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Mining Industry Anticipates Receiving a ‘Passing Score' on the EITI's Transparency Validation.

by Philippine Resources - April 12, 2021

The Philippines' Chamber of Mines (COMP) expressed hope in completing the Extractive Industries Transparency Initiative (EITI) validation process, which began on April 1, 2021.

The validation is an evaluation of adopting countries' willingness to follow EITI requirements, and it is the second to be completed since 2017.

The countries will be graded on three aspects of the validation process: 1) stakeholder engagement—involvement of all government, business, and civil society stakeholders 2) transparency—requirements for accountability, such as a beneficial ownership registry; and 3) results and impact—addressing national interests in natural resource governance.

The EITI Board is scheduled to report the final outcome of the validation in the fourth quarter of 2021.

The Philippines was found to have made "satisfactory progress" in the first validation in 2017, making it the first EITI adopting country to reach such status, according to COMP. The industry remains committed to the EITI benchmark, with 95 per cent of active mines filing their accounts, according to COMP Executive Director Ronald Recidoro.

“The Chamber of Mines of the Philippines looks forward to the validation. We hope to still be at the forefront of this transparency initiative just as we were in 2017 under the old standard,” he said.

COMP member-companies, at the very least, had been doing disclosure monitoring on their own, according to Recidoro, even before it became mandatory.

“We have done a lot to move transparency reporting in the Philippines, including reporting on gender, environmental protection, etc., which is only now being made mandatory under the new standard,” he said.

The validation, according to Bantay Kita, a civil society delegate to the Philippine EITI Multi-Stakeholder Community (PH-EITI MSG), is an opportunity to address problems in adopting the EITI and how it can be more applicable at both the national and sub-national levels.

“Over the past months, the PH-EITI MSG has been working to gather all evidence to show progress in the Philippines. All stakeholders, not only civil society, have contributed to communicating EITI data and initiated outreach activities from local communities to policy-makers,” Vincent Lazatin, national coordinator of Bantay Kita, said in a news statement.

“Stakeholders involved in the validation process would be honest and able to articulate what really is happening on the ground with the transparency initiative of extractive industries in our country. Beyond aiming to be on top, the one of greater value is knowing the real score, the PH-EITI’s actual situation, and how we can perform better,” said Aniceta Baltar, a civil society representative to the PH-EITI MSG.

“The validation looks at how it continues to execute its mandate, and at what level it does. It also gauges what positive impacts the initiative were able to bring across to its constituents and stakeholders,” she added.

When pressed for more details, Recidoro stated that COMP, as a founding member of the PH-EITI, is committed to continuing to participate in the validation process.

According to him, the 2019 EITI validation standard includes additional provisions such as documentation on gender and environmental spending, as well as the contentious question of beneficial ownership (BO).

“The PH-EITI has been reporting on gender and environmental expenditure since 2012, so we are ahead of the curve in that regard. We piloted beneficial ownership reporting last year,” Recidoro said.

However, he said, “BO reporting will still need some work.”

“We need SEC [Securities and Exchange Commission] to take the lead on this so that it doesn’t become redundant,” he said.

“There are also concerns about data privacy,” Recidoro added.

He clarified that the EITI requires businesses to report ownership information, but that this is already being done with the SEC.

When it comes to BO news, Recidoro believes the SEC needs to establish a consistent policy or set of guidelines.

“Beneficial ownership disclosure is already part of the annual general information sheet [GIS], but the issue now is publication. SEC does not make that beneficial ownership disclosure public because of data privacy concerns,” he explained.

The GIS is an annual filing with the Securities and Exchange Commission (SEC) in which businesses report on their specific corporate details and shareholders, among other things.

Every year, businesses must send a different GIS form containing their organizational results, according to Recidoro.

“Since last year, that GIS now has a beneficial ownership report portion. The GIS is available for download with the SEC, but the BO portion is redacted.  Because of data privacy concerns,” he said.


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