ToolBOX
Assessment of revenue transparency of oil and gas companies
| Purpose |
To evaluate oil and gas companies in three areas relevant to revenue transparency: payments to host governments, company operations and corporate anti-corruption programs.” Ensuring access to information about how much money governments receive from extractive industry revenues empowers citizens to hold their governments accountable, monitor how the money is spent and lobby for responsible public spending. |
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| Types of data used |
Objective data only. The questions focus on whether or not the information relevant to revenue transparency is disclosed and available in the public domain (websites, annual reports, etc.) They do not seek to test the quality or accuracy of the information disclosed, nor to evaluate the efficacy o any reported practices, the impact of performance, or whether companies fulfil legal requirements. |
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| Methodology |
The framework consists of a questionnaire with approx. 50 indicators relating to existing standards of revenue transparency drawn from international sources (EITI principles, IMF Guidelines for Revenue Transparency, UNCAC, TI’s Business Principles for Countering Bribery) The questionnaire analyses reporting practices in 3 key areas for international oil companies (and a 4th one for national oil companies): 1) Payments to host governments on a country-to-country basis (e.g. royalties, taxes, fees)
2) Operations on a country-to-country basis (e.g. publicly available information on scale of operations, contracts, production volumes)
3) Anti-corruption programs, i.e. company disclosure of anti-corruption policies and practices and the scope of these
4) For national companies only: an evaluation of regulatory and procurement issues.
For each of the 4 “areas” listed above, three aspects of implementation are considered:
1) Policy: looks at whether the company has policies commitments or rules for revenue transparency.
2) Management systems: looks at whether the company has allocated resources and created the systems needed to achieve revenue transparency.
3) Performance: looks at whether the company is disclosing information on payments, operations and its anti-corruption efforts.
The data-gathering process involves desk-based research into information that is made publicly available by the company. In addition to the material on company websites, each company has the opportunity to provide other printed information available in the public domain, such as annual reports, policy statements, codes of conduct, country-specific reports, reports on corporate responsibility, etc. Points are awarded based on yes (1) and no (0) answers (based on clearly defined criteria), sometimes based on a scale to account for partial disclosure. |
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| Area of Governance |
Corruption Economic Governance
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| Pro-poor /gender sensitive aspects |
Few questions cover issues implicitly pro-poor / gender sensitive, such as “Does the company publicly provide evidence of engagement with stakeholders on issues of revenue transparency?” (“stakeholders” include government and civil society)
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| Example indicators |
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| Organization |
Transparency International
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| Where to find this tool | ||||||||||
| Actionability |
Yes, the results of the assessment can be used by civil society, host governments and development advocates to identify where exactly are the bottlenecks to revenue transparency, distinguishing between lack of adequate disclosure rules and policies, lack of capacity and/or resources to achieve revenue transparency, and lack of efforts to disclose information in practice. This framework is also an ‘actionable’ complement to the EITI, since it encourages companies to go beyond payments disclosure to support other enabling conditions for increased transparency and accountability, such as anti-corruption policies and practices, revenue management and expenditure, contract transparency, accounting practices and regulatory issues. |
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| Complementarity |
Questions address both revenue transparency “inputs”, i.e. assessing the existence of transparency policies and effectiveness of management systems required to implement such policies, and transparency “outputs”, i.e. assessing whether the company is indeed disclosing information on payments, operations and its anti-corruption efforts. Questions therefore ask about both the rules “on the book” and what occurs in practice.
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