Fostering Oil Sector Transparency in Yemen
South-South Knowledge Exchange Hub
Providing Country(ies): Kazakhstan Recipient Country(ies): Yemen, Republic of
Sector(s): Energy and Mining Funding Source: Other Start Date: March 31st, 2010 End Date: December 31st, 2010 Last Updated: July 21st, 2011
The Extractive Industries Transparency Initiative (EITI) fosters transparency and accountability in the oil, gas, and mining sectors in the 35 countries that voluntarily take part. Soon after Yemen joined the EITI in 2007, implementation of the EITI in that country stalled as Civil Society Organizations (CSOs) and extractive companies struggled to reach consensus on revenue reporting requirements. Since EITI is a consensus-based initiative, Yemen’s EITI Secretariat at the Ministry of Oil and Minerals was reluctant to force companies to submit to reporting requirements, and CSO’s in Yemen needed help to better organize themselves and their efforts to foster the EITI process.
As the first Middle Eastern country to join EITI, Yemen is symbolically important to the initiative. So staff at the World Bank’s Oil, Gas, and Mining Department were eager to respond when Yemeni CSOs requested a South-South Knowledge Exchange with their peers in Kazakhstan, where EITI implementation was more advanced. In September 2010, World Bank staff facilitated a knowledge exchange for a Yemeni delegation to visit Kazakhstan to learn how to engage more successfully in the EITI process.
“The visit provided a very valuable opportunity for all of us to be exposed to the experience of the CSOs in Kazakhstan and their role in the EITI,” said Mr. M. Al-Najjar, Yemen EITI Council Secretary.“It was useful to learn how they built coalitions nationally and how they communicated about EITI and used the parliament to support their positions.”
Besides learning to work better with government and private sector companies, CSOs in Kazakhstan gained valuable practical skills in building consensus and settling disputes among themselves.
“We finally understood that we shouldn’t fight among ourselves, but we should unite and have a common position,” said Tawfik Al-Budiji, CSO Coalition leader from Yemen.
The Extractive Industries Transparency Initiative (EITI) fosters transparency and accountability in the extractive sectors. Launched with the endorsement of Great Britain’s then Prime Minister Tony Blair in 2002, EITI is currently implemented in 35 countries where it brings the private sector, civil society, and government together to verify and publish company payments and government revenues in the oil, gas, and mining sectors.
As the first Middle Eastern country to join in 2007, Yemen has been important as a symbol of regional participation. But as in some other countries, companies and CSOs did not agree on the scope of the EITI project. Since EITI implementation relies on consensus, the EITI process stalled in Yemen for nearly two years.
Meanwhile, by September 2010 Kazakhstan was in the final stretch of achieving EITI Validation, having implemented the EITI since 2005. Kazakhstan—which also relies heavily on extractive industries—had been internationally recognized for its efforts to raise awareness of the EITI;1 and CSO participation in Kazakhstan had also been very active.
Seeking to maintain EITI momentum in symbolically critical Yemen, and at the request of CSOs in the country, the World Bank organized a knowledge exchange to bring EITI stakeholders in Yemen together with peers in Kazakhstan. The seminar, organized by the World Bank’s Oil, Gas, and Mining Department with support from the Almaty office in Kazakhstan, brought representatives of the Yemeni EITI CSO Coalition, some members of parliament, and members of the EITI Secretariat together with CSO representatives and members of Kazakstan’s National EITI Stakeholder Council. The objective of the knowledge exchange was to share views on the important role of CSOs in EITI, and to help CSOs in Yemen to engage more successfully in the EITI process.
Instruments used in this exchange:
Conferences Expert Visits Study Tour
Several months prior to this exchange, World Bank task team working on EITI in Yemen agreed with CSOs to bring experts from other countries to help them organize to promote EITI. In February 2010, World Bank staff met with 15 Yemeni CSOs, and in April 2010 a CSO expert from Kazakhstan and the head of the EITI in Mauritania visited Yemen to discuss the EITI process and the role of CSOs. This event demonstrated the need for deeper engagement, and the coalition of CSOs felt they needed more information. Thus, the idea of bringing the entire group to Kazakhstan was born.
Preparation for the main phase of the exchange included communicating with participants in both countries to draft a final meeting agenda and agree on logistics. Agreement on the composition and size of the Yemeni delegation was an important part of the process. The Yemeni delegation—eight NGO representatives from the Yemeni Coalition, two ministry representatives, and a parliamentarian—visited Almaty, Kazakhstan to attend the World Bank-facilitated seminar at the Almaty World Bank office from September 29 to October 1, 2010.
