Report on International Financial Institutions’ Assistance for 

the Extraction and Export of Natural Resources 

A. Introduction

This report describes Treasury policy concerning the extraction and export of natural resources 

and the amount and type of assistance provided by each international financial institution (IFI) 

from April 1, 2008, to July 31, 2009, for the extraction and export of oil, gas, coal, timber or 

other natural resources. 

The report is prepared pursuant to subsection 7083(d) of the FY 2009 Department of State, 

Foreign Operations, and Related Programs Appropriations Act, which is Division H of the 

Omnibus Appropriations Act, 2009, signed into law on March 11, 2009. (A copy of section 

7083 is attached at Tab A.) This report builds on reports previously submitted by Treasury 

pursuant to similar reporting mandates contained in the FY 2005, 2006, and 2008 foreign 

operations appropriations acts. 

This report also responds to subsections 1112(c) and (d) of the Supplemental Appropriations Act, 

2009, signed into law on June 24, 2009. (The relevant subsection excerpts are attached at Tab 

B.) 

The report first discusses the general engagement of the United States, particularly Treasury, in 

promoting extractive industries transparency. The report provides summaries of the IFIs’ 

activities in support of extractive industries transparency and promoting good governance of 

extractive industries by resource rich borrowing member countries. The report then describes the 

twenty-three multilateral development bank (MDB) projects for the extraction and export of 

natural resources that were approved between April 1, 2008, and July 31, 2009. 

B. USG Engagement

The United States has made extractive industries transparency a major objective of foreign and 

development policy. Treasury takes the lead in USG engagement with the IFIs, which play an 

important role in promoting fiscal transparency, in extractive and other sectors, in developing 

and emerging market countries. The Department of State represents the United States on the 

Board of the Extractive Industries Transparency Initiative (EITI). Through U.S. Embassies and 

in coordination with the U.S. Agency for International Development (USAID), State leads USG 

efforts to promote EITI, help countries attain EITI candidate status, and meet their EITI 

commitments. In June 2009, State submitted a report to Congress on Progress Made in 

Promoting Transparency in Extractive Industries Resource Payments (report attached at Tab C.) 

There is close coordination on EITI among Treasury, State, other interested agencies such as the 

Department of Commerce and the Overseas Private Investment Corporation (OPIC), and the 

private sector and civil society organizations. 

Treasury itself works through bilateral channels to promote extractive industries transparency. 

For example, Treasury has successfully encouraged countries, such as Liberia, to participate in 

EITI. Senior Treasury staff and advisors have met with EITI stakeholder groups in Azerbaijan, 
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Peru, and Nigeria to assess country implementation of the initiative. Most recently, in Abuja, 

Nigeria, in June 2009, Treasury received assurances that Nigeria’s FY 2005 audit of revenues 

would be published in the near future,1

 and that Nigeria is progressing toward completing the 

EITI validation steps ahead of its March 2010 deadline. Treasury discussed revenue 

transparency with Azeri officials during the December 2008 meeting of the US-Azerbaijan 

Economic Policy Council. The outcome was a clearer understanding on our part of how the 

Azeri government intended to use revenues from its Oil Fund to finance its budget deficit. We 

also have advanced EITI transparency in the G-8 and regional fora. 

Through its Office of Technical Assistance (OTA), Treasury also fields teams of expert advisers 

in ministries to help countries build capacity in fiscal management, including in audits and 

reporting, customs and tax administration, and budget and procurement systems. For example, 

OTA's Revenue Program generally centers its efforts on creating a joint team of customs and tax 

administration officials with the technical expertise to effectively audit petroleum and mining 

companies. Activities include comparing tax and other financial records with inventory 

volumes, establishing physical controls over storage areas, and verifying deductions taken for 

prospecting costs in order to establish accountability among companies and ensure the 

government is receiving its due. OTA is winding up approximately two years of assistance in 

this sector in Azerbaijan and Guatemala, and beginning similar efforts in Mozambique and 

Niger. OTA has also worked with the Petroleum Revenue Oversight and Control Commission in 

Chad to strengthen the Commission's technical capacity, improve its budget and procurement 

systems, and provide general guidance and advice. 

Treasury officials consistently stress the importance of resource revenue transparency in 

Executive Board consideration of MDB projects, replenishment negotiations, country and sector 

strategies, International Monetary Fund (IMF) Article IV reports, and Poverty Reduction 

Strategy Papers. 

Pursuant to legislative guidance, Treasury has advised the management of the IFIs and the public 

that it is the policy of the United States to oppose any assistance by such institutions for the 

extraction and export of natural resources unless the country has in place functioning systems for 

accounting and reporting on natural resource payments. 

All proposed MDB projects for extractive industries are closely reviewed by a team of Treasury 

analysts that reviews all MDB proposals in coordination with staff from other U.S. government 

agencies. We recognize that many MDB extractive industry (EI) projects have not adequately 

addressed the complex challenges posed by these operations, and we have carefully considered 

the findings and recommendations on these projects emerging from the MDBs’ inspection 

functions and independent evaluation units. Looking ahead, we are pushing for a more proactive 

approach to EI transparency and broader fiscal transparency in the MDBs, e.g., in the World 

Bank energy policy, currently under discussion. The Asian Development Bank endorsed EITI in 

2008 and, at U.S. urging, committed to additional transparency measures in the energy policy 

adopted in June 2009. With U.S. encouragement, the African Development Bank is working on 

a natural resources management policy and also is preparing an operational guidance note on EI 

 

1

 The audit was published on August 11, 2009. 
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governance. We are working to integrate EITI principles into the operations of the InterAmerican Development Bank (IDB), now that the IDB Board has endorsed the EITI. 

Treasury efforts to promote transparency and accountability extend beyond the extractive 

industries sector. Treasury has encouraged the IFIs to use their analytical and diagnostic tools to 

help countries identify and address weaknesses in their public financial management systems 

broadly and their natural resource accounting in particular. Treasury has also urged countries to 

put in place transparent public financial management (PFM) systems to ensure that all public 

revenues, including natural resource revenues, are used effectively and accountably.

Following strong U.S. leadership during negotiation of the fourteenth replenishment of the 

International Development Association (IDA), approved in April 2005, the World Bank agreed 

to predicate future IDA assistance for any country’s EI project which had a significant impact on 

government revenues upon the recipient government having in place, or being in the process of 

establishing, a functioning system for accounting for revenues and their use. In addition, to 

receive IDA assistance for an EI project, the government should also have in place, or commit to 

establish, a functioning system for the independent auditing of such revenues and the public 

dissemination of the audit results. 

C. Policy Engagement by the International Financial Institutions (IFIs)

With the recent approval by the Board of Directors of the IDB, all of the IFIs have now endorsed 

the Extractive Industries Transparency Initiative (EITI), and increasingly are integrating EITI 

principles into their operations. As confirmed by a recent Senate report,2 the World Bank and 

IMF have both launched efforts to improve accounting and transparency of extractive industries 

revenues. In addition, the World Bank and the IMF have supported the EITI Secretariat and 

EITI implementing countries through technical, financial, and policy advice. The IMF has 

issued and refined a Guide on Resource Revenue Transparency to supplement its diagnostics and 

provide best- practice standards on countries' public revenue and expenditure systems in 

resource-rich countries. The Guide describes EITI implementation criteria and steps needed to 

achieve them. The World Bank and the regional development banks have encouraged borrowing 

member countries to commit to extractive industries transparency, including by joining EITI and 

implementing its criteria. For instance, the World Bank and the International Finance 

Corporation (IFC) have financed activities to strengthen EI transparency in Peru. The African 

Development Bank supported measures to improve the accounting and reporting of oil and gas 

revenues in Tunisia, even though it is not an EITI candidate country. However, application of EI 

transparency principles within MDB-financed projects remains uneven, and the attention given 

to transparency considerations is not always well-documented, posing a challenge for Treasury 

staff to assess the extent to which projects meet the policy standards we have set. 

Below are summaries, by institution, of IFI support for extractive industries transparency. 

 

2 The Petroleum and Poverty Paradox: Assessing U.S. and International Community Efforts to Fight the Resource 

Curse, Report by the Minority Staff to the Members of the Senate Foreign Relations Committee, October 16, 2008. 
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African Development Bank (AfDB) 

The AfDB endorsed the EITI in October 2006. AfDB’s Operations Policy Department is 

preparing a comprehensive policy for AfDB engagement in natural resource management, to be 

presented to the Board in 2009, which will mainstream EITI principles into the Bank’s own 

natural resource operations. To date, support for EITI has included technical and financial 

assistance to member countries that have demonstrated political will by endorsing EITI but lack 

implementation capacity, and promoting advocacy and outreach activities to strengthen the will 

of resource-rich member countries to improve governance of natural resources and extractive 

industries. 

In May 2008, the Board approved a “Governance and Strategic Directions Action Plan 2008-12” 

to strengthen transparency and accountability in the management of public resources at the 

country, sector, and regional levels, including through the support of regional norms and 

standards of good financial governance. Through implementation of the action plan, the Bank is 

scaling up its involvement in the EI sub-sectors, mainstreaming EITI principles into its own 

sector operations, allocating staff and budget resources to this effort, and promoting good public 

revenue management. For the period 2007-08, the Bank allocated UA 600,000 (approximately 

$900,000) in administrative budget resources to support EITI implementation in several regional 

countries. The Bank has also provided in-house staff training in EITI implementation and 

sponsored several experience-sharing and coordination workshops and seminars with partners 

such as the EITI Secretariat, Norway, the World Bank, and resource-rich countries in Africa. 

Treasury has actively supported the AfDB’s engagement on extractive industry transparency as 

part of our overarching support for good governance as one of the Bank’s strategic priorities. 

