Validation vital in maintaining standard, says PNGEITI

The National Business

PAPUA New Guinea will be validated for the second time since the country signed up to implement the extractive industries transparency initiative (EITI) global best practice standard in 2013, according to PNG Extractive Industries Transparency Initiative (PNGEITI).
Head of PNGEITI Lucas Alkan said the validation was an essential feature of the EITI implementation process and was intended to provide stakeholders with an impartial assessment of whether EITI implementation was consistent with provisions of the EITI standard.
Alkan said the validation exercise was set to commence on Oct 30.
PNG underwent its first validation in 2018, in which the EITI board granted meaningful progress in implementing the EITI standard.
“The board recognised PNG’s efforts in ensuring appropriate multi-stakeholder oversight of EITI implementation and aligning objectives for the EITI with national priorities,” he said.
It further commended the country’s efforts to produce EITI data in a timely manner and to effectively disseminate the findings of the EITI reports to influence public debate,” he said.
“The outcome of the first validation was a positive step for PNG in the EITI implementation process and demonstrated that the EITI process can contribute to enhancing transparency and accountability in the management of resources related revenues.”
The board allowed 18 months for PNG to take corrective actions on the areas identified to meet the EITI global standard before a second validation was undertaken.
There were 14 areas identified as having made no progress or inadequate progress which required action to be taken include:

  • Public disclosure of information related to the award or transfer of mining tenements and oil and gas licenses pertaining to companies covered in the EITI report;
  • Ensuring a comprehensive list of state participation in the extractive industries, including terms associated with state equity and any changes in the year under review, be publicly accessible;
  • Ensuring that complete production volume for oil and gas, and production values for each of the extractive commodities produced during the year under review be publicly accessible and disaggregated by commodity;
  • Ensuring that export volumes and values are disclosed publicly for each mineral commodity (including oil, condensate and gas) exported in the year under review;
  • Ensuring that the materiality threshold for selecting companies ensures that all payments that could affect the comprehensiveness of EITI reporting be included in the scope of reconciliation;
  • Undertake a comprehensive assessment of transactions between extractives SOEs (and their subsidiaries) and mining, oil and gas companies, as well as between the extractives SOEs (including their subsidiaries) and government in its scoping for future EITI Reports; and,
  • Establish whether direct subnational payments (to government entities) by extractives companies are material.
    Alkan emphasised that failure to make considerable improvements in the above areas in the second validation could result in PNG being suspended from the EITI in accordance with the provisions of the EITI standard.