Facing Challenges, Burma Seeks Extractive Sector Transparency by 2016

By Zarni Mann 15 August 2013

Resource-rich Burma has completed two of four steps in its bid to apply for Extractive Industries Transparency Initiative candidature, but the murky legal environment in which civil society groups exist is posing challenges as the government strives to meet the third requirement.

The government publicly announced in mid-2012 that the country intended to implement the international governance standard known as EITI, fulfilling the first candidature requirement. That was followed by the appointment of a senior cabinet official to lead a team charged with implementing the EITI. The commission is headed by Union Minister Soe Thein, with the ministers of environmental conservation, mines, energy and finance as members.

In the third step, Burma must commit to working with civil society organizations and companies and establish a multi-stakeholder group to oversee EITI implementation.

With Burma’s abundance of natural resources like oil, gas and mineral deposits, supporters of the EITI bid say EITI compliance will improve the country’s investment climate, providing a clear signal to investors and international financial institutions that the government is committed to greater transparency.

The Norway-based EITI aims to strengthen accountability and good governance, as well as promote greater economic and political stability. In Burma, where most of the untapped resource wealth and many of the ethnic armed rebel groups are both concentrated in the country’s border regions, political stability and extractive industries governance are seen as particularly intertwined.

According to the Myanmar EITI cooperation office (MEITI), the country is facing challenges as it moves on to the third phase of implementation.

“There are many things to think about the civil society organizations because we have many in the country that are not registered yet due to several reasons. We are still working on it,” said Min Zar Ni Lin, deputy team leader for MEITI.

Fearing political movements and unrest in the country, Burma’s former military government heavily restricted civil society organizations. As some have gradually been allowed more freedom to work since President Thein Sein set the country on a path of democratic reform, activists have set up new civil society groups for a range of causes. However, the legal framework in which these groups operate is still in flux as Parliament considers an Association Bill to govern their formation, rights and responsibilities.

Only a few civil society organizations are officially registered, while many are awaiting word from the government on their registration applications.

“We still need to create the awareness of international standards and laws among domestic businesses as well as make sure the country’s economy is functioning in line with international standards and laws,” Min Zar Ni Lin said. “It will take time, but hopefully we will be a compliant country by 2016 or 2017.”

The fourth requirement to qualify for EITI candidature calls for the multi-stakeholder to create a work plan for how the country will meet the initiative’s global standards. Thein Sein has said Burma aims to apply for candidature status by the end of this year.

For decades under military rule, Burmese citizens were left in the dark on government spending, foreign investments in the country and details of extractive industries projects undertaken. Mandatory public reporting requirements in the industries and mechanisms to facilitate transparency are still lacking.

“The big challenges for the first years will be the reporting of actual revenue and tax [receipts]. There will be problems on who will confirm the accuracy of data given by the government and multi-stakeholders,” Min Zar Ni Lin said.

“However, we believe we can overcome these problems because EITI has controls such as issuing warnings and blacklisting those who do not comply with the rules and who provide incorrect data,” he added.

Helene Johansen, the EITI communications officer in Norway, said limited public access to information about the sector is one of the challenges facing EITI implementers, especially given the large and complex nature of the extractive industries.

“The most common challenges relate to producing EITI reports that give a complete picture of total revenues received from the extractive sector. Another common challenge is to ensure that this data is reliable and used to inform public debate,” she said.

Burmese civil society groups say they have a vital role to play as a watchdog to ensure that data submitted under the EITI is reliable and correct.

“Educating the people of Burma and capacity building is also important. From that, we could inform the relevant authorities if the government or multi-stakeholders are cheating,” said Devi Thant Cin, a prominent environmental activist.

“The policy and the mindset of the government regarding the CSOs [civil society organizations] and its citizens needs to be clear and trust-building between the two parties is vital,” she added.

Currently, some unregistered civil society groups in Burma are facing the prospect of legal troubles, accused of threatening the stability and security of the state.

“I believe all these hardships will be worked out in very short time once we are with EITI and have more transparency and we can reduce some corruption. We can learn from the lessons of Indonesia to make sure we do not delay in publishing reports as well,” Devi Thant Cin added, referring to that country’s failure to meet certain reporting deadlines.

According to the transparency initiative, the EITI process in Indonesia suffered from challenges related to national procurement procedures, delays in funding and the associated complexities of the extractive industries sector. Indonesia has met the four pre-candidature requirements and is being considered for compliant status.