We have viewed efforts to help countries build capacity to implement EITI principles as a 

particularly appropriate use of technical assistance resources. The Bank has helped Botswana, 

the Central African Republic, Liberia, and Madagascar to become EITI candidate countries. The 

Bank is also providing financing for EITI implementation through the establishment of national 

EITI Secretariats, the conduct of audits and validations. Capacity building and consultancy 

support will be required over the medium term for most of these countries as they are moving on 

to the EITI-compliant stage. In addition, the Bank’s outreach activities are aimed at creating 

incentives for other countries, particularly in the North and Central Africa regions, to endorse the 

EITI. 

At our urging, the Private Sector Department makes sure that its private sector sponsors adhere 

to EITI standards in countries that have endorsed the initiative. The Bank’s progress with EITI 

implementation is a key performance indicator under the results framework for the AfDF-11 

replenishment negotiated by the U.S. and agreed in December 2007. 

Asian Development Bank (AsDB) 

AsDB management endorsed EITI in February 2008, and actively encourages its developing 

member countries (DMCs) to adopt EITI principles. A designated EITI focal point in the 

Regional and Sustainable Development Department serves as the EITI resource for AsDB staff, 
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and maintains regular contact with the EITI secretariat in Oslo and with other EITI stakeholders. 

The Bank has participated in global EITI events and has hosted training programs and workshops 

for AsDB staff, often in coordination with outside groups such as Transparency International and 

industry representatives. 

AsDB recommends that Bank-financed extractive industry projects publicly disclose their 

payments from those projects to the host government. The Bank has promoted resource revenue 

transparency in its policy dialogue with the Governments of Pakistan, Papua New Guinea, 

Indonesia, Timor L’este, Mongolia, Kazakhstan and Kyrgyzstan, several of which are EITI 

candidate countries. Timor L’este presented its implementation of EITI principles at the 

AsDB/OECD Anticorruption Initiative's 6th Regional Anticorruption Conference (Singapore, 

November 26-28, 2008). 

Looking ahead, and as a result of USG efforts, the Bank's new energy policy, which was 

approved by the Board of Directors on June 18, 2009, includes a clear statement in support of 

enhancing EI revenue transparency. 

EBRD 

The EBRD endorsed EITI in 2004. The Bank supports the EITI initiative through: (a) the 

requirement for EBRD projects to comply with EITI if their host countries of operation are 

implementing countries; (b) the requirement to comply with Publish-What-You-Pay standards 

(in countries that are not implementing EITI); and (c) the on-going policy dialogue with 

governments, industry and NGOs in EITI-implementing countries, in coordination with the 

international and local EITI Secretariats, and other IFIs, in particular the World Bank. The 

EBRD also helps member countries build capacity to implement EITI principles and develop 

templates and mechanisms for reporting EI-related revenues. 

Among the EBRD’s countries of operations, Azerbaijan has become the first country to achieve 

compliance with EITI standards (in February 2009). The Kyrgyz Republic, a candidate country, 

was the first country to publicly endorse the EITI, and Azerbaijan was the first country in the 

world to produce a full EITI data report. Kazakhstan is also an EITI candidate country and has 

until March 2010 to complete validation. The EBRD has played an important role in these 

developments in the region through financing major oil and gas projects in Azerbaijan, the 

financing of the Kumtor mine in the Kyrgyz Republic, and through policy dialogue (including 

representation on the UK EITI Core Group) with governments in the region, and in particular the 

governments of resource-rich countries such as Kazakhstan and Mongolia. 

In financing EI projects, the EBRD aims to incorporate best practices with respect to 

transparency, revenue management, and lasting benefits for the local population. The EBRD’s 

energy operations policy states that: 

Natural resource projects need to be well managed to avoid the ‘resource curse’ that has 

befallen many other resource-rich countries. The EBRD will finance projects designed to 

yield a lasting benefit for the local population and adhere to best international 

transparency and revenue management standards. Going forward, the Bank will require 
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project sponsors to publicly disclose their material project payments to the host 

government as a minimum revenue transparency condition. In countries where 

governments have signed up to the Extractive Industry Transparency Initiative (EITI), the 

Bank will continue to play an active role to support its implementation, requiring project 

sponsors to follow its applicable methodology principles and criteria. 

Where governments have not yet signed up to EITI or adopted international best practices for 

resource revenue management, such as those recommended by the IMF, then the Bank will 

encourage endorsement by governments and require its project partners to implement measures 

that will raise transparency and governance to levels of this best international practice. 

Inter-American Development Bank (IDB) 

Since the Board's approval of the Camisea Gas Pipeline project (which involved gas transport 

rather than extraction), the Bank has increased its expertise in EI issues. Examples of this 

include the follow-on Peru LNG project, approved in December 2007, and the New Sustainable 

Energy Matrix project in Peru, a $150-million loan approved in January 2009 that is a 

centerpiece of the IDB's Country Strategy for Peru. 

Since the Bank established the Sustainable Energy and Climate Change Initiative, which now 

houses twenty staff, EI issues have become increasingly mainstreamed in country and policy 

dialogues. In the past two years, there have been numerous loan and grant programs aimed at 

improving countries' accounting and transparency regimes related to EI payments and receipts. 

For example, regular public meetings related to the Camisea Gas Pipeline project in Peru (the 

latest held on March 20, 2009) have strengthened collaboration among the Government of Peru, 

project sponsor companies, civil society and the IDB in monitoring royalty payments and have 

led to the central government's distributing funds to decentralized regional and municipal 

governments. 

Since the IDB’s realignment, there are a number of divisions with expertise in EI-related issues -

-the Energy Division, the Infrastructure and Corporate Finance Divisions, and the Institutional 

Capacity of the State Division. The Legal Department, Office of the Auditor General, Risk 

Management Office, Environment and Safeguards Unit and the Office of Institutional 

Integrity all have jurisdiction over EI issues within the context of administering the Bank's AntiCorruption Framework and various controls and safeguards related to use of Bank resources in 

IDB-financed projects. 

Treasury worked closely with the Board and Management of the Inter-American Development 

Bank to overcome their resistance and secure the Bank’s endorsement of EITI on July 29, 2009. 

We will be watching closely to make sure the Bank puts these principles into practice. The 

Office of the U.S. Executive Director has also stressed the importance of EI transparency and 

accountability in direct communication to management and the Board of Directors, as well as in 

the context of country strategy discussions (e.g., Guyana country strategy) and project 

discussions (e.g., Peru New Sustainable Energy Matrix). 
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International Monetary Fund 

While the IMF does not provide financing for the extraction and export of natural resources, it is 

an important source of data and analytical work through its Reports on Standards and Codes 

(ROSCs). The IMF has developed a code of good practices on fiscal transparency that is the 

basis for its assessment of countries' public financial management systems (published as Fiscal 

ROSCs). Treasury was very supportive of the 2007 move to strengthen this methodology and 

link it more closely to the Fund's Resource Revenue Guide (est. 2005, rev. 2007) which sets a 

global standard for assessing the quality and capacity of countries' systems for managing their 

natural resources wealth. 

As of end-2007, the IMF had completed fiscal transparency ROSCs in almost 90 countries, many 

of them with substantial resource revenue wealth. Since 2008, Fiscal ROSCs have been 

published for Kenya, the Kyrgyz Republic, and Namibia, and one is under preparation for 

Cameroon. Treasury raises the importance of resource revenue transparency in Board 

discussions on other IMF reports, as we did recently with the Kazakhstan Article IV report and 

the request for a financing program on the part of Sao Tome & Principe. 

The Fund also provides advisory and technical support in areas such as: managing petroleum and 

mining revenues (Bolivia's 2008 Article IV staff report), implementation of EITI (2009 Second 

Review under Liberia's Three Year PRGF Arrangement), and strengthened public financial 

management (Ghana, 2009 Memorandum of Economic and Financial Policies). Looking ahead, 

the IMF is in the process of establishing a natural resources trust fund that will provide additional 

analytical work, advisory services, and technical assistance to help countries manage their 

natural resource revenues. 

World Bank Group 

The World Bank Group is involved in lending and non-lending activities in oil, gas and mining 

in over 50 developing countries. The Bank and its private sector arm, the International Finance 

Corporation (IFC), do not finance extractive industries projects unless the companies commit to 

disclose revenues paid to the government. The IFC’s Social and Environmental Sustainability 

Policy promotes transparency of revenue payments from extractive industries projects to host 

governments. Accordingly, IFC requires that: 1) for significant new extractive industries 

projects, clients publicly disclose their material project payments to the host government (such as 

royalties, taxes, and profit sharing) and the relevant terms of key agreements that are of public 

concern, such as host government agreements and intergovernmental agreements; and 2) from 

January 1, 2007, clients of all IFC-financed extractive industry projects publicly disclose their 

material payments from those projects to the host government(s). In 2008, IFC worked with 

clients to review their practices and developed a Web site to facilitate access to the information 

made public by companies. To date, nine extractive industries clients are using the Web site to 

disclose their payments to host governments. Beginning in 2009, IFC clarified its reporting 

requirements for clients and will require disclosure in a more consistent form for all companies. 
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The Bank has supported efforts to build transparent and effective fiscal and regulatory 

frameworks and participated in global programs, such as the Petroleum Governance Initiative. 

The Bank has developed a toolkit to help civil society have meaningful input into the design and 

implementation of mining projects. Each year, the Bank prepares a report on the 

implementation of the Management Response to the 2004 Extractive Industries Review (EIR), 

assessing progress in meeting the EIR's social, environmental, and transparency commitments. 

The Bank's annual Extractive Industries Week brings together experts from governments, 

development partners, and civil society organizations to discuss the challenges of EI 

development and look for ways the sector can promote economic growth and reduce poverty. 

