Why contracts need to be open – towards a fairer deal for Niger’s citizens

Written by Alice Powell of Publish What You Pay.

A couple of weeks ago, thousands of Nigerien citizens took to the streets in Arlit to protest against nuclear giant AREVA. According to one of the organisers, “The aim of the protest… is to support the government in its upcoming discussions with Areva on the subject of our uranium”. Protestors were also voicing their discontent at how the mining of uranium has affected their daily lives, without yielding many benefits.

Indeed, Niger’s citizens have seen little good come out of almost half a century of uranium extraction. While seven out of ten homes in France are lit up thanks to nuclear energy, mainly fuelled by Niger’s uranium, many Nigeriens go without electricity. Despite being one of the world’s top producers of the mineral, Niger lies at the bottom of the development index.

The extractive process in Niger has been mired in secrecy from the off. As its empire crumbled France wrangled lucrative resource deals with soon-to-be former colonies, ensuring themselves a steady and heavily discounted supply of resources.

Niger was no exception to this and the advantageous monopoly given to the French company AREVA has cost Nigeriens citizens dearly over the years. Les Afriques estimates that, in selling uranium far below the global market price, Niger lost out on a potential $20 billion over half a century.

The secrecy surrounding uranium contracts ensured that Nigeriens could not calculate whether they were getting a fair deal for their resources. The deals were classed as part of defence agreements, making it even more difficult, and dangerous, for citizens to seek information. While contract terms have been renegotiated since Niger’s independence, the deal remains imbalanced and largely shrouded in secrecy.

In order for a deal to truly benefit all citizens rather than the few in power, the terms must be public. Moreover the bidding process must be open, so that civil society can ensure the best company was chosen for the right reasons.

When it comes to extractive transparency and a fairer deal for its uranium, the tide may be turning for Niger. A change of government in 2010 brought with it a new constitution, which enshrined the principle that natural resources belong to the citizens and must be governed transparently. Article 150 stated that all extractive contracts must be made public.

On a number of occasions since 2010, the government has publicly announced its intention to renegotiate its contract with AREVA and rebalance the relationship between government and company, so that Niger can profit more from its key natural resource.

Most recently, the government last September announced an audit of all mines operated by AREVA. The aim is to reduce costs and increase the profits of the mines. The audit will serve as a basis for its next renegotiation with AREVA, which is due this month when the current contract lapses. It was in support of this move that Arlit’s residents came out to demonstrate.

Uranium is no small opportunity for Niger. The opening of the Imouraren mine in 2015, also operated by AREVA, will propel Niger up the ranks of uranium producers to become the second largest in the world.

While these developments are promising, the principles of transparency and openness must be fully integrated in the future management of Niger’s natural resources if uranium is to improve the lives of Niger’s citizens.

PWYP Niger has voiced concerns over the much lauded audit, particularly as few details have been revealed. Who will be conducting this audit? When is their deadline for submission? Will it be done on time to affect the government’s renegotiation with AREVA? PWYP Niger continues also to call for the publication of contracts, as the celebrated article 150 of the constitution has yet to be realised.

The October renegotiation, if conducted in an open manner, could mark the turning point in Niger’s natural resource management, ensuring that its resources benefit future generations to come.

To find out more about PWYP’s work in Niger, visit http://www.publishwhatyoupay.org/where/coalitions/Niger

Campaigners challenge Cameron to keep promise to tackle company secrecy

Press statement by Christian Aid, Global Witness, Financial Transparency Coalition, OpenCorporates, Open Knowledge Foundation, Tax Justice Network and Tax Research LLP.

Released: Thursday 24 October

The UK government must use the Open Government Partnership summit in London next week to end the secrecy surrounding who really owns millions of UK companies campaigners said today. Discussions are underway right now at the highest levels of government and campaigners are expecting a decision to be made by the end of this week.