During three days of training, NGO leaders from Kazakhstan joined trainers from the World Bank’s staff to discuss practical ways of helping the Yemeni CSO Coalition promote the EITI in Yemen, such as how the CSOs in Kazakhstan reach decisions and organize to interact with extractive companies. Presenters also discussed dispute resolution and other issues related to Kazakhstan’s National Council of Stakeholders (NCS), as well as EITI Validation, including EITI reporting and auditing and the role of civil society.
After the exchange, a media briefing organized by the World Bank ensured dissemination of the results of this event to a wider public in Kazakhstan. All members of the Yemeni delegation participated and a Russian-speaking participant addressed the Kazakhstani press in Russian.
The first Yemeni EITI Report—the first such report from the Middle East—was launched shortly after the exchange, in November 2010, by Yemen’s EITI Council and EITI Secretariat.
Knowledge Providers: Anton Artemyev, Soros Foundation Kazakhstan, Public Finance Transparency Program Director, NSC observer, former NSC member, former member of the EITI International Board, Almaty Nataliya Yantsen, Tax Culture Fund, Director, EITI National Stakeholder Council (NSC) member, NGO Coalition: Oil Revenues–under Public Oversight!, Almaty Pavel Lobachev, Head, Coalition: Oil Revenues–under Public Oversight!, Almaty Svetlana Ushakova, EITI CSO alternate Tatiana Sedova, World Bank EITI Consultant, Almaty, Kazakhstan
Members of Yemen EITI Council and the YEITI Secretariat under the guidance of the Minister of Oil and Minerals.
Intermediate Capacity outcomes for this exchange:
Enhanced Knowledge and Skills Improved Consensus and Teamwork Raised awareness Strengthened Coalitions
As a result of the South-South Knowledge Exchange, Civil Society Organizations (CSOs) in Yemen became more aware of their role in fostering EITI in that country, and CSO leaders learned what specific steps they could take to perform this role, including how to better engage with donors, governments, and the private sector. CSOs also learned how to build consensus, make decisions, and resolve disputes within the CSO Coalition.
The exchange renewed support and momentum for the EITI process in Yemen. The South-South Knowledge Exchange helped improve collaboration among industry, civil society, and government, and helped ensure the continued partnership of the donor community—a solid platform on which to build the EITI process.
Soon after the exchange, Yemeni authorities finalized the EITI Validation process, an EITI Validator was brought to Sana’a, and Yemen’s government and CSOs implemented a vigorous communication effort. The first Yemeni EITI Report was published in November 2010, and Yemen achieved full EITI Validation in March 2011. The EITI-Validated report—the first of its kind in the Middle East—presented the first reconciliation of oil revenues received and reported by the Yemeni Government with the payments made and reported by the companies. No significant difference was found between what was reported by the government and what was reported by the companies.
“This should be a cause for pride for the Yemeni people and a cause for satisfaction for those who work tirelessly to foster increased transparency in Yemen,” said Benson Ateng, World Bank Country Manager in a speech commemorating the release of the report on November 10, 2010.
Long Term Impact:
The World Bank’s Oil, Gas, and Mining Policy division (SEGOM) has supported Yemen and another 50 countries in moving the EITI process forward. EITI validation is very important for Yemen, where oil accounts for 25 percent of GDP, 70 percent of government revenue, and over 85 percent of export earnings. Implementation of the EITI process fosters transparency and good governance, which helps attract investment. Civil society organizations (CSOs) also benefit because EITI increases information on how governments spend revenue to help citizens.
Lessons Learned: Conduct knowledge exchange and capacity building of CSOs as soon as possible to help countries struggling to implement EITI. CSOs need a great deal of attention and capacity building to effectively implement EITI. “I wish I had thought about this sooner because it was a very powerful experience linking the CSO actors in the two countries,” said Alexandra Pugachevsky, Senior Energy Specialist with the World Bank and task team leader. This was a powerful trust-building exercise for the World Bank in Yemen which led to the Bank being invited for the first time to speak to the Yemeni Parliament.
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Alexandra Pugachevsky; Sustainable Energy, Oil, Gas, Mining Division; World Bank Group World Bank Staff Trainers for the event: Svetlana Ushakova; Nataliya Yantsen; Pavel Lobachev
For Further information on EITI in Kazakhstan, please visit: http://www.eiti.kz EITI and the World Bank:www.worldbank.org/eititf EITI: http://www.eiti.org Source 1 Kazakhstan received special recognition at the 4th Global EITI Conference in February 2009 in Doha, Qatar for its efforts to raise awareness of the EITI across the country. 2 VALIDATION REPORT©:“Validation of the Extractive Industries Transparency Initiative (EITI) in Yemen.”YEITI Council. January 2011. http://eiti.org/files/Yemen_Final_Validation_Report_EN.pdf