The Bank has been a central source of financing, technical assistance, and advisory services to 

EITI. The Bank has helped over a dozen countries implement their EITI commitments, while 

supporting efforts, more broadly, in the areas of fiscal management, legal and regulatory reform, 

and institutional development. The Bank administers the EITI multi-donor trust fund (MDTF), 

and has developed a matrix to measure and track MDFT-funded activities. The Bank continues 

to support the work of the EITI Secretariat, and a memorandum of understanding is in place 

regarding activities of the Bank in support of EITI. 

At the request of the U.S. Executive Director, the World Bank’s Oil, Gas, and Mining 

Department has worked with senior management of the Bank to increase awareness of revenue 

transparency issues and to mainstream this awareness into country assistance strategies for 

resource-rich client countries. In addition, at U.S. urging, the World Bank’s Independent 

Evaluation Group is completing a comprehensive review of the controversial Chad Cameroon 

Pipeline Project in which the Bank had piloted a new model for oil revenue management. We 

are awaiting the findings, which will be publicly released upon completion of the study. 

D. MDB Projects that Financed Extractive Industries Projects

The report describes in some detail 23 multilateral development bank (MDB) projects for 

activities related to extractive industries.3 The United States supported 16 of these projects. In 

nearly all cases, there were some elements of good transparency practices, although no project 

achieved full consistency with the criteria laid out in the reporting section of this legislation. 

Those criteria are whether the MDB explicitly considered the extent to which the country has 

functioning systems for accurately accounting for payments to the government by companies 

involved in the extraction and export of the natural resources, independent auditing of accounts 

receiving such payments and widespread public dissemination of the findings of such audits, and 

the verification of government receipts against company payments. 

In considering extractive industry projects, Treasury analysts review project documents for 

evidence that the MDB considered the extent to which the government has functioning systems 

in place to ensure accurate accounting for payments by companies; independent auditing of 

 

3

 The legislation (attached at Tab A) requires a report describing the amount and type of IFI assistance provided in 

the preceding 12 months for the extraction and export of natural resources and whether the IFI considered the extent 

to which the country has functioning systems described in paragraph (d)(1) of the legislation. This report covers the 

sixteen month period from April 1, 2008 to July 31, 2009. The period ends about one month prior to the due date of 

this report to allow Treasury time to prepare and submit the report. 
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accounts and dissemination of audit findings; and to verify government receipts against company 

payments. If this information is not in the project documents, analysts will engage with Bank 

staff through the United States Executive Director’s office to obtain answers. In addition, 

Treasury analysts frequently ask about the expected marginal increase in government revenues 

from the project. Also Treasury analysts meet with Bank staff in person to discuss the above 

extractive industry issues. 

1. African Development Bank (AfDB)

Guinea – The Guinea Alumina Project; $200 million loan; December 3, 2008: The AfDB 

approved a $200 million senior “A” loan and on a “best effort” basis leading a syndication to 

raise up to $100 million in “B” loans. Estimated at a total cost of $6.3 billion, the project and its 

primary associated facilities consisted of the following components: development of new 

bauxite mines (production estimated at approximately 9-10 million tons per annum (Mtpa) of 

non-exportable bauxite); an alumina refinery (with initial capacity of 3.31 Mtpa), steam and 

power plant (110 MW of electric power); red mud disposal facility; water supply reservoir; 

employee housing; port facilities (new alumina terminal and container quay); infrastructure 

improvements (including new 14.5 km access road to the refinery, railroad line improvements 

and spurs, a port and container terminal; bridge over Tinguilinta River, etc.). Guinea is an EITI 

candidate country; in the project document, the Bank indicated it is assisting the Government of 

Guinea to comply with the EITI requirements. Also, the Bank indicated that its participation 

provides assurance to other lenders that “best practice” will be adhered to on international 

environmental standards. However, on the basis of environmental and Pelosi Amendment 

issues, the United States abstained on this project. 

Tunisia -- Hasdrubal Oil and Gasfield Development Project; $150 million loan; October, 22, 

2008: The AfDB approved this private sector senior loan as part of the $1.2 billion financing of 

the offshore oil and gas field in the Gulf of Gabes. The AfDB reviewed and found acceptable 

the Tunisian Government’s financial management in the oil and gas sector. The annual reports 

of all national oil and gas activities including audited financial statements are published on the 

website of ETAP, the national oil company. Royalties and other taxes or revenues derived from 

the sector can be traced through the fiscal budget. Excerpts from Host Government agreements, 

concession agreements, et al are generally disclosed in local newspapers and in international 

specialized magazines like “Oil and Gas Monitor” or “Africa Energy.” While not an EITI 

candidate country, Tunisia was able to demonstrate that its financial management of the oil and 

gas sector broadly met the spirit of EITI principles. The United States supported this project 

because it would reduce the country’s dependence on imported oil; support modernization of 

energy infrastructure; provide business opportunities for the local Tunisian private sector; and 

generate about 1,200 skilled and unskilled jobs for the local population during construction, and 

90 jobs once the facility is in operation. 

2. Asian Development Bank (AsDB)

Indonesia – Technical Assistance for Preparing a Regional Road Development Project; $1.3 

million Preparatory Technical Assistance Grant; Initial Project Scheduled for February 14, 2008, 

and Revised Project Approved May 28, 2008: The AsDB proposed this preparatory technical 
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assistance grant for approval in February 2008 to examine options to improve roads in Northern 

Kalimantan and Southern Java. The United States expressed concern to the Bank and other 

shareholders that a proposed road bisected the Kayan Mentarang National Park and the Betung 

Kerihan National Park, and that, consequently, the proposed road would likely increase the 

extraction and export of illegal logging as well as increase wildlife poaching, degradation of 

natural forests, and forest fires. In response to the strong concerns raised by the United States 

and other shareholders, the AsDB withdrew and revised the proposal. The revised proposal did 

not contain the road component through these national parks. The AsDB indicated that the 

government has in place functioning systems to track company payments but audits are not 

always made public, nor are the verification of government receipts with company payments 

disseminated. The United States supported the revised proposal on May 28, 2008, because the 

road component through the national parks was deleted, rehabilitation of existing roads was 

expected to reduce transport bottlenecks and help catalyze regional growth, and AsDB 

Management gave assurances that any investment projects resulting from this technical 

assistance grant will be in accordance with AsDB’s safeguards policies on the environment, 

resettlement and indigenous people. In March 2009, the Government of Indonesia announced its 

intention to implement EITI, but has not yet become an EITI candidate country. 

3. International Finance Corporation (IFC)

Albania – Bankers Petroleum; $50 million loan; special purpose $5 million environmental term 

loan; and $10 million equity; May 5, 2009: Bankers Petroleum Albania Ltd. is a wholly-owned 

subsidiary of Bankers Petroleum Ltd., a Calgary-based oil and gas exploration and production 

company. The project will consist of the development and remediation of the Patos Marinza oil 

field in Albania. In addition to the Company’s license area, IFC will support the Company (BPA 

Ltd) and Government as possible in the wider remediation of adjacent sites which have been 

impacted by oil field operations and managed by the State-owned oil company, Albpetrol, whose 

operations are currently intermingled with that of the Company. IFC will require that the 

company publish payments associated with extraction activities to the authorities on an annual 

basis (“publish what you pay”). Albania is an EITI candidate country and has until May 2011 to 

complete validation. IFC staff is not aware of hydrocarbon sector revenues being published 

separately by the Government at this point. Minerals accounted for only 12 per cent of total 

export revenues in 2008; hence Albania has not generally been considered a resource-rich 

country. Historically, administrative capacity has been weak and the management of public 

finances has always been a big problem, especially in tax collection. The fact that the company 

has agreed to comply with ‘publish-what-you-pay’ principles has a high potential demonstration 

effect for other players, particularly Albpetrol (a state-owned oil company), to increase 

transparency and accountability of revenue flows. It is the understanding of IFC staff that 

royalties and taxes are paid directly to the central government budget. The project also 

contributes pre-existing production value and royalties to Albpetrol. As a listed Canadian 

company, Bankers Petroleum discloses royalties and taxes paid for its Albania project in its 

financial statements that are publicly available. The United States abstained on this project 

because some significant environmental impacts had not yet been assessed, and a full 

environmental impact assessment had not been released to the public. Therefore, the project was 

not compliant with the environmental disclosure requirements of the Pelosi legislation. (On 

March 25, 2009, the United States had supported this project (named the Patos Marinza 
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Environmental Remediation and Development project) at the EBRD based on more limited 

information on the project’s environmental impacts.) 

Argentina – Pan American Energy G San Jorge; $150 million loan; July 27, 2009: The IFC 

approved this corporate loan to Pan American Energy (PAE), a joint venture of British 

Petroleum and Bridas, a privately-owned Argentine firm. The loan will support the continued 

development and production of Cerro Dragon, an onshore oil field in the south of Argentina. 

PAE is the second largest exporter of oil and gas in Argentina, after Repsol. Cerro Dragon has 

been in production for approximately 50 years; the current license held by PAE was previously 

held by Repsol. The field is located in an arid, desert area with little vegetation and no 

biologically protected areas nearby. PAE exports approximately 60 percent of its oil production, 

primarily to Chile and Uruguay. However, PAE discloses its payments to local, provincial and 

federal authorities through its quarterly financial statements publicly posted with the Argentine 

Comision Nacional de Valores. At a national level, the Secretaria de Energia discloses 

production, royalties and terms of PAE’s concession contracts. At the regional level in the 

provinces of Santa Cruz and Chubut, each provincial government discloses payments it has 

received in aggregate on a quarterly basis and publishes each concession grant on the provincial 

website and official bulletins. Royalty collection is audited at both federal and provincial levels. 

The United States supported this investment because it will result in increased domestic 

hydrocarbon production, helping mitigate Argentina’s falling oil output and natural gas shortage. 

