The case for revenue transparency in the oil and gas ... - La'o Hamutuk

International standards of revenue transparency
International Monetary Fund (IMF) Guide on Resource Revenue
Transparency
The International Monetary Fund (IMF) has addressed the public
financial implications of extractive industries in resource-rich countries
by urging greater transparency and accountability for financial flows
from extractive industries projects to government budgets. The IMF’s
Guide on Resource Revenue Transparency, published in 2005 and
updated in 2007, outlines best practices in four key areas: clarity of
roles and responsibilities; public availability of information; open
budget preparation, execution, and reporting; and assurances of
integrity. Notably, the Guide argues for contract transparency in
addition to revenue transparency. The International Monetary Fund
specifies four elements of revenue transparency: 55
Burma is currently not following
any international standards on
revenue transparency
1 Clarity of Roles and Responsibilities. This includes having a legal
revenue management system, where there are specific laws that
govern where revenues are deposited, who has access to them,
and how they are spent.
2 Open Budget Process. Information about how resource revenues
are spent and how they are used in the national budget should be
open and clear.
3 Public Availability of Information. Information related to natural
resource revenues should be available to the public. This includes
the estimated value of reserves, the amount of money paid by
companies to the government, how much of that money is kept
and/or used by the government, contracts between the government
and companies, and other relevant information.
4 Assurances of Integrity. Internationally-recognized systems of
accounting systems should be used, and regular audits should be
conducted and released to the public.
‣ Burma is a member of the IMF but following the IMF’s Guide is
not required of member governments
The EITI
The most widely used global standards for revenue transparency are
contained in the voluntary protocol Extractive Industries Transparency
Initiative (EITI), which currently has 30 Candidate and Compliant
Countries from different parts of the world. The EITI promotes revenue
transparency through monitoring and reconciling company payments
and government revenues at the country level. The process is overseen
by participants from the government, companies and civil society. 56 As
applied to states, the EITI Principles encourage several factors related
to revenue transparency, including 1) the use of revenue wealth for
sustainable growth; 2) public understanding and participation;
22