At the G8 summit earlier this year, David Cameron promised “to push for more transparency on who owns companies”. Failure to do so would be a massive missed opportunity to stop tax evasion, money laundering and other forms of crime and corruption, and would seriously undermine UK government claims to lead the world on government openness and accountability, according to a coalition of non-governmental organisations including the Tax Justice Network and the Financial Transparency Coalition.

Laura James, CEO of the Open Knowledge Foundation, said: “Increasing transparency around company ownership was a key commitment at the UK G8 and is part of the legacy on which this government will be judged. Cameron got a lot of credit for leading on this issue, which could make a massive difference in the fight against corruption and financial crime. Not announcing plans this week to mandate public registries of who really owns companies in the UK would be a missed opportunity and a failure of leadership.”

Campaigners warned that a private registry of ultimate or ‘beneficial’ company ownership that was only accessible to tax authorities and law enforcement agencies would incur the same costs as a public registry, but would bring none of the benefits. They argue that without broader scrutiny from the media, civil society, businesses and the public, errant companies would have much less incentive to change their behaviour.

Many companies have expressed their support for establishing a public registry – including over 20,000 business owners who signed an open letter organised by Avaaz earlier this year – as well as others via organisations such as the European Banking Federation and the Institute of Directors.

Chris Taggart, Co-Founder & CEO, OpenCorporates said: “This isn’t just about tackling crime and corruption, it’s also about good business. Companies need to know who they are dealing with for markets to function effectively. In a globalised world, with transnational corporations increasingly dominant, ownership transparency is also critical for democracy. Only those with something to hide should oppose this reform.”

Joseph Stead, Senior Adviser on Economic Justice at Christian Aid said: “Phantom firms registered in developed countries, like the UK and its overseas territories, facilitate huge outflows of illicit money from developing countries.  Ending the secrecy will help stop the outflows and ensure developing countries have the resources to provide for essential public services such as health and education.”

Robert Palmer, Banks and Corruption Campaign Leader at Global Witness said: “Global Witness’ investigations have shown repeatedly how anonymous shell companies are the getaway cars for crime and corruption. A public register of who owns and controls companies would make it much harder for the British financial system to be abused in this way.”

Richard Murphy of Tax Research UK said: “This issue is vital to tax justice and to closing the tax gap in the UK. Over 300,000 companies quite literally disappear from official records each year because our tax and company authorities do not know how to contact them. Knowing who the real owners of these companies are will help ensure all businesses pay the tax they owe – which will benefit everyone.”

PRESS RELEASE: Campaigners highlight transparency with week of global events

A series of high-profile events to highlight the importance of transparency for development, innovation, equitable growth, and poverty reduction has begun. The first ever Global Transparency Week (October 24 – November 1) is taking place at a time when public interest in government and corporate transparency has never been higher.

Hosted by twenty-two organisations, the week will demonstrate how global the movement for transparency has become: with organisations from Washington, Kabul, Geneva, Ottawa and London participating.

Global Transparency Week will start with the launch of the Aid Transparency Index in Washington on October 24, and finish with the Open Government Partnership summit in London from October 31 to November 1.

David Hall-Matthews, Managing Director at Publish What You Fund said: “Global Transparency Week brings together campaigners from all over the world to unite and compare efforts to drive openness, accountability and transparency for social good. With the community of transparency campaigners growing every year, we hope this is just the beginning.”

Robin Hodess, Director of Advocacy and Research at Transparency International said: “Global Transparency Week demonstrates the strong commitment worldwide to make openness a universal principle. When governments and companies are transparent, they can fight corruption more effectively which in turn benefits more people and provides a development dividend.”

Among the events taking part during Global Transparency Week is a virtual session on mapping global aid. In ‘Towards a Global Open Aid Map’, organized by the World Bank’s Open Aid Partnership and Publish What You Fund, speakers from Washington D.C., Nairobi, Lilongwe, La Paz, and Kathmandu will explore the power of open data to inform development decisions and improve results.

