Failings in public contracting are undermining development. Public revenues are not being generated, allocated and spent as effectively as they should be. Such factors as corruption, opaque contracting processes and poor oversight of contract implementation are undermining results. Citizens, particularly the poor, are paying the price. Increased transparency in the mining sector could lead to increased benefits for all citizens.
Government should take the lead on disclosing mining deals. This was the sentiment from a discussion asking “License and contract transparency – the new normal?” that formed part of the World Bank and AusAID program leading in to last week’s Mining Indaba in Cape Town.
Why disclose the agreements? It can reassure investors, and reassure citizens who have in the past assumed the worst of secret contracts. Disclosure is one necessary step in the broader push to ensure mining leads to a transfer of value to the host country. It builds trust that serves both parties. These were among the reasons offered by Ibrahima Camara, a key figure in the government review of mining contracts in the Republic of Guinea, and Sam Russ, Deputy Minister for Land, Mines and Energy in Liberia. Their calls increasingly resonate with big industry players who prefer that any contract disclosure be required by government to ensure a level playing field for all operating companies.
As Richard Morgan of Anglo American noted, governments and industry have tended to hide behind each other on this issue, so it is now helpful to have governments take a lead. Of course disclosure of mining deals is not yet standard practice but as Antoine Heuty of Revenue Watch Institute highlighted it is picking up pace fast. Their forthcoming Index will reference more than twenty governments releasing extractives contracts while more have legislation pending.
Open Contracting ensures that all stakeholders have the knowledge and the tools to effectively monitor and hold their governments accountable so that ultimately, everyone can benefit.
Michael Jarvis leads the Governance for Extractive Industries program at the World Bank Institute. He can be reached at email@example.com