Fighting corruption in a global economy: transparency initiatives in the oil and gas industry.

Karin Lissakers, Open Society Institute

Gavin Hayman, Lead Campaigner, Global Witness

Sabit Bagirov, Chairman of Board, TI Azerbaijan NGO Coalition

Father Patrick Lafon, General Secretary, Central African Bishops Conference, Cameroon

Investors

Karina Litvack, Director, Head of Governance & Socially Responsible Investment, F&C Asset Management Support to IAG Ben Mellor, Head of EITI Secretariat Tim Ayres, EITI Secretariat Peter van der Veen, Manager, Mining Department, World Bank

XII. APPENDIX 3

The EITI Criteria (57)

1. Regular publication of all material oil, gas and mining payments by companies to governments ("payments") and all material revenues received by governments from oil, gas and mining companies ("revenues") to a wide audience in a publicly accessible, comprehensive and comprehensible manner.

2. Where such audits do not already exist, payments and revenues are the subject of a credible, independent audit, applying international auditing standards.

3. Payments and revenues are reconciled by a credible, independent administrator, applying international auditing standards and with publication of the administrator's opinion regarding that reconciliation including discrepancies, should any be identified.

4. This approach is extended to all companies including state-owned enterprises.

5. Civil society is actively engaged as a participant in the design, monitoring and evaluation of this process and contributes towards public debate.

6. A public, financially sustainable work plan for all the above is developed by the host government, with assistance from the international financial institutions where required, including measurable targets, a timetable for implementation, and an assessment of potential capacity constraints.

XIII. APPENDIX 4

Boston Globe, Congo Holds 2 Activists Who Assailed Oil Deals (58)

April 7, 2006

PRETORIA--Republic of Congo authorities yesterday arrested two activists--who had sharply criticized the country's oil deals as corrupt--for allegedly stealing money from their nonprofit organizations, according to Global Witness, a London-based group that has called on African countries to be more transparent in their oil contracts.

Christian Mounzeo, president of Rencontre pour la Paix et les Droits de l'Homme, and Brice Mackosso of the Catholic Justice and Peace Commission, were being held in jail and at first were denied access to a lawyer, according to Sarah Wykes, a Global Witness researcher. She said that attorney Maitre Senga eventually was allowed to see Mounzeo and Mackosso.

Senga could not be reached for comment last night. Two senior Congolese officials also could not be reached by telephone.

Late last year, the World Bank delayed Congo's application for debt relief because of what it called irregularities in Brazzaville's oil contracts, including the existence of numerous private companies controlled by government officials who sold the country's oil by using a maze of transactions. But two months later, the executive boards of the World Bank and the International Monetary Fund agreed to cancel $2.9 billion in debt as long as the country met several obligations to reducing the country's high poverty levels.

No court date has been set for Mounzeo and Mackosso, Wykes said. Her organization has protested the arrests. She said the two were arrested "because of the work both men were doing on the mismanagement and corruption of oil revenue."

(1.) See Extractive Industries Transparency Initiative, About EITI, http://www.eitransparency.org/section/ abouteiti (last visited Feb. 5, 2007) [hereinafter About EITI].

(2.) See Extractive Industries Transparency Initiative, Supporters, http://www.eitransparency.org/section/ supporters (last visited Feb. 4, 2007).

(3.) Martine Milliet-Einbinder, Writing off Tax Deductibility; The Tax Deductibility of Bribes is a Practice which the Convention has made Easier to Abolish, OECD OBSERVER, May 2000, available at http://www.oecdobserver.org/news/printpage.php/ aid/245/Writing_off_tax_deductibility_.html.

(4.) Id.

(5.) Foreign Corrupt Practices Act of 1977, 15 U.S.C. [section] 78dd (2000); see Justin Serafin, Foreign Corrupt Practices Act, 41 AM. CRIM. L. REV. 721 (2004) (discussing the history and development of the Act).

(6.) Serafin, supra note 5, at 721-22.

(7.) About EITI, supra note 2.

(8.) See Transparency International, About Transparency International, http://transparency.org/about_us (last visited Feb. 4, 2007).

(9.) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, Dec. 17, 1997, 37 I.L.M. 1 (1999).

(10.) United Nations Convention against Corruption, G.A. Res. 58/4, U.N. GAOR, 58th Sess., 50th & 51st plen. Mtgs., Annex, Agenda Item 108, U.N. Doc. A/58/422 (Oct. 21, 2003).

(11.) Inter-American Convention against Corruption, Mar. 29, 1996, 35 I.L.M. 724 (1997).

(12.) Criminal Law Convention on Corruption, Nov. 4, 1998, T.S. No. 173, available at http://www.usdoj.gov/criminal/fraud/fcpa/ets173or.htm.

(13.) African Union Convention on Preventing and Combating Corruption, opened for signature July 11, 2003, available at http://www.africa-union.org/root/au/Documents/ Treaties/Text/ConventiononCombatingCorruption.pdf.

