Sierra Leone Extractive Industries Transparency Initiative (SLEITI)

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Candidacy

Sierra Leone signed onto the Extractive Industries Transparency Initiative (EITI) in 2006 and launched the Sierra Leone Extractive Industries Transparency Initiative (SLEITI) in 2007.[1] It was accepted as an EITI candidate country on 22 February 2008.[2] However, its candidature was suspended for one year in March 2013[3] because the latest validation report indicated that certain EITI requirements remained unmet.[4]

In order to lift the suspension, the EITI Board asked Sierra Leone to complete four remedial actions.[5] If the actions are not taken and the suspension extends beyond 27 February 2014, the Board would consider delisting the country.[6]

Governance

The SLEITI governance consist of:

  • the SLEITI Champion providing for the political leadership of the initiative[7] (as of April 2013, the position is held by Dr. Keifala Marrah) [8]
  • the Multi-Stakeholder Group (MSG) consisting of a membership of over 20 representatives from mining companies, government ministries, departments and agencies, civil society organizations including the media[9]
  • the Secretariat which provides the technical support to the MSG and ensures that decisions agreed at meetings are implemented, monitored and reported on[10]

Validation reports

First validation report

Sierra Leone produced its first EITI report in March 2010 and submitted its final validation report to the EITI Secretariat in September 2010.[11]

Upon review of the validation report covering data from 2006 till 2007, the EITI International Board found Sierra Leone to have fallen short on several aspects of implementation, namely:[12]

  • that the report lacked a materiality clause
  • that the report did not indicate what portion of total mining revenues was covered by the nine commercial entities (six companies and three export dealers) and that only one of these companies was engaged in diamond mining
  • that companies contributed to an agricultural fund, although no details were given on how this fund was allocated
  • that there was a question of data reliability and that several companies might have revised their data to match the government data without providing supporting materials

Second validation report

The country published its second EITI report on 24 September 2012 revealing that the government received a total of US $ 18.5 million in revenues between 2008 and 2010.[13].

The reconcilation exercise, however, revealed that 2 out of 18 benchmarks had not been met.[14] The first major problem was that data compiled by the Mining Cadastre Administration revealed that 27 companies holding small-scale mining licenses had made payments exceeding the US $4,000 materiality threshold set by the SLEITI, while the SLEITI multi-stakeholder group had only reported on four companies.[15] Other major problems included that:[16]

  • several local councils and chiefdoms in mining areas did not return reporting templates
  • there were significant discrepancies in revenue declarations by the National Revenue Authority (i.e. more money was collected than accounted for)
  • several revenue streams were excluded without explanation

Remedial actions

The EITI Board has suggested several corrective measures for the second reconciliation exercise which could be addressed by Sierra Leone publishing a supplementary 2010 EITI Report, or through an 2011 EITI Report to be published before 31 December 2013.[17] Specifically the Board recommended that the government ensure that:[18]

  • all relevant companies and government entities participate in the reporting process (in accordance with Requirement 11).
  • the disclosures from government entities, particularily sub-national entities, are based on accounts audited to international standards (in accordance with Requirement 13).
  • all companies disclose all material payments in accordance with the agreed reporting templates
  • if companies are no longer operating in the country, the government should unilaterally disclose all payments received (in accordance with Requirement 14)
  • all government agencies comprehensively disclose all material revenues in accordance with the agreed reporting templates (in accordance with Requirement 15).

References

  1. "Strategy Review". Sierra Leone Extractive Industries Initiative, retrieved 25 October 2013.
  2. "Strategy Review". Sierra Leone Extractive Industries Initiative, retrieved 25 October 2013.
  3. Political Economy of Extractives: Governance in Sierra Leone”. Fanthorpe, R. and Gabelle C., 2 July 2013.
  4. Status Changes Enacted for 7 EITI Countries”. Revenue Watch Institute, 1 March 2013.
  5. Sierra Leone: Overview”. EITI, retrieved 25 October 2013.
  6. Sierra Leone: Overview”. EITI, retrieved 25 October 2013.
  7. "Advisory Board". Sierra Leone Extractive Industries Initiative, retrieved 25 October 2013.
  8. Second EITI validation unearths whopping $6M discrepancy”. GOXI Blog Posts, 3 April 2013.
  9. "Advisory Board". Sierra Leone Extractive Industries Initiative, retrieved 25 October 2013.
  10. "Secretariat". Sierra Leone Extractive Industries Initiative, retrieved 25 October 2013.
  11. "Sierra Leone: Transparency Snapshot". Revenue Watch Institute, retrieved 25 October 2013.
  12. "EITI Reports, Results and Analysis: Sierra Leone". Revenue Watch Institute, retrieved 25 October 2013.
  13. "EITI Sierra Leoneans' revenues from natural resources: 1 dollar per year". Revenue Watch Institute, 3 October 2013.
  14. Political Economy of Extractives: Governance in Sierra Leone”. Fanthorpe, R. and Gabelle C., 2 July 2013.
  15. Political Economy of Extractives: Governance in Sierra Leone”. Fanthorpe, R. and Gabelle C., 2 July 2013.
  16. Political Economy of Extractives: Governance in Sierra Leone”. Fanthorpe, R. and Gabelle C., 2 July 2013.
  17. Sierra Leone: Overview”. EITI, retrieved 25 October 2013.
  18. Sierra Leone: Overview”. EITI, retrieved 25 October 2013.