International Financial Institutions: Transparency and disclosure requirements for the extractive sector Development Finance Institutions Class of The Resource Curse, Fall 2013, The New School University 2 Table of Contents Introduction ............................................................................................................................... 5 List of Acronyms ........................................................................................................................ 6 1 International Finance Corporation ................................................................................. 7 1.1Extractive Sector Profile ....................................................................................................... 7 1.2Transparency in the Extractive Sector ............................................................................. 7 1.3Requirements Regarding Contract, Revenue, and Payment Disclosure .............. 7 1.3.1Revenue and payments ................................................................................................................ 7 1.3.2Accessibility of disclosed revenue and payments: ............................................................ 8 1.3.3Contracts............................................................................................................................................. 9 1.3.4Accessibility of disclosed contract information: ............................................................. 10 1.3.5Additional disclosed information .......................................................................................... 10 1.4Enforcement and Compliance .......................................................................................... 10 1.5Gaps and weaknesses .......................................................................................................... 11 1.6Recommendations ................................................................................................................ 11 2 Multilateral Investment Guarantee Agency .............................................................. 12 2.1Extractive Sector Profile .................................................................................................... 12 2.2Transparency in the Extractive Sector .......................................................................... 13 2.2.1Comparison to IFC Sustainability Framework ................................................................. 15 2.3Requirements Regarding Contract, Revenue, and Payment Disclosure ........... 15 2.3.1Revenue and payments disclosure ....................................................................................... 16 2.3.2Contract disclosure ..................................................................................................................... 16 2.3.3Additional disclosure requirements .................................................................................... 17 2.4Enforcement and Compliance .......................................................................................... 17 2.5Gaps and Weaknesses ......................................................................................................... 18 2.6Recommendations ................................................................................................................ 19 3 European Bank for Reconstruction and Development ......................................... 20 3.1Financing in the Extractive Sector .................................................................................. 20 3.2Transparency and Accountability Policies .................................................................. 22 3.3Access to Information ......................................................................................................... 23 3.4Enforcement Mechanisms ................................................................................................. 25 3.5Dodd-Frank, EU Directives and IFC Sustainability Framework ........................... 25 4 Inter-American Development Bank ............................................................................ 27 4.1Financing in the Extractive Sector .................................................................................. 27 4.2Transparency and Accountability Policies .................................................................. 28 4.3Access to Information ......................................................................................................... 29 4.4Enforcement Mechanisms ................................................................................................. 29 4.5Dodd-Frank, EU Directives, and IFC Sustainability Framework .......................... 29 5 African Development Bank ............................................................................................. 30 5.1Extractive Sector Profile .................................................................................................... 30 5.2Transparency in the extractive sector .......................................................................... 30 5.3Requirements regarding revenue, payments, and contract disclosure ............ 32 5.4Enforcement and Compliance .......................................................................................... 32 5.5Gaps and weaknesses .......................................................................................................... 33 5.6Recommendations ................................................................................................................ 34 3 6 Asian Development Bank ................................................................................................ 36 6.1Supporting Energy Infrastructure and Governance................................................. 36 6.2Methodology ........................................................................................................................... 36 6.3Data Collection ....................................................................................................................... 37 6.3.1Scope and Size of the Problem ................................................................................................ 37 6.3.2Transparency Policy and Execution ..................................................................................... 37 6.4Gaps in ADB Policy and Recommendations ................................................................ 38 7 Japan Bank for International Cooperation................................................................ 40 7.1Extractive Sector Profile .................................................................................................... 40 7.2Transparency in the Extractive Sector .......................................................................... 40 7.3Requirements regarding revenue, payments, and contract disclosure ............ 41 7.3.1Revenue and payments: ............................................................................................................ 41 7.3.2Contracts.......................................................................................................................................... 41 7.3.3Additional disclosed information .......................................................................................... 41 7.3.4Enforcement and Compliance ................................................................................................. 41 7.3.5Gaps and weaknesses ................................................................................................................. 41 7.3.6Recommendations ....................................................................................................................... 