Towards Full Membership: Afghanistan Extractive Industries Transparency Initiative (AEITI)

Yesterday, a six-day workshop on transparency and publishing beneficial owners in the Afghan mining sector ended in New Delhi, India. 13 representatives of AEITI and the involved multi-stakeholder group consisting of relevant actors from the governmental, civil society and private sectors participated. The Afghan-German Cooperation’s programme for promoting good governance in the Afghan extractive sector supported the workshop technically and financially. Disclosing beneficial ownerships is a condition for full EITI membership.

EITI is a global standard for governing a country’s oil, gas and mineral resources. Governments together with companies and civil society implement the standard. Countries applying to EITI disclose information on tax payments, licenses, contracts, production and other key elements of natural resource extraction. Afghanistan is a candidate for full membership since 2010. At the Brussels Conference on Afghanistan on 5th October 2016, President Ashraf Ghani reconfirmed Afghanistan’s commitment to disclosing beneficial ownerships in the mining sector.

At the workshop, the head of the Ministry of Commerce and Industries’ (MoCI) Central Business Registry, Mr Ahmad Tariq Sarfaraz, emphasised, “We should focus on beneficial ownership disclosure that includes politically exposed persons. We need to understand who really profits from activities in the extractive sector to ensure accountability, to fight corruption and to promote growth.”

AEITI’s multi-stakeholder group had developed a roadmap for implementing the disclosure of beneficial ownerships by 2020 – a major EITI requirement for full membership. At the workshop, the participants discussed the document as well as the AEITI annual operation plan for 2018. The EITI international secretariat team will visit Afghanistan for full membership validation in January 2018.

AEITI’s national coordinator, Mr Abdul Rahman Farhan, commented, “The updated operational plan, the beneficial ownership road map and the list of recommendations we have worked on are important documents. They help the government, the private sector, and civil society to understand their role and responsibilities in the EITI process.”

The previous AEITI report had identified several problems such as revenue losses due to uncollected taxes in the provinces, limited information on company tax payments, as well as incomplete company filings of financial records and contracts.  To tackle these problems, the participants prepared the upcoming sixth AEITI Reconciliation Report. The report will publish private sector payments to the government and reported governmental revenues to increase transparency in the mining sector. It will further offer recommendations for managing mining operations more transparently and efficiently.

To promote transparency and fight corruption in the Afghan mining industry, the German programme for promoting good governance in the Afghan extractive sector has been supporting Afghanistan to become a full EITI member since 2014. Among other activities, the programme conducts capacity development workshops for AEITI employees and finances trips to international EITI conferences.  Further, it technically assists the initiative on a regular basis when preparing documents such as the beneficial ownership disclosure roadmap and annual operational plan.

The programme Promoting Good Governance in the Extractive Sector in Afghanistan is implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Ministry of Economic Cooperation and Development (BMZ). To fully leverage the Afghan mining sector’s potential, the programme aims at increasing state revenues, promoting investment and fighting corruption in the sector. The project trains stakeholders to ensure that mining activities are carried out transparently and according to law as well as international health and environmental standards. Among other activities, the project has organised 21 training courses on topics such as mine planning, mining economics and mining supervision for more than 310 mining inspectors and other employees at the Ministry of Mines and Petroleum (MoMP) and provincial authorities since 2013. At the same time, the programme has financed 13 scholarships for Afghan women to promote female participation in the sector.

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