On Monday October 28, The North-South Institute will discuss the importance of open data for development in Ottawa, while GAVI Alliance will examine transparency in development funding in Geneva and Thomson Reuters will debate whether open data has failed to live up to its hype. On Tuesday, Aid Data will launch AidData 3.0 portal at Brookings Institution, Washington D.C. On Wednesday October 30 in London, Clare Short will introduce a series of short films made by Publish What You Pay about the extractives industry.

For full events listing, see http://www.globaltransparencyweek.org.

Ends /

Contacts: Katie Finnegan-Clarke on 07514 751543, katie@publishwhatyoufund.org or Nicole Valentinuzzi on 020 3176 2512, nicole.valentinuzzi@publishwhatyoufund.org.

Notes to the editor:
Participating organsiations: Aid Data, BOND, Development Initiatives, Engineers Without Borders, Gavi Alliance, HEC Paris, Integrity Action, Intergrity Watch Afghanistan, mysociety, ODI, ONE, Open Aid Institute, Open Aid Partnership (World Bank), Open Knowledge Foundation, Open Government Partnership, Publish What You Fund, Publish What You Pay, Sunlight Foundation, Technology Salon, The North-South Institute, Thomson Reuters Foundation, Transparency International.

For more information visit www.globaltransparencyweek.org

The full list of events is available online at http://globaltransparencyweek.org/events/
Interviews available with participating organisations. Contact the numbers above.

Information Sharing for Impact

By Jeff Raikes. Originally posted on the Bill & Melinda Gates Foundation blog on October 14, 2013.

The Gates Foundation is joining the International Aid Transparency Initiative (IATI), which is working to make information about spending on development easier to access, understand, and use. As one of the first private foundations to become a member, we will join a growing alliance that includes the countries that spend money on foreign aid and many United Nations and other multinational organizations. One of the ongoing challenges that philanthropic foundations and government aid agencies face is how to share information with the public and other people committed to the same humanitarian goals. Over the last few years, we have worked with other foundations, development agencies, and multilateral organizations to figure out how to streamline and share information in a more consistent way.

The Gates Foundation is joining the International Aid Transparency Initiative (IATI), which is working to make information about spending on development easier to access, understand, and use. As one of the first private foundations to become a member, we will join a growing alliance that includes the countries that spend money on foreign aid and many United Nations and other multinational organizations. Although there are some differences in how members of IATI approach information sharing, we are excited to be part of this collaborative effort to increase the transparency of development aid.

Our commitment to IATI is one of a number of steps we are taking to make information about the foundation more available. For example, we now share information about our international grants with the Organisation for Economic Co-operation and Development, another international organization focused on standardizing data and making it more accessible. We also make data about our grants available on our website and publish it to the Foundation Center, a well-regarded resource of information about philanthropic organizations. You can read more about our information sharing approach here.

By the end of 2013, we will publish an implementation schedule for sharing our data with IATI. In the meantime, we are continuing to work with partners in the development and philanthropic communities to understand better how this kind of data can be made more useful.

To figure out our approach to sharing information, we have taken lessons from what governments and other non-profits are doing well, while considering the unique aspects of operating a foundation. At the end of the day, our goal is the same: to identify common ways we all can share information that will help the development community achieve greater impact.

Boots’ £1 billion pound tax dodge shows we need open data on who really owns companies

Originally posted on Open Knowledge Foundation blog.

Yesterday a group of campaign organisations revealed that Alliance Boots – the British pharmaceutical giant which operates the high street chemists ‘Boots’, and one of the UK’s biggest private companies – avoided over £1.1 billion in tax payments over the past 6 years.

Tax avoidance schemes are estimated to cost the UK up to £120 billion every year – a considerable amount when you consider that the total 2012 budget for the UK was £682 billion.

As the report says:

If Alliance Boots had not deducted its finance costs, the Treasury would be richer by an estimated £1.12 billion to £1.28 billion. Even taking the lower end of that range, those tax payments could have funded more than two and a half years of total prescription fees for all of England. It is also equivalent to the starting salary of more than 78,000 NHS nurses for a year – roughly 120 additional nurses per parliamentary constituency, and more than the total number of nurses estimated to be cut from the NHS between 2010 and 2015 [...]

