Initiating Transparency: Sao Tome and Principe

1
Initiating Transparency Sao Tome and Principe

• Presentation to EITI Implementation Work Shop
• Paris, France, February 2-3, 2005
• Joseph C. Bell
• Hogan Hartson LLP
• Member of Earth Institute Advisory Group
• Sao Tome and Principe
• jcbell_at_hhlaw.com

2
Oil Revenue Management Law

• Adopted by National Assembly and signed by
  President December 29, 2004
• Establishes Oil Fund
• Establishes Transparency Mechanisms
• Buttressed by Abuja Declaration

3
The Oil Account

• All oil receipts, broadly defined, paid into fund
  electronically
• Single account held by international custodian
• Single annual withdrawal to the budget
• Withdrawals limited so as to create permanent
  fund to maintain expenditures after resource is
  exhausted

4
Transparency Mechanisms

• Public Information Office
• Provides hard copy
• Web posting
• Petroleum Oversight Commission
• Broad powers to investigate
• Membership includes government officials,
  opposition, civil society. No international
  representatives

5
Transparency Mechanisms (cont.)

• Legally requires disclosures (govt. and
  companies)
• Payments
• Contracts
• Mandatory Audits
• Audit chamber
• International accounting firm
• Self implementing measures
• Company filings
• Web posting of account by custodial bank
  envisioned providing universal direct access to
  information

6
Abuja Joint Declaration

• Abuja Joint Declaration signed by Presidents
  Obasanjo and deMenezes
• Governs two countries Joint Development Zone
• Requires broad disclosures of individual company
  payments and contracts in JDZ
• Saotomean Law recognizes the application of the
  Abuja Joint Declaration to JDZ

7
Further Information on Law

• English and Portuguese copies of the law, Abuja
  Joint Declaration, and background information
  available at http//www.earthinstitute.columbia.ed
  u/cgsd/STP/index_stp.htm
• Short description of the law available at
  http//www.legalbrief.co.za/article.php?story2005
  0203173501996

8
Support for the Law/Transparency

• Supportive political and social environment
• Small, democratic state
• we are all cousins
• Strong leadership in support of the law
• President deMenezes
• Ad hoc Oil Committee

9
Other Incentives

• International carrots and sticks
• HIPC debt relief
• Technical Assistance
• Response to attempted coup
• Agreement to public forum

10
Building Consensus

• Education of the elite
• World Bank/UNDP seminar
• Earth Institute programs in NYC
• Good technical support
• The National Forum
• 55 meetings around the country (one meeting for
  every 3,000 citizens)
• Education, sampling public opinion, and building
  consensus

11
Making it Sao Tomes Own

• Ad hoc Oil Committee
• Wide political representation President,
  government, national assembly, opposition
• Lengthy process of modification and adjustment of
  expert drafts to Saotomean values and
  institutions
• Process built ownership