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Assessment of World Bank Group's revenue transparency implementation in the extractive industries

Heike Mainhardt-Gibbs

Bank Information Center (BiC)

March 2007i

SARPN acknowledges BIC as the source of this document: www.bicusa.org
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Introduction

The following document is an assessment of how the World Bank and International Finance Corporation (IFC) (collectively World Bank Group - WBG) are implementing revenue transparency in their operations involving the extractive industries (oil, gas, and mining - EI). For the purposes of this assessment, revenue transparency refers specifically to the public disclosure of all government revenues stemming from extractive industry operations. The assessment has two principle objectives: 1) to determine how many recent World Bank and IFC EI projects include revenue transparency measures and, when present, the concreteness of those measures; and 2) to determine how comprehensive and consistent the Bank and IFC are applying EI revenue transparency, both across countries and across types of EI activities.

The assessment addresses these two objectives by way of two main components. Component 1 reviews all World Bank and IFC extractive industry-related project and program loans that were approved or proposed from July 1, 2005 to December 31, 2006 (i.e., FY06 and CY06). During this time period, there were 38 EI-related loans – 14 World Bank, 23 IFC, and 1 MIGA (guarantee). Component 2 examines the World Bank’s lending and non-lending assistance since 2004ii, and current WBG country strategiesiii for all Extractive Industry Transparency Initiative (EITI) countries (23)iv, for all non-EITI resource-rich countries (7) where the Bank is active, and for an additional 11 countries considered to have substantial resources, for a total of 41 countries. v For WBG country strategies, it is important to consider how the strategy is making revenue transparency a priority for countries. For example, do the strategies for countries with substantial resources simply mention the importance of revenue transparency or does the WBG make a lending commitment and designate EI revenue transparency as a program performance indicator?

Detailed project-by-project and country-by-country assessment results are provided in Annexes 1 and 2 and summaries are provided in Tables 1 and 2 below. Lastly, it deserves to be noted that World Bank Group staff in the Oil, Gas, and Mining Department provided comments on two draft versions of the assessment. The author tried to incorporate these comments as much as possible. In several cases, direct World Bank/IFC responses are provided in the text or as an end note.


Footnotes:
  1. Revised August 2007 to incorporate World Bank Group staff comments.
  2. When appropriate, the assessment considered WBG activities before 2004 – such as when there is an EI project of great significance, which typically did include transparency measures, or where the current country strategy began in 2003 and should have been updated by now to reflect the importance of revenue transparency among other issues (these exceptions are clearly noted in Table 2).
  3. Country strategies reviewed include: Country Assistance Strategies, Country Partnership Strategies, Interim Strategies, Interim Strategy Notes, Transitional Support Strategies, and Regional Integration Assistance Strategies.
  4. All current EITI countries are considered by the World Bank to be a resource-rich country or a country with substantial resources (see footnote below for definition).
  5. As defined by the World Bank – resource-rich countries are those in which EI account for, or are expected soon to account for, more than 50 percent of government revenues and countries with substantial resources are those in which extractive industries account for, or are expected to soon account for, 30 to 50 percent of fiscal revenues or exports.


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