In addition, PAE’s continued investment in the San Jorge region will support the ongoing 

investment the company is making in developing the small and medium enterprise sector in the 

region. 

Burkina Faso – Riverstone; $4.5 million equity; January 16, 2009: The IFC Board approved this 

investment to acquire approximately 19 percent of the outstanding shares in Riverstone, a 

Canadian mining company exploring for gold in Burkina Faso. The IFC investment will support 

on-going exploration and future feasibility study work. Riverstone wanted IFC’s engagement to 

assist in developing projects in Burkina Faso in line with industry best practices in environmental 

and social sustainability. Burkina Faso is an EITI candidate country and has until May 2011 to 

complete validation. Riverstone, at the request of IFC, has committed to publicly disclose all 

revenue payments to the government, pending the implementation of EITI. The World Bank's 

Oil, Gas, and Mining Policy Division (COCPO) is helping the Burkinabe Government with EITI 

implementation. In November 2008, a Bank mission to Ouagadougou met with the National 

EITI Implementation Group, which included the Minister of Mines and the Secretary General at 

the Ministry of Finance, to discuss the accelerated implementation of EITI. The United States 

supported this investment because of its development impact. The emerging mining sector could 

result in a doubling of Burkina Faso’s export earnings, diversifying the Burkinabe economy from 

agricultural dependency. Also, the project will help to improve corporate and public sector 

governance. 

Burkina Faso – Gryphon - $1.6 million equity; June 19, 2009: IFC approved this investment to 

acquire 7 percent of the outstanding shares of Gryphon, a junior mining company focused on 

gold exploration in Burkina Faso. Gryphon is listed on the Australian Stock Exchange. 

Gryphon sought IFC’s engagement to help in developing its project in line with industry best 

practices in environmental and social sustainability and also to help the company attract the 
- 12 -

required financing as it transitions from an exploration company into a potential developer. As 

noted above, Burkina Faso is an EITI candidate country and has until May 2011 to complete 

validation. At the request of IFC, Gryphon has committed to publicly disclose all revenue 

payments to the government, pending the implementation of EITI. The World Bank's Oil, Gas, 

and Mining Policy Division (COCPO) is helping the Burkinabe government with EITI 

implementation. In November 2008, a Bank mission to Ouagadougou met with the National 

EITI Implementation Group, which included the Minister of Mines and the Secretary General at 

the Ministry of Finance, to discuss the accelerated implementation of EITI in the country. The 

United States supported this investment because of its development impact. The emerging 

mining sector could result in a doubling of Burkina Faso’s export earnings, diversifying the 

Burkinabe economy from agricultural dependency and helping to reduce poverty. Also, the 

project will help to improve corporate and public sector governance. 

Chile – Minera Escondida Limitada; $25 million loan; December 31, 2008: The IFC Board 

approved a shareholder loan to Minera Escondida Limitada, a copper mining company in Chile. 

Escondida was hit hard by falling copper prices and faced a short-term liquidity crisis. To 

alleviate its temporary cash short-fall, Escondida asked its shareholders (including IFC) to 

provide a short-term loan facility. IFC made its initial investment in the company in 1998, and 

now holds a 2.5 percent ownership stake. Chile has not acceded to EITI. However, the World 

Bank reports that Transparency International ranks Chile 23rd out of 180 countries in its 

Corruption Perception Index. Since 2004, the Government of Chile has been undertaking fiscal 

and public sector reforms, which include measures to increase fiscal transparency and establish 

an independent civil service modeled on best practices. The implementation of these structural 

reforms is scheduled to be completed in 2010. Finally, Minera Escondida discloses a full set of 

financials, including payments to the government, on its website www.escondida.cl. The United 

States supported this investment because it will help the company deal with its short-term 

liquidity shortfall. 

Colombia – Greystar; $25 million equity; March 12, 2009: The IFC approved this investment in 

Greystar, its first investment in Colombia’s mining sector. Greystar, a Canadian-based company 

listed on the Toronto Stock Exchange, is a junior mining company active in gold and silver 

exploration in Colombia. IFC financing will allow Greystar to complete feasibility studies, an 

environmental and social impact assessment, and other associated work to bring the project to 

the actual development stage. Greystar has exploration licenses that cover approximately 30,000 

hectares in the Santander region in Colombia. It has completed a substantial drilling program on 

its Angostura gold and silver deposits, one of the world’s largest undeveloped gold resources. In 

Colombia, oil, natural gas, and mining tax and royalty payments paid to Government are 

disclosed at an aggregate level and with a breakdown among commodities (oil, natural gas, and 

major metals and minerals). The Company has agreed to disclose all payments (royalties and 

taxes) to the Government, both at central and regional/local levels. IFC is in discussions with the 

Government and the Company to expand IFC’s municipal royalty management program in the 

petroleum sector to the mining sector. Also, IFC financing will be used to provide capacity 

building to the two municipalities that would receive royalties in the event of eventual mine 

development. This capacity building will increase local awareness of government receipts from 

the mine and also increase the capacity of the municipality to use funds effectively. Mining 

concession documents are publicly available for review, further enhancing the transparency of 
- 13 -

the mining sector in Colombia. Colombia has not yet acceded to EITI. The United States 

supported this project because it will diversify Colombia’s exports and increase export receipts, 

thus helping to support poverty reduction. In addition, given the Government’s practice of 

disclosing mining taxes and royalties paid and the public’s ability to review mining concession 

documents, there is limited governance and transparency risk to this project’s benefits. 

Ghana - Kosmos and Tullow; $215 million loans; February 19, 2009: The IFC Board approved 

this investment in Kosmos and Tullow, two companies that are developing the Jubilee offshore 

oilfield, Ghana's first oil discovery. The expensive and inconsistent energy supply is one of the 

most important long-term constraints on Ghana’s flourishing private sector, dramatized by 

rolling blackouts in 2007. Production from the Jubilee Field will diversify Ghana’s energy input 

sources and reduce Ghana’s reliance on oil and gas supplies from its neighbors. The project is 

expected to produce gas necessary to support about 400 MW of new power generation, 

equivalent to over 50 percent of power currently consumed in Ghana. The IFC funds will 

support this large undertaking, costing $3.2 billion for the drilling of 17 wells, installation of 

subsea infrastructure including long steel tubes to pump up the oil (starting at 120,000 barrels a 

day) to a leased floating production storage and offloading facility (FPSO), which will process, 

store and offload the crude oil into a tanker every week. The project's sponsors will disclose 

publicly information about revenue payments to the government, consistent with IFC policy. 

 However, the United States disagreed with the IFC’s environmental classification of this project 

as Category "B". No Environmental Impact Assessment (EIA) for the project was disclosed 120 

days prior to the Board date. The United States position was that the project should have been 

classified as Category “A” by the IFC, and a full EIA should have been presented to the Board 

and the public. The requirements of the Pelosi legislation therefore were not met. For this 

reason and because of other environmental concerns, the United States abstained on the project. 

Ghana is an EITI candidate country and has until March 2010 to complete validation. Ghana has 

issued three reports covering mining sector payments and receipts, and has committed to extend 

its EITI program to the oil sector 

Mozambique – Baobab Resources; $5 million equity; October 10, 2008: The IFC Board 

approved an investment in Baobab Resources, a London-based junior exploration company 

focused on exploring and developing mineral deposits in Mozambique. IFC’s investment will 

support ongoing exploration and future feasibility study work. The company’s current 

explorations are in the Manica project area, which has produced gold 10 kilometers into 

neighboring Zimbabwe, and in the Mundonguara copper mine including gold and silver. 

Mozambique is an EITI candidate country and has until May 2011 to complete validation. With 

the recent commencement of commercial mining activities, the Government of Mozambique has 

sought World Bank help with EITI implementation. It is expected that a fair share of the project 

benefits from the development of a commercial mining operation will accrue to the government 

in the form of taxes and royalties, in compliance with the country’s mining code. At IFC’s 

request, Baobab will publicly disclose all payments, such as taxes and royalties, to the 

Government once it begins production. The United States supported this investment because of 

its development impact, including supporting poverty reduction. The Government is actively 

engaged with the World Bank to establish fiscal and macroeconomic policies and a transparent 

public budgeting process to ensure that government revenues are targeted at poverty reduction. 
- 14 -

Peru – Anglo American Quellaveco S.A.; $12 million equity; July 11, 2008: The IFC Board 

approved this investment in Anglo American’s Quellaveco mine concession in the south of Peru 

which holds copper, molybdenum, and silver deposits. The project sponsor, Anglo American plc 

of the United Kingdom, is the main shareholder. The IFC has been a shareholder in the project 

since 1993, and the investment allowed IFC to retain its 18 percent shareholding. The funds will 

support exploration, development and engineering work needed to complete the revised 

feasibility study for the concession. The mining sector represents over 6 percent of Peru’s GDP, 

contributes nearly 30 percent of the Government’s tax revenues, and accounted for 62 percent of 

the country’s total exports in 2006. In addition, the mining industry in 2007 paid $1.7 billion in 

royalties to the mining areas’ municipalities, most of which are in extremely poor rural areas, 

characterized by economic stagnation, lack of government capacity, low employment 

opportunities and weak, underdeveloped social capital. The Government of Peru is an EITI 

implementing country (the only EITI candidate country in Latin America), and has taken 

measures to improve its transparency regarding EI activities. IFC is involved in several advisory 

assignments in Peru that aim to improve transparency of revenue flows from the EI sector to the 

government and also from the central government to local authorities. The United States 

supported this investment because Peru stands to gain significantly from expanding its mining 

activities, including reduction of poverty and increased export revenues. Also, IFC believed that 

the governance risks of the investment were not significant. 

