29 August 2012
To define the scope and function of the Multi-Stakeholder Group (MSG) formed to direct Australia’s pilot for the Extractive Industries Transparency Initiative (EITI).
Objectives of the Australian pilot of the EITI
The aim of the Australian domestic pilot of the EITI is to test the applicability of EITI principles and criteria in the Australian context and inform the Government’s decision on whether Australia should move to full implementation of the EITI.
The outcomes of the pilot will be presented in an Administrator’s report to the MSG (the report). The report will also disclose all material revenues and payments within the scope of the pilot. The pilot will be guided by the MSG with advice of the MSG sub-groups.
The pilot’s objectives are therefore to:
- test the applicability of EITI rules and principles to existing governance and transparency arrangements for revenues and payments across the Commonwealth and State and Territory governments and the Australian extractive resources sector, and whether there are any possible enhancements of the EITI methodology that might be appropriate for Australia
- identify the costs, benefits and challenges of domestic implementation of the EITI, particularly for industry, community and Commonwealth and State and Territory government stakeholders, to inform any decision by the Commonwealth Government on whether Australia should move to full implementation
- identify any knowledge and transparency gaps with respect to extractive industry revenues and payments and assess the costs and benefits of the reporting process and outcomes
- assess the potential implications and benefits, internationally, of Australian EITI implementation, including increased engagement with EITI implementing and support countries.
Role of the MSG
The MSG is established in order to ensure that views of key stakeholders are taken into account in the direction and conduct of the pilot. Under EITI rules, national MSG play the central role in determining how each candidate country implements EITI. Overseeing the pilot through an MSG will therefore help identify and anticipate issues that would need to be addressed were Australia to implement EITI, as well as in establishing a degree of consensus on how implementation might proceed. It could also save time and resources at the implementation stage insofar as much of the initial work undertaken by the MSG might not need to be repeated.
The MSG will provide direction to the Australian pilot of the EITI to ensure that the pilot meets its objectives. It will be responsible for developing and endorsing an EITI work program, scope of pilot, actions, sequencing, timetable, responsible parties, costs, communications and funding sources. Specifically, the MSG will:
- develop and apply a work plan and communications plan for the term of the pilot
- establish and support any sub-groups to examine specific issues, which may include the engagement of an Administrator, and preparation of reporting templates and evaluation methodology
- agree on an appropriate definition of “extractive industries” and “materiality” for the purpose of the pilot
- define and assess the scope of revenues and payments to be covered by the pilot;
- work within Australian laws and regulations
- analyse and map established data collection and reporting mechanisms, and governance and compliance arrangements operating in the Commonwealth and State and Territory stakeholder jurisdictions, utilising appropriate aggregated revenue and payment datasets
- identify, assess and report, through a systems analysis any material deficiencies in existing reporting and reconciliation mechanisms and arrangements in comparison with EITI requirements
- develop the Terms of Reference for and select an independent Administrator to provide advice to the MSG
- develop and agree on the format of the report
- develop the Terms of Reference for and select an independent Evaluator
- develop recommendations to Government on whether moving to full EITI implementation is appropriate in the Australian context.
It is recognised that the MSG has flexibility to adapt EITI principles to Australian circumstances when developing and implementing the EITI pilot. These adaptations will be disclosed in EITI pilot related reporting as appropriate. The MSG may engage in other tasks as it considers appropriate, consistent with the stated objectives and its Terms of Reference.
The MSG will be chaired by the Commonwealth Department of Industry. The EITI MSG shall consist of a 7/7/7 split of industry, government (Commonwealth and up to 4 States and Territories) and civil society. Industry, in consultation with their peak representative bodies will select its membership and will represent both the onshore and offshore extractive industries sector and different company profiles. Civil society membership will be self elected and cover a broad range of civil society interests. Government will select its Members through an Inter- Departmental Committee (IDC) and direct engagement with participating States and Territory governments, and possibly local government.
Term of membership
Members shall be appointed for the duration of the pilot. While the tripartite nature of the group must be maintained (i.e. government, extractive industry companies, and civil society must always be represented), the group may agree by broad consensus at any time to change, add, or reduce the number of Members. The MSG shall exist only for the duration of the pilot and will be disbanded once the Australian government has accepting the reported finding of the MSG. Should the decision be made to pursue full EITI implementation, a process will be established which could include formation of a new MSG with its own Terms of Reference.
The MSG shall meet monthly or as otherwise agreed until the pilot is completed and its findings published.
The Chair will set the agenda for meetings. The meeting announcement, agenda, and any background documents shall be circulated to MSG Members a minimum of one week before the meeting date. The Chair and MSG shall be supported by the Department of Industry acting as Secretariat. The Secretariat shall conduct all coordination and administrative functions necessary to support the MSG and ensure the fulfilment of its outlined responsibilities. If there are any necessary or urgent issues which need to be discussed and decided, the Chair will call an extraordinary meeting.
The Chatham House Rule will apply to meetings and to the minutes of meeting discussions to be kept by the Secretariat. Minutes of meetings (respecting the Chatham House Rule) will be circulated to the MSG and will be made publicly available after agreement among the Members. Members and observers should respect that differences of opinion may arise during the development of a final work plan and should refrain from engaging in public discourse which would be disruptive to the development of a draft work plan prior to release for public review and commentary.
All MSG members and observers shall respect and not discuss outside of MSG meetings any sensitive information that may become available at any point during the period of the EITI pilot, and will sign confidentiality agreements on or before the second MSG meeting. All instances of failure to adhere with this confidentiality agreement would be reviewed by the MSG and may result in dismissal from any further participation in MSG meetings.
The Pilot's MSG will make decisions on the basis of consensus wherever possible. Where consensus is not possible the decision-making principles and voting rules will be applied.
The MSG has established a Decision-Making Protocol for the Pilot which identifies:
- how decisions will be made, including consensus requirements and a 3 tiered decision-making hierarchy that applies if consensus cannot be reached
- how members can be represented in decision-making if they are not able to be present at a meeting
- how abstentions will be managed.