Extractives industry: How does disclosure in SA compare?
The Extractive Industries Transparency Initiative (EITI) is an international organisation with country members. Its objective is to promote understanding of natural resource management, strengthen public and corporate governance and accountability, and provide the data to inform policymaking and multi-stakeholder dialogue in the extractive sector.
Genesis mapped current policy and practice of disclosures in the extractives industry in South Africa against the EITI standard. We also provided an assessment of the areas of overlap between the two. This included identifying priority gaps and opportunities for value-addition in South Africa’s case that could come with EITI implementation.
The mapping exercise revealed significant pre-existing alignment of the South African disclosure environment with the EITI requirements. However, onward public disclosure of extractives industry information by government entities sometimes does not take place.
Genesis determined that a more complete disclosure environment in South Africa would have the following tangible benefits:
- Timely, accessible and disaggregated data on production, exports, and socioeconomic and environmental impact is essential for informing fact-based public debate and good policy formation.
- Detailed socioeconomic benefit reporting for the extractives industry is beneficial for building trust between business and society. This in turn strengthens the social licence to operate.
- Accessible, detailed information about South Africa’s mineral, petroleum and gas resources provides potential investors with critical information on which to base their investment decisions. An example of this would be the online extractives cadastral system.
- Providing the public with access to more detailed information about the process and terms of licence/rights awards, and the flow of subsequent benefits, increases the accountability of governing institutions and provides the transparency that local communities seek.
- Greater transparency around the beneficial ownership of entities involved in the extractives industry reduces the opportunity for corruption and other financial crimes.