Peru – Antares Minerals, Inc. - $11.2 million equity; June 12, 2009: The IFC approved this 

investment to acquire 8 percent of Antares Minerals Inc., a Canadian junior mining exploration 

company focused on the Haquira copper exploration project in the high altitude, frontier region 

of Apurimac in southern Peru. Antares sought IFC’s engagement to assist in funding its 

feasibility study and continued exploration of the Haquira mineralization and to provide 

environmental and technical assistance. There is no mineral production or civil construction in 

this project. In the event of eventual mine development, IFC would consider providing capacity 

building to the two municipalities that would receive royalties. As noted in the Peru -Anglo 

American Quellaveco S.A project discussion above, the mining sector accounts for over 6 

percent of the country’s GDP and contributes nearly 30 percent of the Government’s tax 

revenues. The mining sector represents a significant source of exports and of royalties to the 

government. The Government of Peru has taken measures to improve its transparency regarding 

EI activities. IFC is involved in several advisory assignments in Peru that aim to improve 

transparency of revenue flows from the EI sector to the government and also from the central 

government to local authorities. The United States supported this project because Peru stands to 

gain significantly from expanding its mining activities, including reduction of poverty, increased 

job opportunities, and increased export revenues. Also, IFC believed that the governance risks 

of the investment were not significant. 

Eastern Europe/Central Asia – Lydian Resource Company; $1.3 million equity; March 12, 2009: 

The IFC approved this additional equity investment to bring its ownership to 12.9 percent of 

Lydian Resource Company, a mining company focused on finding and acquiring deposits in 

Eastern Europe and Central Asia. Lydian holds licenses for three exploration projects in 

Kosovo. As part of a 50-50 joint venture with Newmont, the second largest gold producer 

worldwide and Lydian’s largest shareholder, Lydian shares ownership of a gold property in 

Turkey as well as an undrilled gold property in Armenia. IFC assessed governance in Kosovo, 
- 15 -

Armenia, and Turkey based on available internal and external indicators, including the World 

Bank Institute’s governance indicators, the World Bank’s Country Policy and Institutional 

Assessment ranking, and Transparency International’s corruption index, as well as from 

discussions with the World Bank’s regional staff, regional economists and the Mining Policy 

Division. Mine development, if realized, would generate benefits for the host countries through 

payments made to the governments in the form of royalties and corporate income taxes. The 

United States supported the project because of the company’s activities in Armenia and Kosovo, 

two frontier economies where the mining sectors have been identified as key sectors for 

economic development, including support for poverty reduction and job opportunities. Also, 

Lydian is committed to disclose publicly all payments made to host governments. 

Thailand and Indonesia – Salamander Energy Limited; $25 million equity and $50 million 

revolving credit; July 15, 2008: The IFC Board approved this investment in Salamander Energy, 

an oil and gas exploration firm founded in 2005 and listed on the London Stock Exchange. The 

funds will cover the expected capital and operating expenditure needs of concessions in Java and 

East Sumatra, Indonesia and in Bualong, Thailand. The United States supported this investment 

because it presented an opportunity for the IFC to play a role in the sustainable development of 

energy, especially natural gas, which is a comparatively clean fuel. Also, at the IFC’s request, 

Salamander agreed to implement a public consultation and disclosure plan and publicly disclose 

on an annual basis its share of all material payments to the governments in both Indonesia and 

Thailand. 

Western Africa Region -- Capital Alliance Private Equity: $30 million equity; February 19, 

2009: CAPE, a private equity fund based in Nigeria, expects to raise $400 million to invest in 

12-15 Nigerian companies focusing on the telecommunications, electric power, energy 

infrastructure, services and logistics, and financial services sectors. According to the IFC, CAPE 

III expects to invest up to 40 percent of its committed capital in the oil and gas sector. The 

subprojects are expected to range in size from $10 million to $70 million. Projects of this size 

and in this sensitive sector are generally thought to be likely to have significant environmental 

impacts. Nigeria is an EITI candidate country and release of annual audits of oil sector accounts 

is mandated by law. However, since IFC does not and will not meet Pelosi disclosure standards 

for these sub-projects, the United States abstained on the project. 

Zambia – Kiwara Plc.: $5 million equity; June 18, 2009: The IFC approved a $5 million 

investment for an 11 percent share of the outstanding shares of Kiwara, a London-based junior 

exploration company listed on the London Alternative Investment Market and the Johannesburg 

Stock Exchange. Kiwara sought IFC’s engagement to help finance the Company’s exploration 

activities and associated feasibility studies in line with best industry practice in environmental 

and social sustainability and also to provide more general corporate advice as it progresses into 

development and mineral extraction. Mining is by far Zambia's biggest export earner, with 

copper accounting for about 73 percent of the country's principal exports in 2007. Renewed 

investment in the mining sector has also caused a strong recovery in gross fixed investment, 

which now contributes around 25 percent of GDP, compared with 11 percent in 1994. Business 

Monitor International estimated that the mining industry of Zambia grew by approximately 4 

percent in 2008, contributing 13 percent of GDP. The U.S. supported this project because it 

represented an early opportunity for IFC to reengage in the Zambian mining sector and help 
- 16 -

restore private sector confidence in Zambia's regulatory environment. Also, Kiwara has a 

prospective nickel deposit (besides copper) which, if developed with IFC's assistance, would 

help diversify the Zambian economy away from dependence on copper revenues. Zambia is an 

EITI candidate country and has until May 2011 to complete validation. 

4. Multilateral Investment Guarantee Agency (MIGA)

None.

5. Inter-American Development Bank (IDB)

None.

6. European Bank for Reconstruction and Development (EBRD)

Albania -- Patos Marinza Environmental Remediation and Development; $55 million loan and 

$10 million equity; March 25, 2009: Bankers Petroleum Albania Ltd. is a wholly-owned 

subsidiary of Bankers Petroleum Ltd, a Calgary-based oil and gas exploration and production 

company. The project will consist of the development and remediation of the Patos Marinza oil 

field in Albania. In addition to the Company’s license area, the Bank will support the Company 

(BPA Limited) and Government as possible in wider remediation of adjacent sites which have 

been impacted by oil field operations and managed by the State-owned oil company Albpetrol 

whose operations are currently intermingled with that of the Company. The EBRD will require 

that the company publish payments associated with extraction activities to the authorities on an 

annual basis (“publish what you pay”). Albania is an EITI candidate country and has until May 

2011 to complete validation. EBRD staff is not aware of hydrocarbon sector revenues being 

published separately by the Government at this point. Minerals accounted for only 12 per cent of 

total export revenues in 2008; hence Albania has not generally been considered a resource-rich 

country. Historically, administrative capacity has been weak and the management of public 

finances has always been a big problem, especially in tax collection. The fact that the company 

has agreed to comply with ‘publish-what-you-pay’ principles has a high potential demonstration 

effect for other players, particularly Albpetrol (a state-owned oil company), to increase 

transparency and accountability of revenue flows. It is the understanding of EBRD staff that 

royalties and taxes are paid directly to the central government budget. The project also 

contributes pre-existing production value and royalties to Albpetrol. As a listed Canadian 

company, Bankers Petroleum discloses royalties and taxes paid for its Albania project in its 

financial statements that are publicly available. The United States supported the project because 

it would support environmental remediation and privatization of the oil and gas sector. (On May 

5, 2009, the United States abstained on this project (the “Bankers Petroleum project”) in the 

IFC because it became clear that Bankers Petroleum had not assessed some environmental 

impacts that Treasury believed were likely to be significant. Since some significant 

environmental impacts had not yet been assessed, the project was not in compliance with the 

environmental disclosure requirements of the Pelosi legislation.) 

Azerbaijan – Azer-Yad; $15 million loan; December 16, 2008: Azer-Yod MMC is a limited 

liability company established for the extraction and production of iodine in Azerbaijan for 

export. The project will expand the plant’s design capacity to more than 500 t/a of crude iodine. 

As part of the project, the company will repair and put into operation about 70 wells, revamp its 
- 17 -

infrastructure and purchase and install an additional production line. The government revenues 

generated by the project will be less than 1 percent of the Azerbaijan government’s budget. The 

United States supported the project because the EBRD transition objectives include improving 

corporate governance and business conduct. Azerbaijan is the only country that has achieved 

EITI compliance. 

Bulgaria -- Chelopech Mining Facility; $15 million loan; July 22, 2008: Chelopech Mining, a 

joint stock company incorporated in Bulgaria, holds the mining rights and operates the 

Chelopech copper/gold mine in Bulgaria. Dundee Precious Metals Inc., the Sponsor, owns 100 

percent of the share capital of Chelopech. The investment will enable continued mine upgrade 

and development through the exploration and expansion of ore mining and concentrate 

production capacity to approximately 1,500,000 tpa of ore into gold/copper concentrates. Most 

of the concentrates are sold to two international companies. According to EBRD staff, proceeds 

from royalties and other direct taxes associated with extractive activities are reported in the 

General Budget in aggregate format. The Bulgarian National Audit Office, reporting to the 

Parliament, audits implementation of public institutions' budgets including those of the Central 

Government, Ministries and Municipalities. The results of such audits are publicly available. 

The terms of concession and any further changes to these terms are negotiated directly between a 

license-holder (after registration of commercial discovery) and the Government. These are 

further approved by the Council of Ministers and are registered centrally. Information on such 

concession agreements is made public in the State gazette and on the web site of the National 

Concessions Registry. In the case of Chelopech Mining, Dundee Precious Metals acquired this 

producing company (with relevant licenses and concession agreement in place) in 2003. At the 

time of acquisition, Dundee agreed to some changes to the terms of the concession agreement in 

negotiations with the Government. Chelopech Mining discloses amounts of royalties and taxes 

paid as a part of their financial reporting publicly available on the Trade Register of the Ministry 

of Justice (www.brra.bg). Besides, the Sponsor of the Project - Dundee Precious Metals, a 

Canadian company publicly traded on the Toronto Stock Exchange, reports on Chelopech 

Mining concession obligations in their financial reports and other regulatory filings available 

from Sedar (www.sedar.com). The United States supported this project since Bulgaria has a 

functioning system for extractive industry revenues. 