42 7.4Development Finance Power Map .................................................................................. 42 7.4.1Relevant stakeholders and decision makers .................................................................... 42 7.4.2Relevant advocates and potential allies/ Potential areas of influence .................. 42 8 Overseas Private Investment Corporation................................................................ 43 8.1Supporting Private Finance and Investment with a Development Agenda ..... 43 8.2Decreasing Investments in Extractive Projects in Favor of Renewables .......... 43 8.3Methodology ........................................................................................................................... 44 8.4Data Collection ....................................................................................................................... 45 8.4.1Scope and Size of the Problem ................................................................................................ 45 8.5Transparency ......................................................................................................................... 46 8.5.1Payment and Contract Disclosure ......................................................................................... 46 8.5.2Mechanisms of Compliance ..................................................................................................... 47 8.5.3Accessibility of Information .................................................................................................... 48 8.5.4Comparison of Coverage ........................................................................................................... 48 8.5.5Recommendations ....................................................................................................................... 48 9 Annexes ................................................................................................................................. 51 9.1International Finance Corporation ................................................................................ 51 9.1.1Power Map ...................................................................................................................................... 51 9.1.2Tables and Charts ........................................................................................................................ 55 9.2Multilateral Investment Guarantee Agency ................................................................ 62 9.2.1Power Map ...................................................................................................................................... 62 9.2.2Tables and Charts ........................................................................................................................ 64 9.3European Bank for Reconstruction and Development ........................................... 67 9.3.1EBRB Draft Mining Strategy .................................................................................................... 67 9.3.2Criticisms of the EBRD Mining Operations Policy .......................................................... 68 9.3.3EBRD Public Information Policy ............................................................................................ 69 9.3.4EBRD Administration Tribunal Case Study ....................................................................... 70 9.3.5EBRD Financed Extractive Industry Projects ................................................................... 71 9.3.6Transcript of EBRD-related Interviews .............................................................................. 71 9.3.7EBRD Financed Extractive Industry Projects ................................................................... 76 9.4Inter-American Development Bank ............................................................................... 77 4 9.5African Development Bank ............................................................................................... 77 9.6Asian Development Bank ................................................................................................... 77 9.7Japan Bank for International Cooperation .................................................................. 78 9.8Overseas Private Investment Corporation .................................................................. 80 9.8.1Power Map ...................................................................................................................................... 80 9.8.2OPIC Extractive Projects ........................................................................................................... 80 9.8.3Communication with OPIC regarding Policy inquiry .................................................... 81 5 Introduction Terra Lawson-Remer, J.D., PhD, Assistant Professor, The New School Manuel Valderrama Florez, PhD Student, The New School ThepresentreportisproductofacollaborativeresearchprojectbetweenRevenueWatch Institute and the Studley Program in International Affairs at The New School University. The project sought to provide background analysis for potential broad-based coalition efforts to improveglobalgovernanceofextractiveindustriesbypromotingthetransparentand accountable management of oil, gas and mineral resources. For this, the research addressed twomaintopics:a)transparencyanddisclosurerequirementsintheofficialdevelopment finance(privatesectordevelopmentloansandsovereignriskguarantees)frombilateral import-exportcreditagenciesandmultilaterals,andb)beneficialownershipinthe extractiveindustriessector.Thesedistinctarmsweredevelopedthroughtworespective deliverables. All research and the respective deliverables were executed and written by the class of the Resource Curse course of the fall semester of 20131. Themainobjectiveofthefirstarmoftheresearchprojectwastoexaminethecurrent requirementsofInternationalFinanceInstitutionsregardingrevenue,payment,and contractdisclosure.Inadditiontomappingthesesaidrequirements,theprojectalso assessedhowdidthesecomparetothoseincludedinthe2012IFCSustainability Framework,andtonewUS-EUmandatorydisclosurerulesthroughstockmarket regulations (e.g., Cardin-Lugar); examined the different enforcement mechanisms deployed by all IFIs; determined the accessibility of the information that was being disclosed if any-; and,estimatedthecoverageofstockmarketregulationsintermsofprojectsandcapitalwherepossible-.TheresearchersusedexistingRWIcommentsonIFIpolicies(e.g.EBRD andUSEx-Im),internationalgoodpractices(e.g.IMFGuideonResourceRevenue Transparency),NewSchoolsResourceCursecourseliterature,andothersecondary literature, for the assessments. Additionally, the project also described the key stakeholders and decision makers of the IFIs examined. Duetoitsextent,thedeliverableforthefirstarmofthisresearchwasdividedintotwo reports,accordingtothetypeofIFI:a)DevelopmentFinanceInstitutions(DFI),andb) Export-CreditAgencies(ECA).Thisdocumentaddressestransparencyanddisclosure requirementsinDevelopmentFinanceInstitutions.Eachchapterdevelopstheabove-mentionedresearchobjectivestotheextentthatwaspossibleduetoinformation constraints2-,andpresentstheresultsinfourbroadsections:backgroundinformationof eachDFI,contractandpaymenttransparencyrequirements,acomparisonofthesesaid requirements with mandatory disclosure rules through stock market regulations, and policy recommendations.TheDFIsexaminedinthisdocumentarethefollowing:i)International FinanceCorporation,ii)MultilateralInvestmentGuaranteeAgency,iii)EuropeanBankfor ReconstructionandDevelopment,iv)Inter-AmericanDevelopmentBank,v)African DevelopmentBank,vi)AsianDevelopmentBank,vii)JapanBankforInternational Cooperation, and viii) Overseas Private Investment Corporation.