In their concluding recommendations, the report’s authors highlight the importance of greater transparency around company ownership and public contracting, which could both help to discourage the kind of aggressive tax avoidance practised by Alliance Boots.

They write:

The Government should introduce a rigorous public system of documentation and disclosure of beneficial ownership in the UK and require regulatory reform of the Overseas Territories – such as Gibraltar and the Cayman Islands. [...] Ensuring that a rigorous public register is introduced is vital in order to be able to assess the true beneficiaries of the kinds of related party financial transactions used by Alliance Boots.

We heartily concur with this conclusion. As we’ve said before, we think that registries of who really owns companies around the world should be published as open data.

The UK government has a major opportunity to take leadership in this area by making its own registry of beneficial ownership publicly available, and by encouraging other countries to do the same through various international fora, such as the G8, the G20, the OECD and the Open Government Partnership.

We’ll be covering developments in this area (or absence thereof!) at the Open Government Partnership Summit in London in a couple of weeks, so watch this space.

Detail from the “Alliance Boots and the Tax Gap” report released yesterday.

VIDEO: ‘Why information matters for the Post-2015 framework’

A short powerful video demonstrating the potential of power of transparency.

Judith Randel, Executive Director, Development Initiatives: “One of the things that have happened over the past few years, which is a good reason for optimism, is the development of the open government movement and the open data movement. This means data is becoming available, but it’s no good unless the people who need that data can access it and use it. Access to information gives people power, it gives people choice and control over their lives.”

A Development Initiatives film.

Hacking Into Canada’s Aid Data

By CARLOS SANTAMARIA for The North-South Institute.

A computer room. Canada’s first-ever foreign aid “hackathon” brought together a team of IT professionals to work on applications to better analyze the country’s aid data and improve its efficiency and effectiveness.

Canada agreed two years to publish its aid data, but most development professionals lack the technological expertise to sift through the pile of information.

That’s why a team of computer programmers, software developers and international development experts met last weekend in Ottawa to work on applications to better analyze the data and thus improve the efficiency and effectiveness of Canadian foreign aid.

Devex spoke to Ian Froude, the organizer of Canada’s first-ever foreign aid “hackathon,” who hopes the event will help to bridge the gap between IT and international development expertise. He mentioned that more investment is needed so in the future development professionals won’t be intimidates by the sheer amount of information available and better understand what this tool can do for policy, programming and field work.

Here are a few excerpts of our conversation with Froude:

How did the idea of using hackers to analyze Canadian data come about? How was the event organized?

I worked for Engineers Without Borders Canada for three years prior to organizing this hackathon. [We were] was focused on campaigning to have Canada sign onto the International Aid Transparency Initiative. Our campaign was successful, when during meetings in Busan in November 2011 then Canadian international development minister Bev Oda, announced that Canada would [join] IATI … and [since then] the Canadian International Development Agency — now [part of] the Department of Foreign Affairs, Trade and Development — has worked to publish data according to its IATI implementation plan.

I decided to organize the hackathon for a number of reasons. The first is that Canada needed more engagement with its data. … [More] energy and expertise needs to be spent on international development by citizens and civil society. My goal was to organize a hackathon that would be an injection of energy and enthusiasm into the sector, and that this would lead to more work being done

The second goal of the event was to create a space where citizens, leaders from civil society, and members of the federal government could work together and discuss international development. [I wanted] to contribute to the breaking of barriers between these groups by showing that there are interesting, smart and passionate people working in each of these groups.

You are not development experts but computer technology specialists. Doesn’t that mean you lack full criteria to go over the data?