 

Mongolia – Energy Resources; $30 million equity; February 10, 2009: Energy Resources is a 

Mongolian mining company and owner of the Ukhaa Hudag (UHG) high-quality coal deposit in 

South Gobi, Mongolia. The EBRD will provide equity financing to the company to establish a 

small-medium-sized commercial production from the UHG deposit. The project will include the 

purchase of earth moving equipment and transportation trucks, coal washing equipment, road 

infrastructure upgrade and camp construction and communication facilities. The main market 

for the coal will be China. The United States abstained since the project did not meet the 

environmental disclosure requirements of the Pelosi legislation. Mongolia is an EITI candidate 

country and has until March 2010 to complete validation. 

Russian Federation – Pechora Energy; $25 million loan; September 9, 2008: The loan will 

enable Pechora Energy to increase production of crude oil and continue the exploration and pilot 

development of the Luzskoye oil field under license in the Timan-Pechora basin in the Komi 

Republic. Pechora Energy LLC is a limited liability company established in the Russian 
- 18 -

Federation and is a 100% owned subsidiary of Concorde Oil and Gas plc. The EBRD will 

require that Concorde publish its payments to the Russian government. Data on oil revenues are 

reported in the Russian budget. The government revenues generated by Pechora Energy will be 

less than 1 percent of the Russian government budget. The United States abstained because the 

project will have limited transition impact. 

Russian Federation – North Expedition; $100 million equity; July 22, 2008: North Expedition is 

a high-technology drilling company focusing on exploration and production drilling in the 

Russian Federation. The EBRD will finance the company’s working capital needs to enable it to 

start operating 30 new drilling rigs. Since North Expedition merely provides oil rigs to oil 

companies, there are no natural resource revenues from this investment. The United States 

abstained on this investment because there would be limited transition impact, limited financial 

additionality and inadequate assurances regarding environmental due diligence. 
- 19 -

Tab A 

Department of State, Foreign Operations, and Related Programs Appropriations Act, 2009, found 

in the Omnibus Appropriations Act, 2009, Public Law 111-8 (March 11, 2009).

Section 7083(d) (1) EXTRACTION OF NATURAL RESOURCES.- The Secretary of the 

Treasury shall inform the managements of the international financial institutions and the public 

that it is the policy of the United States to oppose any assistance by such institutions (including 

but not limited to any loan, credit, grant, or guarantee) for the extraction and export of oil, gas, 

coal, timber, or other natural resource unless the government of the country has in place 

functioning systems for: (i) accurately accounting for payments for companies involved in the 

extraction and export of natural resources; (ii) the independent auditing of accounts receiving 

such payments and the widespread public dissemination of the findings of such audits; and (iii) 

verifying government receipts against company payments including widespread dissemination of 

such payment information, and disclosing such documents as Host Government Agreements, 

Concession Agreements, and bidding documents, allowing in any such dissemination or 

disclosure for the redaction of, or exceptions for, information that is commercially proprietary or 

that would create competitive disadvantage. 

 

(2) Not later than 180 days after the enactment of this Act, the Secretary of the Treasury shall 

submit a report to the Committees on Appropriations describing, for each international financial 

institution, the amount and type of assistance provided, by country, for the extraction and export 

of oil, gas, coal, timber, or other natural resources in the preceding 12 months, and whether each 

institution considered, in its proposal for such assistance, the extent to which the country has 

functioning systems described in paragraph (d)(1). 
Tab B 

Supplemental Appropriations Act, 2009

MULTILATERAL DEVELOPMENT BANK REFORM

SEC. 1112. (a) BUDGET DISCLOSURE.--The Secretary of the Treasury shall seek to ensure that the multilateral 

development banks make timely, public disclosure of their operating budgets including expenses for staff, 

consultants, travel and facilities.

(b) EVALUATION.--The Secretary of the Treasury shall seek to ensure that multilateral development banks 

rigorously evaluate the development impact of selected bank projects, programs, and financing operations, and 

emphasize use of random assignment in conducting such evaluations, where appropriate and to the extent feasible.

(c) EXTRACTIVE INDUSTRIES.--The Secretary of the Treasury shall direct the United States Executive Directors 

at the multilateral development banks to promote the endorsement of the Extractive Industry Transparency Initiative 

(EITI) by these institutions and the integration of the principles of the EITI into extractive industry-related projects 

that are funded by the multilateral development banks.

(d) REPORT.--Not later than September 30, 2009, the Secretary of the Treasury shall submit a report to the 

Committee on Appropriations and the Committee on Foreign Relations of the Senate, and the Committee on 

Appropriations and the Committee on Financial Services of the House of Representatives, detailing actions taken by 

the multilateral development banks to achieve the objectives of this section.

(e) COORDINATION OF DEVELOPMENT POLICY.--The Secretary of the Treasury shall consult with the 

Secretary of State, the Administrator of the United States Agency for International Development, and other Federal 

agencies, as appropriate, in the formulation and implementation of United States policy relating to the development 

activities of the World Bank Group.
- 21 -

Tab C 

State Department Report to Congress 

Report on Progress Made in Promoting 

Transparency in Extractive Industries Resource Payments 

(Energy Independence and Security Act of 2007; Section 935) 
22

Report on Progress Made in Promoting 

Transparency in Extractive Industries Resource Payments 

(Energy Independence and Security Act of 2007; Section 935) 

Introduction

 This report was prepared pursuant to Public Law 110-140, the Energy 

Independence and Security Act of 2007, Section 935. Under subsection (d) 

(1), the Act mandates that the Secretary of State, in consultation with the 

Secretary of Energy, shall submit to the appropriate congressional 

committees a report on progress made in promoting transparency in 

extractive industries resource payments. This report addresses United States 

Government (USG) involvement with the Extractive Industries 

Transparency Initiative (EITI), bilateral efforts to help individual countries 

participate in EITI, and additional USG efforts to increase the transparency 

of natural resource payments outside of the EITI. 

 EITI's principles acknowledge the importance of responsible 

management of resource wealth for the benefit of citizens and national 

development. Better transparency prompts governments to become more 

accountable to their citizens for resource revenue windfalls and can help 

countries achieve development and poverty reduction goals. Transparency 

also creates conditions necessary for sustained improvements in investment 

climates and economic growth which creates more stable energy suppliers 

for the United States and world markets. 

 Extractive sector (oil/gas and mining) transparency is a key part of the 

USG's good governance promotion, anti-corruption, and energy security 

strategies. Concerning the USG's work in this area, the Department of State 

(State) leads in some extractive sector transparency programs, while the 

Department of Treasury (Treasury) leads in others. Many of these efforts 

and programs intersect with those of other organizations, including the 

International Financial Institutions (IFIs), other bilateral and multilateral 

donors, industry, and non-governmental organizations (NGOs). In addition, 

significant and specific steps taken by State, Treasury, USAID, and 

Embassies abroad help resource-rich countries meet the goal of increasing 

transparency in extractive industry payments. These actions represent only a 

portion of the Administration's overall efforts to increase transparency and 

reduce corruption in all sectors and all geographic regions. 
23

 Some significant achievements include supporting resource-rich 

nations that choose to join multilateral transparency initiatives, persuading 

other nations and their companies to support the positive transparency 

choices of resource-rich nations, and encouraging adoption of transparencybased criteria in the international financial institutions. 

EITI

 The Extractive Industries Transparency Initiative (EITI) is the focal 

point of most of the international activity related to improving revenue 

reporting transparency -- the core element of transparency within the 

extractive sector. Publicly reconciling payments that companies make and 

revenues that governments receive is a critical first step to holding decisionmakers accountable for the use of those revenues. Resource-rich countries 

implementing EITI can benefit from an improved investment climate by 

providing a clear signal to investors and to financial institutions that the 

government is committed to strengthening transparency and accountability. 

 EITI is a voluntary multi-stakeholder initiative that brings together 

government, industry, and civil society to improve resource revenue 

transparency. EITI is open to "implementing" countries (extractive resource 

exporting countries); "supporting" countries (nations whose companies are 

actively investing in resource-rich countries' economies or who support EITI 

principles); extractive industry representatives (companies and trade 

organizations who commit to abide by the full publication requirements of 

the EITI); and representatives from civil society organizations (both within 

implementing countries and from the international community). 

 Thirty countries are implementing EITI (a full list is contained in 

Appendix I). Twenty-nine of these countries are considered "candidate" 

countries, having completed the first four steps in the EITI process. The first 

group of EITI candidate countries has until March 2010 to complete an EITI 

validation; countries have two-years from the time they become candidate 

countries to complete validation. In February 2009, Azerbaijan became the 

first EITI compliant country, having successfully completed and passed an 

independent validation of its EITI process. Maintaining momentum with 

respect to the validation process is essential to the credibility of the EITI 

process. 
24

U.S. Participation as a Supporting Country

 The United States has been an EITI supporting country since the 

initiative was launched in 2003 (a list of supporting countries is contained in 

Appendix II). As a supporting country, the United States, through the 

Department of State, participates in EITI's internal governance, selfregulation, and policy development; provides support and assistance to 

several implementing countries as part of broader transparency promotion 

initiatives; and regularly engages in outreach to promote EITI. Significant 

outreach effort has focused on increasing awareness of and support for EITI 

among major emerging economies and meetings and discussions with new 

potential participants. The United States does not provide financial support 

directly to the EITI Secretariat, but has provided financial support for EITI 

related transparency efforts bilaterally and will contribute to the World Bank 

operated EITI trust fund facility. 

