January 14, 2016
We, members of Civil Society Organizations (CSOs) in Zambia working on issues of extractive industries observed that on 8th – 9th December 2015 in Kiev, Ukraine, the Global Transparency Initiative which promotes good governance of natural resources, the extractive Industries Transparency Initiative (EITI), agreed to make beneficial ownership transparency an obligation on all 49 member countries. The EITI calls on mining companies to publish what they pay to government and governments to publish what they receive from government.
The addition of beneficial ownership as an obligation to EITI disclosure requirement will entail that citizens will be accorded a chance to know the true owners and beneficiaries of the natural resource extraction. This is a very significant step by the Global EITI initiative as previously issues of EITI reporting on beneficial ownership were piloted in 11 EITI countries including Zambia. This means that Zambia has been part of the learning process that has contributed to drawing key national level lessons on how beneficial ownership reporting at the country level could support greater transparency for the Extractives sector. It is the position of civil society that the great strides made in Zambia on EITI implementation be upheld and that Zambia embraces reporting on beneficial ownership in full in its EITI reporting.
This means our expectations are that all Zambia EITI reports will ensure that information about extractive companies’ beneficial owners is made wholly and unreservedly available to the general public for scrutiny. In addition, this will entail that the EITI reports for Zambia discloseall beneficial owners of respective extractives companies in their natural persons to ensure that the general public is well informed about all economic players in this economy who directly or indirectly ultimately own or control corporate entities.
We believe it is only right and just that the public knows all individuals who enjoy the economic benefits of their companies’ economic activities in Zambia through the holding of shares, voting rights or other means. Beneficial ownership disclosure will definitely support the fight against corruption in Zambia and help to track and stop illicit capital flight from our economy, therefore increasing the much needed revenue in our economy. The potential of the extractives industry to generate more revenue for this economy cannot be downplayed despite the current challenges being faced. Based on the 2014 report, we observe that revenues from the sector increased by 21%.
This means that if standards of transparency are improved even further, more revenue can be generated from the sector and made available for increased social spending to health,education, social protection and agriculture. We Civil Society Organizations in Zambia working on issues of extractive industries, further wish to remind Government that in November 2015, CSOs jointly embarked on the launch of the “Stop the Bleeding Campaign” in Zambia aimed at curbing illicit financial flows from Africa as a whole but also more specifically from Zambia in particular owing to the huge financial leakages that our economy is facing. We advise Government to use the EITI as an available tool to address the problem of illicit financial flows by adopting and fully implementing the new EITI principle on beneficial ownership. We further implore Government to ensure that fighting financial leakages through tax dodging practices by Multi National Cooperation (MNCs) is placed top on government’s policy agenda as more resources are needed to fight poverty and grow this economy.
Lastly, we call upon the Zambian Government to continue supporting the efforts by the Zambia EITI council in developing the Zambia EITI law. We are confident that the law will include a section on beneficial ownership to address the issues raised above.
Centre for Trade Policy and Development (CTPD)
This statement is endorsed by:
1) Civil Society Organisations Extractive Industries Transparency Initiative (CSO-EITI)
2) Council of Churches in Zambia (CCZ)
3) Extractive Industries Transparency Alliance (EITA)
4) Copperbelt Trade and Development Forum
5) Zambia Land Alliance (ZLA)
6) Publish What You Pay (PWYP)
7) Caritas Zambia
9) Democratic Governance and Human Rights Activists (DEGHA)
10) Southern Africa Resource Watch (SARW)
11) Zambia Council for Social Development (ZCSD)