We addressed this in several ways: By having the hackathon projects submitted by members of the international development sector with years of experience in Canada on policy and programming and abroad in the field; by having those projects screened and reviewed by others engaged in the sector with both field, policy, and programming experience; and lastly, in our hackathon participant recruitment efforts. The participants of the hackathon were split in three rough categories: 18 participants came solely with a technology background, 12 had a mixture of international development and technological background, and the remaining 8 participants had policy, programming and field experience in international development. We felt that this split of experience and expertise made for effective teams, ensuring that each team had diversity of expertise.

To also try to bridge the gap between technological expertise and international development expertise with three speakers giving an overview on why open data is important for international development and how it could be useful, sharing lessons learned from their research on the [positive and negative] impacts of data use in international development, discussing IATI standards and rationale, and analyzing Canada’s aid programs and investments.

What are your main takeaways so far from the data you’ve gone over?

  • There is a ton of energy and talent in Canada, and I assume elsewhere, that can convert the masses of data into knowledge and insight that can potentially be used to increase the effectiveness of international development.
  • International development policy, programming and field experience is a valuable addition to teams and a hackathon as a whole. This allowed us to ensure that any tools were built for the context that they would be used within.
  • Investment is needed to grow the open data in the international development community so that data publishing and analysis continues and that the value actually comes to fruition. Many international development professionals are intimidated by data and all the new terminology that comes with it, there needs to be investment to reduce this intimidation.

Are you planning to send the results of your analysis to the Canadian aid authorities? Have you been in contact with them at all

Yes, we will be sending the results of the projects and the event as a whole, as well as feedback to DFATD on the usability, quality, and quantity of the data that has been released. Participants were asked to provide feedback during and after the event, and I will be compiling this feedback and sharing it with DFATD. I have been in contact with a number of people at the DFATD, and they have expressed interest in the event and its outcomes. We will also be sharing the results with the government other organizations in Canada’s international development sector.

How can hackers help to track aid data? What specific areas of expertise can you offer in this sense?

IT technicians, software developers and hackers can provide value in creating programs and tools that save time, [for instance through] automation of analysis, translate data into useful insight, and translate piles of individual pieces of data into formats that people who don’t have technological expertise can learn from.

More and more aid agencies and NGOs are publishing their data online as part of a worldwide transparency initiative to show how they are spending the money from donors. Do you think all the data is really there? How can you know?

There is a lot of data out there, but I don’t think it is anywhere near what is yet to be published or released. It requires time, energy, political will, bureaucratic will, and the development of new and different internal processes and cultures to get us to a point where we will have comprehensive and timely data on aid programs. We are on a path to that but a [lot] more effort is needed.

Where does aid money really go — and what is it spent on?

By Charles Lwanga Ntale for Development Initiatives.
Originally posted on CNN.

People in Jonglei state, South Sudan, unload aid from the U.N. World Food Program in January 2012.
People in Jonglei state, South Sudan, unload aid from the U.N. World Food Program in January 2012.

STORY HIGHLIGHTS
  • Impact of international aid is hard to measure, says Charles Lwanga Ntale
  • large amounts of aid money never actually leave rich countries, he adds
  • But extreme poverty cannot be ended without international aid

What is the value and impact of international aid? In an era of global austerity, this is a question that is frequently posed by policymakers and the citizens they represent.

The truth is, it is actually quite hard to measure. But there are important questions about both the quantity and quality of aid that must be answered.

Charles Lwanga Ntale, director for Africa for Development Initiatives

Contrary to popular perception, aid is not one homogenous entity or a single transfer of money from donor to recipient countries. The term “international aid” actually covers a wide variety of things, including food and commodities, advice and training, and debt relief.

In 2011 — the last year we have comprehensive data for — total development aid from rich countries stood at nearly $150 billion, according to the Investments to End Poverty report. Only $59 billion identifiably involves the transfer of actual cash to, for example, recipient governments, NGOs operating on the ground or special project funds.

Aid in kind makes up another $25 billion. Most of this is food aid, which is used to tackle acute hunger — but even this form of aid is not without controversy. Many donors avoid shipping actual food to developing countries, aware that it destroys local markets and harms local farmers.