 USG Participation on the EITI Board

 The USG, through a Department of State representative, has been on 

the EITI Board since 2006. The Board consists of 20 members representing 

implementing countries, supporting countries, civil society organizations, 

industry, and investment companies. The Board meets at least twice each 

year, and remains in contact via teleconference and e-mail at other times. 

The Department of State representative actively participates on several 

Board committees; the USG currently serves as the Board alternate in the 

non-European supporting country constituency. 

 The Department of State has taken an active role in the development 

of Articles of Association for EITI, which have given the initiative a more 

permanent legal structure. The State Department and our Embassies 

overseas have engaged to ensure the free functioning of civil society 

organizations in an EITI implementing country. A senior Administration 

official used the May 2009 EITI Board meeting as an occasion to express the 

Administration's support for EITI and its transparency promotion goals. 

 U.S. Participation in the EITI Multi-Donor Trust Fund (MDTF)

 The EITI Multi-Donor Trust Fund (MDTF) was established in 2004 

with funding from the UK's Department for International Development 

(DFID). The Fund is administered by the World Bank on behalf of multiple 
25

donors. The governments of the United Kingdom, Germany, the 

Netherlands, Norway, France, Australia, Belgium, Canada, Spain, Finland, 

and the European Commission have all contributed to the MDTF. 

 The USG has allocated $3 million in USAID Economic Support 

Funds for each of FY08 and FY09 (a total contribution of $6 million) which 

will soon be transferred to a revised World Bank trust fund facility that 

includes the original MDTF and a separate single donor trust fund to which 

the USG will contribute. With the receipt of the $6 million USG 

contribution, the United States will become the second largest donor to the 

trust fund facility and will have a seat on the Management Committee. 

(Note: Previous USG financial support for EITI has been provided as 

bilateral assistance to EITI-implementing countries and NGOs.) 

 The MDTF Management Committee oversees the World Bank's 

administration of the MDTF and guides the business and policy decisions 

regarding the trust fund facility. The MDTF Management Committee 

consists of one senior representative from each donor that has contributed at 

least $500,000 and one senior representative from the World Bank. The 

Management Committee makes strategic decisions on priorities and policies, 

and approves the work program for the subsequent year. The next 

Management Committee meeting is scheduled for later in 2009. Revisions 

of the work program which exceed US$50,000 need approval by the full 

Committee, while smaller revisions are at the World Bank's discretion. A 

follow-up work-planning meeting each year evaluates progress and 

implementation. Bi-annual meetings and additional "special" meetings can 

be arranged at the request of either the Bank or a donor. An issue before the 

Committee is how to respond to the growing number of EITI implementing 

countries, including the countries that will be undergoing validation in the 

coming months. 

 The MDTF has grant agreements in place for 15 countries: Cote 

d'Ivoire, Equatorial Guinea, Ghana, Guniea, Kyrgyz Republic, Liberia, 

Madagascar, Mauritania, Mongolia, Niger, Peru, Sao Tome and Principe, 

Sierra Leone, Timor Leste, and Yemen for a total of $4.5 million. Three 

new grant agreements– Central African Republic, Democratic Republic of 

Congo, and Mali are soon to be put into place. The World Bank has 

suspended operations in Guinea, Madagascar, and Mauritania, so the grants 

to these countries are on hold. 
26

 Country-specific grant agreements are signed between the recipient 

country and the Bank to define and establish activities and responsibilities. 

MDTF funds can be used to support: 

1. Projects which support the six EITI criteria (see Appendix III), 

2. Global activities aimed at coordinating, disseminating, and 

producing/publishing outputs and sector-specific guidelines produced 

in the various countries, and 

3. Countries which have not yet signed on to the process but where the 

government has given the EITI Management Committee reasonable 

grounds to believe that they will endorse and implement EITI before 

the Trust Fund closes. 

USG Outreach to Increase Participation in EITI

 Throughout the year senior level State officials encouraged major 

developing economies to become EITI supporting countries and ensure that 

their companies comply with EITI reporting guidelines. USG officials 

deliver a consistent and persuasive message to interlocutors in emerging 

economies -- as well as established investor nations -- regarding the value of 

voluntary multi-stakeholder efforts such as the EITI. Regarding EITI 

specifically, State officials emphasize that investor nations will positively 

affect the investment climate in countries where their extractive industries 

operate by publicly supporting those countries' efforts to implement EITI 

and advance transparency. Becoming an EITI supporting country does not 

interfere with internal governance issues -- it reinforces what governments in 

participating countries are already trying to do. 

 Treasury officials have also taken an active interest in EITI, and their 

involvement has helped expand EITI participation, as well. For instance, 

Treasury encouragement contributed to Liberia's decision to join EITI as an 

implementing country. Promoting EI transparency and accountability is a 

central part of Treasury's bilateral dialogue with resource rich countries, IFI 

Board statements, and engagements in multilateral forums. 

Embassy Efforts
27

 Embassy officers have engaged with host country officials in EITI 

implementing countries on the importance of timely EITI implementation. 

Embassy officers in major emerging economies have approached host 

government officials about becoming EITI supporting countries and 

provided information on EITI and its goals. 

 Embassy and Consulate reporting officers cover a wide array of 

issues, but almost every reporting officer's portfolio contains responsibility 

for monitoring some aspect of good governance, anticorruption, or 

transparency. Embassy officers also monitor compliance with the Foreign 

Corrupt Practices Act (FCPA), which prohibits foreign bribery and is 

another tool in our fight against corruption. The FCPA focuses on the 

"supply-side" of the bribery equation, and complements EITI's efforts to 

account for payments made by companies to host governments. Although it 

is primarily USAID which oversees bilateral programs designed to help 

countries implement EITI, it is the Embassy officers covering Economic 

(particularly energy-related) portfolios who engage host country officials 

and report on EITI-specific concerns and implementation progress. For 

those countries that are already EITI candidate countries, Economic officers 

routinely report on challenges, successes, and concerns of the host 

government. 

 EITI is very much a work in progress, and attempts to engage every 

potentially eligible country at this stage would overwhelm a fairly new 

system. As noted above, the greatest challenge for both candidate countries 

and the EITI itself will be to guide existing candidate countries through the 

validation process, and either designate them as "compliant" or highlight 

discrepancies and advise on how to resolve them. As EITI begins moving 

candidates through the validation process, the success of the first countries -- 

and the strengthened economic climate which is expected to result -- will 

form the basis for even greater outreach and recruitment. 

Bilateral Assistance Programs (USAID)

 USAID implements the majority of the USG's bilateral foreign 

assistance programs designed to assist resource-rich countries who seek to 

increase transparency in the extractive sector. USAID funding and 

programming decisions generally are not tied to particular agreements or 

conventions, and in fact can be used to help build support for and implement 

various agreements. USAID bilateral programs provide funding to improve 
28

civil society engagement with the extractives sector and the EITI process in 

countries such as Peru, Nigeria, and the Democratic Republic of Congo. 

For FY08 and FY09, USAID will provide a total of $6 million in Economic 

Support Funds to the World Bank's EITI trust fund facility. 

 USAID support for increasing transparency and accountability in the 

extractive industries and resource revenue management often are part of 

broader reform efforts to strengthen good governance or to improve 

conditions for economic growth. USAID programs are designed in response 

to host country priorities. Countries often prioritize development objectives 

in order to meet their commitments to international agreements such as the 

United Nations Convention Against Corruption (UNCAC) and the EITI. 

Other Efforts Toward Promoting Transparency in the Extractive Sector

 Treasury Department and IFI programs

 Treasury takes the lead in USG relations with the International 

Financial Institutions (IFIs) and their programs. In this role, Treasury 

interacts directly with the World Bank and other multilateral development 

banks (MDBs), and the International Monetary Fund (IMF), to clearly 

articulate U.S. policy in relation to government revenues derived from the 

extractive industries -- that these revenues should be reported to the public 

accurately and transparently, and be used to meet the development needs of 

the host country. 

 Through the U.S. Executive Directors at each of the institutions, 

Treasury has, pursuant to legislative guidance, advised the management of 

the IFIs and the public that it is the policy of the United States to oppose any 

assistance by such institutions for the extraction and export of natural 

resources unless the country has in place functioning systems for accounting 

and reporting on natural resource payments. 

 Treasury officials consistently stress the importance of resource 

revenue transparency in Board consideration of MDB projects, country and 

sector strategies, IMF Article IV consultations, Poverty Reduction Strategy 

Papers (PRSPs) and diagnostic studies, and in bilateral meetings with 

country counterparts. For example: 
29

o Treasury promotes resource revenue transparency when considering 

proposed MDB policies such as the forthcoming Asian Development 

Bank (AsDB) energy policy, and when overseeing their implementation 

in individual hydrocarbon and mining sector operations. The AsDB 

endorsed EITI in February 2008 and has engaged in policy dialogue with 

the Governments of Pakistan, Papua New Guinea, Indonesia, Timor 

Leste, Mongolia, Kazakhstan and Kyrgyzstan to promote adoption of the 

principles. AsDB has a limited extractive industries portfolio, but 

engages in policy dialogue as part of its promotion of fiscal transparency 

in general. 

o Treasury has supported the African Development Bank’s (AfDB) efforts, 

since it endorsed EITI in October 2006, to mainstream EITI principles in 

its operations and promote transparent financial practices in African 

countries. AfDB has provided technical support and capacity building to 

four African countries with respect to EITI compliance. 

o Treasury is working closely with the Board and management of the InterAmerican Development Bank to secure its endorsement of EITI. 

o At the request of the U.S. Executive Director, the World Bank’s Oil, Gas, 

and Mining Department has worked with senior management of the Bank 

to increase awareness of revenue transparency issues and to mainstream 

this awareness in country assistance strategies for resource-rich client 

countries. In addition, the World Bank’s Independent Evaluation Group 

is completing a comprehensive assessment of the Chad Cameroon 

Pipeline Project. 

