Watching
the energy dollar
By Julie
McCarthy
Trinidad Guardian
Port
Spain
Petroleumworldtt.com
10 08 06
Why
do resource-rich developing countries actually fare
worse than those that don’t have resources?
According
to the Revenue Watch Institute, the problem lies
in the fact that those countries are not transparent
about energy sector earnings.
Revenue
Watch, an international non-governmental organisation,
began in 2002 to foster transparency in the sector,
both on the part of governments and private companies.
Deputy
director Julie McCarthy was in T&T last week
to speak to a number of people, including the Government
and private sector representatives, about the local
energy sector and government reporting.
Assistant
Business Editor Luis Araujo sat down with Julie
McCarthy last week.
Luis:
About Revenue Watch...
We
were launched in 2002 in response to the phenomenon
known as the “resource curse” where
researchers were beginning to show that countries
rich in natural resources actually performed worse
in terms of corruption, in terms of authoritarian
governance, in terms of human development indicators,
in terms of foreign investment, in terms of conflict
than developing countries that didn’t have
any resources at all. So the goal was to try to
promote more transparent, accountable and prudent
management of natural resources to increase the
likelihood that these countries could actually benefit
from their resource windfalls and avoid some of
the pitfalls that Angola, Democratic Republic of
Congo had suffered from so drastically.
(Iraq)
has a lot to do with developed companies in developing
countries and how they operate?
At
the time all companies had pulled out. It was a
very sexy issue, obviously. The US government was
managing Iraq’s revenues and was dealing with
companies like Haliburton, KPR and doing a lot of
contracting very quickly and without a lot of oversight
or transparency mech in place. Absolutely no accountability
at the time and a lot of inefficient decisions were
made that now are sort of coming to light.
Mexico
has a strong state company as well. How does Mexico
compare to other countries that you look at but
also to more developed countries?
It’s
often more difficult in countries where the state
is the dominant actor to find out information about
how the sector is being managed because a lot of
big, international companies like Exxon or Chevron
are now part of initiatives like the Extractive
Industries Transparency Institute which sort of
recognises a growing international norm that you
make payment information available for you countries
of operation so those countries so that citizens
know how much money you contribute.
With
national oil companies it’s been a slower
momentum that this is actually, in fact, best practice
and it’s an issue that’s increasingly
relevant now that you have Chinese and Indian national
companies increasingly investing abroad, especially
in African countries where it can be difficult to
find out information about how much they’re
actually contribute to governments. It’s a
challenge to this growing international norm for
the international oil companies that want basically
everybody to participate so that they’re not
at a disadvantage for providing this information.
In
terms of Mexico’s transparency, I would say
it’s comparable to, let’s say, Trinidad
in the sense that there is information there about
revenues generated and are budget reports produced.
I would say that there is a bit more vibrant civil
society analysis and commentary on the energy sector
there.
Here,
you can get a report of production from the ministry
and can also track it back to oil and gas prices.
But
they don’t release the prices here.
They’re
pretty open about oil prices.
But
not for gas. That’s interesting. Maybe you’re
not getting the best price for gas.Revenue Watch,
does it look at countries or the companies that
operate in them?
We
do a lot of advocacy with companies at the international
level to encourage them and try and create effective
arguments and motivation to get them to report at
the country level on how much they’re actually
contributing. We also partner with them in certain
instances...
So
we do try to partner with companies with the goal
of enhancing the flow of information and also enhancing
their interaction with the general public and with
civil society because there’s often a lot
of mistrust or a disconnect where the private sector,
government, the public represented by civil society
are often segmented and even sometimes radicalised
against each other so we try to build capacity of
civil society to be more competent, well informed
commentators and relevant critics of government
policy.
Trinidad
Guardian
Thursday 5th October 2006
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©2006 Trinidad Guardian. All Rights Reserved.
