PH withdraws from extractive industries’ global transparency effort

The Philippines has discontinued its implementation of the Extractive Industries Transparency Initiative (EITI) due to “questionable” metrics and procedures for determining compliance that were deemed “biased and unfair.”

Finance Secretary Carlos Dominguez III said EITI, which is the global standard for extracting and accounting of gas, oil and other mineral resources, has validation systems or a quality assurance assessment process that are “unduly subjective, biased and unfair.”

“The Philippines has no confidence in the ability of the EITI to undertake an impartial, transparent, and evidence-based validation process,” Dominguez said in a letter on June 20 to EITI Chairman Helen Clark, a former New Zealand prime minister.

Dominguez emphasized on Wednesday, June 22, that despite the withdrawal from the EITI, the Philippines has the capability to process the extractive sector and has the systems and manpower to ensure transparency in these activities.

“The government will continue to champion better resource and revenue management, and ensure that resource utilization remains open, accountable, and responsive to the needs and aspirations of Filipinos,” he said.

In his letter, Dominguez pointed to the unfair treatment by EITI Board which apparently used irrelevant metrics and even relied on “unvalidated reports in assessing the status of civic space in the extractives sector.”

The DOF said it has repeatedly asked for more details on “alleged issues” pertaining to civic space for it to address these issues. “The EITI, however, has not supplied the requested details,” it noted.

“We refuse to be taken hostage by unverified allegations from foreigners and people who have no mandate from the electorate,” said Dominguez. He said EITI lacks due process for actions it has imposed on the Philippines.

The DOF chairs the Philippine Extractive Industries Transparency Initiative (PH-EITI), a multi-stakeholder body that governs the implementation of the EITI in the Philippines.

Basically, the EITI prescribes a standard for transparency and accountability in the mining, oil and gas industries. Extractive companies in implementing-countries are engaged to publicly disclose data on taxes, royalties and other payments they make to the government and their host-communities, said the DOF.

Since 2013, the Philippines has been implementing the EITI and undergoes validation every three years.

In 2016, the DOF said EITI recognized the country for its “impactful implementation” and in 2017, it declared the country as first among more than 50 nations that have achieved “satisfactory progress” in terms of EITI requirements.

“Over the years, the country has demonstrated innovation and best practices in the areas of contract and beneficial ownership transparency, and social, environmental, employment, and gender data disclosures,” said the DOF. “Further, the Philippines has sustained and broadened stakeholder engagement amid extreme situations such as the COVID-19 pandemic,” it added.

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