CONTRACTS CONFIDENTIAL: - Good Law and Practice

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14 CONTRACTS CONFIDENTIAL: ENDING SECRET DEALS IN THE EXTRACTIVE INDUSTRIES would contribute to more controversy. Chapter Four discusses these various policy arguments against contract transparency and why they are misguided. In the current context, resisting disclosure may actually exacerbate controversy. The status quo of contract secrecy will soon be the riskier path for companies and governments. Though unquestioned for decades, contract secrecy provides no discernable benefits for any of the parties involved. The arguments for contact transparency are substantial, and the counterarguments look weak under scrutiny.
CHAPTER ONE Why Contract Transparency? There is a growing movement for contract transparency, supported by an increasing number and diversity of organizations and institutions. Civil society organizations such as RWI and the Publish What You Pay campaign are among those calling for further openness. Among international financial institutions, the World Bank, the IMF and the IFC are beginning to encourage contract transparency; the strongest of these proponents is the IMF, which has endorsed contract transparency as key to the good governance of extractives. 4 Governments in a number of countries require oil, gas or mining contracts to be voted on publicly by the parliament, while other countries without such parliamentary requirements—including East Timor, Peru and Ecuador—have nonetheless made contracts publicly available in one or more of their extractive sectors. A few countries explicitly support contract transparency as a fundamental principle in managing their extractive sector; examples include Liberia, in its EITI bill, and Ghana, in its nascent but rapidly developing oil sector. While not an exhaustive list, the following are some of the recurrent arguments for contract transparency. Contract transparency is essential for the responsible management of natural resources and the potential for growth and economic development that those resources can provide. Governments, citizens, and investors all have much to gain from contract transparency. Governments will be able to negotiate better contracts if they have access to contracts other than their own, as industry certainly does. Coordination among government agencies in enforcing and managing the contracts will be made easier. Citizens’ suspicions of the hidden horrors will decrease, creating a more stable contract that is less likely to be subject to calls for renegotiation and better relationships with communities. Citizens have a right to know how their government is selling their resources. 5 In most countries around the world, sub-soil resources such as minerals, oil, and gas are the property of the nation, not the individual property owner of the surface rights. 6 Citizen ownership is not such a simple proposition when it comes to particulars, however; in countries with mineral and hydrocarbon resources, the ways in which the region, community and nation divide the benefits of these resources can be highly controversial. Accordingly, contracts involving oil, gas and mineral resources may cover a range of information to which citizens should rightly have access, as the owners of such resources. The “value” of a contract cannot be captured in a single number; contracts typically contain information about fiscal terms and the allocation of risk that are essential to understanding the benefits and risks— the real value—of the deal. Beyond the fiscal aspects that are necessarily involved, contracts may also contain provisions covering many other areas that directly affect citizens, including (but not limited to) environmental mitigation and protection measures, sections on land use and rights, and provisions dealing with the displacement of local communities and their rights. 15
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Page 13 and 14: Executive Summary The laws of contr
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APPENDIX C Countries with FOI Laws1
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Endnotes 1. Ted Moran, Harnessing F
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ENDNOTES 21. Ibid. at 105-106. 22.
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ENDNOTES (2) the extent to which it
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ENDNOTES 69. See “Parliament Rece
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ENDNOTES approval was necessary for
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ENDNOTES 119. For a detailed backgr
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Index A Abu Dhabi, 65 Albania, 65,
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government accountability, 11 Greec
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CONFIDENTIAL Contract transparency
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