UK EITI Compliance subgroup meeting note, 11th October 2023

Mike Earp                                         Mark Russell                 Martyn Gordon                

Mark Burnett                                   John Bowater                 Hedi Zaghouani                

Helmi Ben Rhouma                        Mike Nash (Chair)

EITI Standard Tracker – look at new requirements and encouragements:

2.1 Implementing countries are required to disclose an overview of national energy transition commitments, policies and plans that are relevant to the extractive industries (Requirement).

• The UK EITI website has an energy transition section which provides a good overview of UK policy and plans. It was agreed that the MSG should be asked to look at the website and suggest anything that is missing and that should be included, including policy documents and publications. (Action: MSG to consider further information to add).
• It was agreed that Energy transition strategies from the devolved administration national plans should be added to the website, any manifesto commitments (when available), as well as the “Powering up Britain” policy paper. (Action: UK EITI Secretariat to add additional information to website).
• The subgroup agreed that a further column should be added to the tracker to highlight where the onus lies to meet each requirement e.g. the MSG, UK companies etc. (Action: UK EITI Secretariat to add column and complete the information).

2.1 Implementing countries are encouraged to disclose a summary description of carbon pricing mechanisms or carbon taxes that are material to the extractive industries (Encouragement).

2.1 Where the government is undertaking reforms including with respect to national energy transition commitments, policies and plans, the multi-stakeholder group is encouraged to document them (Encouragement).

2.1 Where applicable, implementing countries are encouraged to disclose policies related to the artisanal and small-scale mining sector, as well as information on planned or ongoing reforms (Encouragement).

• Data on UK ETS (Energy Trading Scheme) is publicly available on various websites. (Action: Mike Earp to provide links).
• MSG can decide whether the above encouragements are relevant and whether there is enough public interest. (Action: MSG to discuss and decide).

2.2In cases where governments can select different methods for awarding a contract or license (e.g. competitive bidding or direct negotiations), the multi-stakeholder group is encouraged to include an explanation of the rules that determine which procedure should be used and why a particular procedure was selected. This includes instances where governments use expedited or “fast-tracked” awards or transfer processes. The multi-stakeholder group must clearly document the rationale for this choice; the award or transfer processes to which these processes applied; the procedures and criteria used; the institutions involved; and the outcomes of the award and transfer processes (Requirement).

• There are “out of round” contract awards for NSTA, where contracts are awarded outside the usual awards process. The MSG will need to discuss and decide and then document whether the UK should report these awards under requirement 2.2. (Action: MSG to discuss and decide).
• Discussions by the MSG on contracts and licences should take place annually and should include any “fast track” or “non-trivial deviations”. (Action: UK Secretariat to include on future meeting agenda).

2.4 MSGs are required to determine which exploration contracts should be disclosed based on materiality and practical considerations (Requirement).

• It was agreed to revisit the contract and licence matrix and consider adding columns to indicate whether licences are for production or exploration. (Action: Working Group looking at the contract and licensing transparency issues to consider and include the split, where possible, on the contract and licence matrix).

3.2 Implementing countries are required to disclose timely production data, including production volumes and values by commodity. Data must be further disaggregated by project, where available. An estimate of production resulting from artisanal and small-scale activities must be disclosed where applicable and available (Requirement). 

3.2 The sources of and the methods for calculating production volumes and values must be disclosed. Implementing countries are required to disclose existing mechanisms to monitor and verify the accuracy of production data and document findings, including any weaknesses related to the comprehensiveness and reliability of publicly available production data (Requirement). 

3.3 Implementing countries must disclose how they monitor and verify the accuracy of production and export data, which is usually sourced from oil, gas and mining companies. An estimate of production and exports resulting from artisanal and small-scale mining should also be disclosed (Requirement).

• It was agreed that all three requirements should be looked at together.
• Need to check whether this data is already systematically disclosed and if not where it is available.
• Data by volume and project should be available to publish, but concerns were raised about the commercial confidentiality of disclosing data by value. It was agreed that a discussion paper should drafted for the MSG to consider. (Action: Mike Earp and John Bowater to jointly draft a discussion paper for the MSG).

4.10 Countries are required to disclose how they monitor companies’ costs and to publish, at minimum, summaries of final tax and cost audits. Companies and governments are encouraged to disclose capital and operating expenditures declared by companies, as well as total costs incurred since the commencement of the project (Requirement).

• It was agreed that HMRC should be included in discussions on this requirement and that a guidance note from the International Secretariat would be useful. (Action: UK Secretariat to invite Leo Kellaway to next Compliance subgroup meeting and EITI International Secretariat to consider producing a guidance note for this requirement).

It was agreed that the next Compliance subgroup meeting should take place in November before the next MSG meeting on 22^nd November. (Action: UK Secretariat arranged a further meeting on 8^th November).