 The European Bank for Reconstruction and Development (EBRD) 

supports the EITI initiative in various ways, including: (a) through 

mandatory requirement for EBRD projects to comply with EITI in their host 

countries of operation (if such countries have an existing EITI initiative); (b) 

through requirement to comply with Publish-What-You-Pay standards (in 

countries that are not implementing EITI); (c) through on-going policy 

dialogue with Governments, Industry and NGOs, in EITI-implementing 

countries, in coordination with the International and Local EITI Secretariats, 

and other IFIs in particular the World Bank. 

 These efforts to promote transparency and accountability extend 

beyond the extractive industries sector. Following strong U.S. leadership 
30

during negotiation of the fourteenth replenishment of the International 

Development Association (IDA), the World Bank agreed to predicate IDA’s 

financial assistance for extractive industries projects with a significant 

impact on revenues upon the recipient government’s having in place, or 

being in the process of establishing, a functioning system for accounting for 

revenues and their use. In addition, the government should also have in 

place, or commit to establish, a functioning system for the independent 

auditing of such revenue receipts and the public dissemination of the results. 

Although these actions are especially relevant to extractive industry projects 

with significant revenue impacts, they are also applicable to all budget 

support operations, such as set out in the World Bank’s operational policy on 

Development Policy Lending. Treasury is actively working to establish 

these standards and policies at all of the MDBs. 

 The Treasury Department has also encouraged the IFIs to make fiscal 

transparency a central part of their diagnostics, including through application 

of the IMF Guide on Resource Revenue Transparency; IMF Code and 

Manual of Good Practices on Fiscal Transparency; IMF Code of Good 

Practices on Transparency in Monetary and Financial Policies; Declaration 

of Principles; World Bank Country Financial Accountability Assessments 

and Country Procurement Assessment Reports; and the joint Public 

Expenditure and Financial Accountability (PEFA) indicators. The Treasury 

Department reviews all MDB-financed activities in extractive industries 

when they come to the Boards of Directors, and prepares an annual report to 

Congress. 

 DOE programs

 Through various ongoing consultative and cooperative mechanisms 

(Energy Policy Dialogues, Bilateral Consultations, cooperative programs 

and exchanges), including at the ministerial level and with key EITI 

Implementing Countries and with countries expressing interest in 

participating, the Department of Energy promotes and encourages energy 

sector reforms. These efforts include a focus on good governance, enhanced 

transparency, stable regulatory and investment climates, and open and 

competitive bid processes. Specific activities include reviewing and 

commenting on draft legislation and policies and conducting regulatory 

capacity training in the host countries and in the United States. 

OPIC Programs
31

 OPIC recognized the interest of the U.S. government and the U.S. 

taxpayer in creating a level playing field for lawful business activities and 

combating corruption, as well as for promoting the most beneficial 

developmental activity. Accordingly, OPIC formally endorsed the 

principles of the EITI in September 2006. OPIC actively participates in the 

work of the EITI and has required adoption of the applicable EITI principles 

by its clients and sponsors. 

Specifically, OPIC is actively involved in the EITI consultative process; 

promotes transparent revenue reporting, as well as increased financial and 

organizational transparency; works in cooperation with other international 

financial institutions and the participating private financial institutions to 

promote governance and transparency initiatives in the financial community. 

OPIC recognizes that in some instances, participation in EITI can reduce the 

risks associated with a project, and can improve the likelihood of success in 

the most developmental markets, while reducing associated costs. 

The OECD Anti-Bribery Convention

 While U.S. companies are subject to the Foreign Corrupt Practices 

Act (FCPA), the Organization for Economic Cooperation and 

Development’s (OECD) Anti-Bribery Convention subjects member 

governments to restrictions on the ability of their companies to bribe foreign 

officials. The U.S. is a leading proponent of vigorous enforcement of this 

convention in the OECD’s Working Group on Bribery (WGB). The 

Departments of State, Commerce, and Justice and the Securities Exchange 

Commission represent the U.S. at the WGB.

Conclusion

 Transparency promotion and the pursuit of improved governance are 

key USG foreign policy objectives that involve numerous departments and 

organizations. Interagency cooperation has strengthened the USG role in 

EITI and persuaded new participants to consider supporting EITI. The USG 

will continue to strongly support EITI and other governance improvement 

efforts and will continue to push for major developing countries to become 

EITI supporters. 

 The next several months will be a crucial time for EITI, as 21 

countries seek to successfully complete EITI validation before their March 
32

2010 deadline. The USG will work closely with the EITI Secretariat and 

with other EITI stakeholders to encourage candidate countries to complete 

their validation on time. At the same time, however, EITI remains only one 

of the elements which USG agencies use in promoting increased 

transparency and reduced corruption in host governments. Additional 

efforts outside of the initiative, such as monitoring the FCPA, and fostering 

UNCAC implementation, as well as those programs currently underway in 

the International Financial Institutions, continue to emphasize that 

transparency is a key prerequisite to receiving U.S. support for new 

investments and loans in the extractive industries. 
33

Appendix I 

EITI Implementing Countries 

 Albania 

 Azerbaijan 

 Burkina Faso 

 Cameroon 

 Central African Republic 

 Cote d'Ivoire 

 Democratic Republic of Congo 

 Equatorial Guinea 

 Gabon 

 Ghana 

 Guinea 

 Kazakhstan 

 Kyrgyzstan 

 Liberia 

 Madagascar 

 Mali 

 Mauritania 

 Mongolia 

 Mozambique 

 Niger 

 Nigeria 

 Norway 

 Peru 

 Republic of Congo 

 Sao Tome/Principe 

 Sierra Leone 

 Tanzania 

 Timor Leste 

 Yemen 

 Zambia 

Countries expressing interest in implementing EITI: 

 A number of countries have expressed interest in implementing EITI 

and are working to complete the EITI sign-up indicators to become 

candidate countries including -- Afghanistan, Iraq, and Indonesia. 
34

Appendix II 

EITI Supporting Countries 

 United States 

 Australia 

 Belgium 

 Canada 

 Finland 

 France 

 Germany 

 Italy 

 Japan 

 The Netherlands 

 Norway 

 Qatar 

 Spain 

 Switzerland 

 The United Kingdom 

EITI Endorsements: 

 The G8 has endorsed the EITI at the Summits in Evian (2003), Sea 

Island (2004), Gleneagles (2005), and Heiligendamm (2007), Hokkaido 

Toyako (2008), and EITI is on the agenda for the La Magdalena Summit 

(2009). In 2008, the EITI was endorsed by the UN in a 2008 General 

Assembly Resolution. 
35

Appendix III 

EITI Criteria: 

• 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. 

• Where such audits do not already exist, payments and revenues are the 

subject of a credible, independent audit, applying international auditing 

standards. 

• 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. 

• This approach is extended to all companies included state-owned 

enterprises. 

• Civil society is actively engaged as a participant in the design, 

monitoring and evaluation of this process and contributes towards public 

debate. 

• 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. 

Source: EITI homepage, www.eitransparency.org
36

Appendix IV 

EITI Principles: 

The EITI Principles, agreed at the Lancaster House Conference in 

June 2003, provide the cornerstone of the initiative. They are: 

We share a belief that the prudent use of natural resource wealth 

should be an important engine for sustainable economic growth that 

contributes to sustainable development and poverty reduction, but if 

not managed properly, can create negative economic and social 

impacts. 

1. We affirm that management of natural resource wealth for the benefit 

of a country’s citizens is in the domain of sovereign governments to 

be exercised in the interests of their national development. 

2. We recognize that the benefits of resource extraction occur as revenue 

streams over many years and can be highly price dependent. 

3. We recognize that a public understanding of government revenues and 

expenditure over time could help public debate and inform choice of 

appropriate and realistic options for sustainable development. 

4. We underline the importance of transparency by governments and 

companies in the extractive industries and the need to enhance public 

financial management and accountability. 

5. We recognize that achievement of greater transparency must be set in 

the context of respect for contracts and laws. 

6. We recognize the enhanced environment for domestic and foreign 

direct investment that financial transparency may bring. 

7. We believe in the principle and practice of accountability by 

government to all citizens for the stewardship of revenue streams and 

public expenditure. 

8. We are committed to encouraging high standards of transparency and 

accountability in public life, government operations and in business, 

9. We believe that a broadly consistent and workable approach to the 

disclosure of payments and revenues is required, which is simple to 

undertake and to use. 
37

10.We believe that payments’ disclosure in a given country should 

involve all extractive industry companies operating in that country. 

11. In seeking solutions, we believe that all stakeholders have important 

and relevant contributions to make – including governments and their 

agencies, extractive industry companies, service companies, 

multilateral organizations, financial organizations, investors, and nongovernmental organizations. 
38

Drafted: EEB/ESC/IEC/ENR David Henry, x7-9062 

Approved: EEB David N. Nelson, Acting 

Cleared: EEB/ESC D Hengel (ok) 

 EEB/ESC/IEC S Gallogly (ok) 

 EEB/ESC/IEC/ENR P Secor (ok) 

 EEB/OMA A Snow (ok) 

 EEB/ODF R Leatham (ok) 

 D(L) J Butte-Dahl (ok) 

 D(S) P Park (ok) 

 E H Yon (ok) 

 H B Fitzgerald (ok) 

 L/EB T Schnabel (ok) 

 P L Rosenberger (ok) 

 S/P B Phipps (ok) 

 AF/EPS E Repko (ok) 

 DRL K Gilbride (ok) 

 INL/C D Kohn (ok) 

 USAID C del Castillo (ok) 

 Treasury N Katz (ok) 

 Energy G Person (ok) 

 OPIC D Jagadesan (ok) 

 Commerce M Cho (ok)