Research demonstrates that food aid can be poor value for money, especially when food grown in donor countries is shipped to the developing world. Sorghum shipped from the United States is 200% more expensive than it is in Chad and almost 100% more than in Sudan, according to Development Initiatives calculations. Despite this, the United States and Japan continue to make extensive use of food shipments.

As much as $22 billion — or 20% of bilateral aid spending — is spent on activities in donor countries or put towards the cancellation of debt. This includes funds to cover housing, food and other services for the first 12 months of refugees’ stay in the donor country. It also includes public spending on universities to cover the costs for students from developing countries. In 2011, $4.5 billion was spent on refugee costs, $3.5 billion on university costs and around $7.5 billion on debt relief.

As important as these expenditures may be, they do not result in any transfer of resources to developing nations. These schemes may of course be beneficial to recipient countries in the long term — for example, contributing to capacity development if students return to their countries. But it is undeniable that these schemes are at odds with the common perception of aid as financial support transferred from donor to recipient countries to fight poverty.

These different elements of aid obviously have very different effects on economic development and growth. A dollar of cash will have a very different impact to a dollar’s worth of food or a dollar’s worth of a consultant’s time. It is difficult to understand just how bundling all of these items into one lump sum can allow us to draw meaningful and reliable conclusions about the value of aid.

This lack of clarity was part of the motivation for Investments to End Poverty — a major new report that analyzes aid in all of its complexity. At Development Initiatives we reviewed each individual record of foreign aid from OECD donors over the period 2006-2011 — over a million rows of data. Now, for the first time ever, we can see just how much aid flows between specific countries and, crucially, what that aid consists of.

The results are striking. For example, according to our calculations, Italy and Denmark both gave very similar levels of bilateral aid, just above $2 billion, in 2011. But almost 70% of Italy’s aid stayed in the country, spent on refugee costs and debt relief, whereas around 70% of Denmark’s aid resulted in a transfer of resources to developing countries.

On the recipient side, some countries that appear to receive considerable funds in fact receive a lot less than advertised. Our research found that of the $7.5 billion in aid reported as given to the Democratic Republic of Congo in 2011, more than $5 billion was not transferred to that country, and consisted instead of debt relief.

All of this matters because we are at a crossroads in international development. In the last few decades, we have seen unprecedented progress in alleviating poverty, as recognised by world leaders meeting at the United Nations General Assembly in New York in September. There is a growing consensus that we can end extreme poverty by 2030.

The truth is that we cannot meet this goal without international aid. While FDI and remittances undoubtedly contribute to economic growth in developing countries, aid is the only international resource flow which can be targeted explicitly to improve the lives of the poorest people around the world.

In sub-Saharan Africa alone, 400 million people live in extreme poverty and require interventions that are targeted and complementary to existing support to lift them out of it. Without the support of international aid, most poor people will be left behind.

If we want to maximize the impact and reach of international aid, we need to ensure that every dollar is spent as efficiently as possible. We can only do this with better information and a clear understanding. Then policymakers in both donor and recipient countries can make better and more informed decisions, and civil society can better monitor progress and hold them to account.


A Data Revolution for Poverty Eradication

The High Level Panel on the Post–2015 Development Agenda called for a data revolution for sustainable development, with a new international initiative to improve the quality of statistics and information available to citizens.

The Panel recommended actively taking advantage of new technology, crowd sourcing, and improved connectivity to empower people with information on the progress towards the targets.

Development Initiatives believes there a number of steps that should be put in place in order to deliver the ambition set out by the Panel. They are as follows:

Step 1: Sell the vision and develop political commitment

Step 2: Lots of data already exists. We should improve it.

Step 3: Joined up data will lead to usable information

Step 4: Realise the potential of new sources of data and new approaches

Step 5: Build the capacity to create and use data

Our briefing explores these points in more depth.

- Andrew Palmer, September 25, 2013