(14.) See United Nations Global Compact, The Global Compact Network, http://unglobalcompact.org/ParticipantsAndStakeholders/index.html (last visited Feb. 4, 2007); see also United Nations Global Compact, Principle 10, http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/ principle10.html (last visited Feb. 4, 2007) ("Businesses should work against corruption in all its forms, including extortion and bribery.")

(15.) Id.

(16.) See Global Witness, http://www.globalwitness.org (last visited Feb. 5, 2007).

(17.) GLOBAL WITNESS, CRUDE AWAKENING, THE ROLE OF THE OIL AND BANKING INDUSTRIES IN ANGOLA'S CIVIL WAR AND THE PLUNDER OF STATE ASSETS (1999), available at http://www.globalwitness.org/ media_library_detail.php/93/en/ a_crude_awakening.

(18.) Publish What You Pay, Background, http://www.publishwhatyoupay.org/ english/background.shtml (last visited Feb. 5, 2007) [hereinafter Publish What You Pay].

(19.) Id.

(20.) See World Bank, Governance, http://www.worldbank.org/wbi/governance (last visited Feb. 4, 2007); International Monetary Fund, What the IMF Does, http://www.imf.org/external/work.htm (last visited Feb. 4, 2007).

(21.) See, e.g., TERRY LYNN KARL, THE PARADOX OF PLENTY: OIL BOOMS AND PETRO-STATES (Univ. of Cal. Press) (1997).

(22.) Publish What You Pay, supra note 18.

(23.) EITI, REPORT OF THE EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE (EITI) LONDON CONFERENCE (June 17, 2003), available at http://www2.dfid.gov.uk/ news/files/eitireportconference17june03.asp [hereinafter Report of the EITI].

(24.) Id.

(25.) Id.; EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE (EITI), STATEMENT OF PRINCIPLES AND AGREED ACTIONS (June 17, 2003), available at http://www.eitransparency.org/UserFiles/File/ speeches/agreedactionsjune2003.pdf.

(26.) REPORT OF THE EITI, supra note 23.

(27.) Id.; see Extractive Industries Transparency Initiative, G8 Summit Endorses Extractive Industries Transparency Initiative (EITI), http://www.eitransparency.org/ section/supporters/_g8endorsement (last visited Feb. 5, 2007) (endorsing EITI most recently in St. Petersburg).

(28.) Extractive Industries Transparency Initiative, International Advisory Group, http://eitransparency.myaiweb15.com/iag.htm (last visited Feb. 4, 2007).

(29.) Extractive Industries Transparency Initiative, Nigeria, http://www.eitransparency.org/ section/countries/_nigeria (last visited Feb. 4, 2007).

(30.) Extractive Industries Transparency Initiative, EITI Implementation Workshop, Feb. 2005, Paris, http://www.eitransparency.org/section/events/ _eiti_implementation_workshop_february_2005_paris; Extractive Industries Transparency Initiative, EITI London Conference, Mar. 2005, http://www.eitransparency.org/section/ events/_eiti_london_conference__march_2005; Extractive Industries Transparency Initiative, EITI Principles and Criteria, http://www.eitransparency.org/section/ abouteiti/principlescriteria (last visited Feb. 5, 2007) [hereinafter EITI Principles and Criteria].

(31.) EITI Principles and Criteria, supra note 30.

(32.) Id.

(33.) EITI SECRETARIAT, INCENTIVES FOR STAKEHOLDERS IN EITI: OVERVIEW PAPER (2005), available at http://eitransparency.org/UserFiles/iagincentivesoverview paper17_08.pdf (providing a list of benefits including the benefits listed in this section).

(34.) Ngozi Okonjo Iweala, Impact of the Sovereign Credit Rating on Nigeria's Economic Development, BUSINESS DAY, July 20, 2006, http://www.businessdayonline.com/?c=56&a=7640.

(35.) EITI Secretariat, supra note 33.

(36.) See supra note 29 and accompanying text.

(37.) See Ministry of Solid Minerals Development Nigeria, Ministry of Solid Minerals Development, http://www.msmd.gov.ng/About_MSMD/Objectives.asp (last visited Feb. 5, 2007).

(38.) HART NURSE LTD., NIGERIA EXTRACTIVE INDUSTRY TRANSPARENCY INITIATIVE, FINANCIAL AUDIT: FINANCIAL FLOWS 1999-2004 (2006), http://www.neiti.org/ FARFinFlowsUpload.pdf.

(39.) See Nigeria Extractive Industries Transparency Initiative, IAG Meeting & 2nd Year Anniversary of the NEITI, http://www.neiti.org/IAG%20meeting%20and%20second %20anniversary.htm (last visited Feb. 5, 2007).

(40.) See HART NURSE LTD., supra note 38.