1 Except Chapter 6 - The United States Export-Import Bank of the report dedicated to Export-Import Credit Agencies, which was developed by project manager Manuel Valderrama Flrez, PhD Student at The New School University. 2 Since we are dealing with transparency requirements, not all IFIs have included these sort of reforms in to their policies. 6 List of Acronyms ADB: Asian Development Bank AfDB: African Development Bank ATI: Aid Transparency IndexBTC Pipeline: BakuTbilisiCeyhan pipeline China ExIm: The Export-Import Bank of China COFACE: The Compagnie Franaise d'Assurance pour le Commerce Extrieur COO: Country of OperationCSE: Civil Society Engagement UnitCSO: Civil Society Organization EA: Environmental AnalysesEU: European UnionEBRD: European Bank for Reconstruction and Development ECA: Export-Credit Agency ECG: Export Credits and Credit GuaranteesEI: Extractive IndustryEIA: Environmental Impact AssessmentsEITI: Extractive Industry Transparency Initiative ESHR: Environmental, Social and Human RightsESIA: Environment and Social Impact Assessment ESMR: Environmental and Social Management ReportsESS: Environmental and Social StrategiesEU: European Union Dodd-Frank: Dodd- Frank Wall Street Reform and Consumer Protection Act ICC: Inter-American Investment CorporationIDB: Inter-American Development Bank IFC: InternationalFinanceCorporation IFI: International Institution JBIC: The Japan Bank for International Cooperation KEXIM: Korea Export Import Bank LAC: Latin America and the CaribbeanMIGA: The Multilateral Investment Guarantee Agency OECD: Organization for Economic Cooperation and Development OPIC: Overseas Private Investment CorporationPCM: Project Complaint MechanismPIP: Public Information PolicyPSD: Project Summary DocumentPWYP: Publish What You Pay RWI: Revenue Watch Institute SCF: Structured and Corporate FinanceSDR: Special Drawing RightsSEA: Strategic Environmental AnalysesSEC: U.S.SecuritiesandExchangeCommission USEx-Im: United States Export Import Bank UKEF: United Kingdom Export Finance Department WBG: World Bank Group 7 1 International Finance Corporation3 The International Finance Corporation (IFC) is a legally and financially independent affiliate oftheWorldBankGroupwith184membercountries.TheIFCprovidesinvestment services, advisory services, and asset management with a vision to end extreme poverty and increase shared prosperity in every developing country. 1.1Extractive Sector Profile The International Financial Corporation (IFC) works with 30 companies in 23 countries on oil and gas projects and has a $2 billion oil and gas portfolio. It has 37 mining projects in 25 countries,witha$500millionminingportfolio.4DuringthefiscalyearendingJune30th 2013,theIFCinvested$389.34millioninoil&gas,andminingprojects(Flowvariable: spans across a period). 5

Table 1: Oil, gas and mining sector portfolio fiscal year 2013 1.2Transparency in the Extractive Sector According to the Access to Information Policy outlined by the IFC, transparency is essential tobuildingandmaintainingpublicdialogueandincreasingpublicawarenessaboutIFCs developmentroleandmission.Itisalsocriticalforenhancinggoodgovernance, accountability,anddevelopmenteffectiveness. ThroughtheIFCsSustainability Framework,thecorporationpromotestransparencyofrevenuepaymentsfromextractive industry projects to host governments. 1.3Requirements Regarding Contract, Revenue, and Payment Disclosure 1.3.1Revenue and payments IFCsPolicyonSocialandEnvironmentalSustainabilitystatesthatallIFC-financed extractiveindustryprojectsarerequiredtopubliclydisclosetheirmaterialproject paymentsmadetothehostgovernment(suchasroyalties,taxes,andprofitsharing).Such

3 This section was elaborated by The New Schools students Alix Schroder , Kaili Jackson , Zo Meroney , Rudy Shaffer