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Assessing Transparency:

Development Finance Institutions, ExpCredit Agencies,

and Extractive Industries

Jonathan Leonard and Alix Schroder

December 15, 2014

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Amir Shafaie & Erica Westenberg

Client

If mining companies and governments published all their mutual transac

would prevent corruption, extortion and loss of revenues, and ultimate

inclusive development, equitable redistribution of wealth and a healthy enviro

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Central Assumptions

1. Increased transparency requirements forpayments from extractive industry compansovereign governments will serve to mitigadispel the resource curse

2. International Finance Institutions (IFIs)finance extractive industry projects arlevers for a achieving this type of transpar

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The research conducted

School students relates tDirect Investment (FDI) inindustry companies.(investments from abroad

It is an examination of thetransparency requiremenlendees concessionary with the sovereign govethe extraction site.

International Financing

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To determine IFI transparency and disclosure policies as t

private sector investment and sovereign risk guarantees in tsector (oil, gas, and minerals).

To determine how new laws related to transparency and disclFrank 1504 and the EU Transparency and Accounting Dire

apply to private sector investments financed through DFIs and

Purpose of Research

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International Finance

Institutions (IFIs)

Extractive Industry

Companies

Soverei

of Ex

Process

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International Finance

Institutions (IFIs)

Extractive Industry

Companies

Soverei

of Ex

Research Topic

Does this contractRequire disclosure of

payments for this contract?

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Export Credit Agencies (ECAs

Investment banks are infused with the power of their sovereign governme

money to domestic companies for their activities abroad. They are unabasexplicitly motivated by the financial promotion of national economic interest

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Development Finance Institutions (

Institutions, created by a group of countries, to provides financing for the purpose o

MDBs have large memberships including both developed donor countries and dev

countries.

The most commonly known MDB is The World Bank

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State Laws Mandating EI Transpar

Dodd-FrankSection 1504

The Extractive Sector Transparency Measures Act

EU Transparency and Accounting Directives

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Global Frameworks Promoting Trans

Countries implement the EITI Stan

full disclosure of taxes and other p

by oil, gas and mining companies to

A global network of civil society

united in their call for an open an

extractive sector.

Has a sustainabilityframeworkcrea

(part of the World Bank) to e

transparency and accountability of its

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Most development finance intuitions had some form o

transparency and disclosure requirements (IFC, MIGA, EBAfDB).

Implementation of policies is weak and not sufficiently disaggreg

Several have very weak or no policies (IDB, ADB, JBIC).

EU Accounting and Transparency Directives and Dodd-Frank

implemented) will increase disclosure, but would not apcompanies receiving financing.

Research Findings

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IFC MIGA EBRD IBD AfDB ABD JB

Oil & Gas Mining Oil & Gas Mining Oil & Gas Mining Oil & Gas Mining Oil & Gas Mining Oil & Gas Mining Oil & Gas

# of

Projects30 37 7 5 14 16 N/A N/A N/A N/A 6 N/A

# of

Countries 23 225 5 3 N/A N/A N/A N/A N/A N/A N/A N/A N/A

Total

Portfolio

$2 billion

(2013)

$500

million

(2013)

$918.4

million

(2013)

$240

million

(2013)

$1.5

billion*

(2004-

2013)

$1

billion*

(2004-

2013)

$50.8 million*

(2008-2012)

Est. $1.6 billion*

(1990s-2013)

$500 million*

(2003-2013)

Estima

billion*

20

1.1 IFI projects, countries, and total portfolio amount

IFIs Extractive Industry Portfoli

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IFC MIGA EBRD AfDB OPIC ADB IDB

Revenue and

Payment

Disclosure

Satisfactory Partial Partial Weak Partial Weak Failing

Contract

DisclosurePartial Partial Weak Weak Partial Weak Failing

Mechanisms

of ComplianceSatisfactory Satisfactory Partial Partial Weak Weak Weak

Accessibility

of InformationPartial Partial Partial Partial Weak Weak Weak

Score 10 9 7 6 6 4 2

1.2 Comparative Strength of Transparency, Accountability, and Accessibility

IFIs

Ranking of IFIs

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Existing policies on payment disclosure and transparency s

strengthened and properly implemented. Data should be disaggregated on a project by project basis

DFIs should adopt EITI standards.

Dodd-Frank 1504 rules on payment disclosure should be reand implemented as soon as possible.

Advocacy Recommendations

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