The TTEITI also participated in the Energy Chamber’s Annual Energy Conferences. In 2015, the Chair of the EITI International Board, Ms. Clair Short, delivered a Feature Address. In 2016, EITI Regional Director Dr. Francisco Paris delivered an address. Also in 2015, the TTEITI Steering Committee collaborated with the Canadian High Commission, the Arthur Lok Jack Graduate School of Business and the Association of Chartered and Certified Accountants to host three capacity building workshops for the mining sector.

In October 2015, the TTEITI Steering Committee publicly launched its third annual EITI Report for fiscal 2013. At the launch, the new Minister of Energy & Energy Industries, Ms. Nicole Olivierre, gave her maiden speech as Minister and expressed her full support for the EITI.

In 2015 and 2016, the TTEITI Secretariat continued its participation in the Prosperity Fund Project, funded by the British High Commission, in collaboration with The University of the West Indies Trade and Economic Development Unit (TEDU) that was started in 2014. This project targeted CARICOM countries: Jamaica, Suriname and Guyana to introduce them to the benefits of implementing the EITI. This project came to a close in March 2016 with a regional symposium in Guyana, which left Guyana poised to complete its preparation for applying for EITI membership before the end of 2016.

The Heritage and Stabilization Fund
In a Friday 10th June presentation to the Parliament to explain the Government’s decision to withdraw $US 375 million from the Heritage and Stabilization Fund, Minister of Finance, Colm Imbert, hinted that the Government may consider having two separate funds i.e. a Heritage Fund and a Stabilization Fund. If this is the future approach, then young people must give their perspective on whether or not the current fund should be separated or remain as is. If the approach is the former, then what should be the explicit criteria for withdrawal from the funds?Government Assistance for Tertiary Education (GATE)
Government is expected to deliberate on the findings of a recently concluded review of the GATE programme from a 16-member Task Force that was commissioned by the Minister of Education, Anthony Garcia, in March 2016. The Task Force is headed by Mr. Errol Simms of the University of the West Indies. This review was obviously prompted by declining Government revenue streams (mainly from the Energy Sector), concerns about the abuse of the funds, and students not fulfilling their obligation to work for 2 years in Trinidad and Tobago. Whatever the outcome of the eagerly anticipated Government deliberations, it will have an impact on the thousands of young people who receive funding from this initiative. Here again, we have not heard from youth representatives on what is their position on the issue of Government tuition given the current economic climate and allegations of abuse of funds and non-fulfilling of obligations specified under the GATE agreement.Environmental Protection against Extractive Industries Pollution
The Petrotrin Oil Spill in December 2013 into the Gulf of Paria was recorded as the largest oil spill in the history of Trinidad and Tobago. A report on the causes of the spill found that Petrotrin had not inspected their infrastructure in the area for the past 17 years! Even though Petrotrin was fined by the EMA for this incident, the spill severely impacted marine life and the social and economic livelihood of residents of the surrounding areas. Going forward, we must ensure that extractive industries companies adhere to stringent protocols and procedures to protect the environment and safeguard the livelihood of our citizens involved in the fisheries industry. However, this should not hinder our continued development of the Energy Sector, as it remains our major revenue earner. We need to learn from this incident, and all parties–Government, extractive companies, and civil society–must ensure the protection of the environment and the continued thriving of our communities, which depend on fisheries for economic sustainability.
Source of Article; TT-EITI
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