Tanzania

Minister of Minerals Doto Biteko has demonstrated active engagement in the EITIand appointed anew MSG Chair, Mr Ludovick Utouh, aformer Auditor General. Implementation has been somewhat slowed down by the lack of clarity on the process for recruiting an Executive Secretary and the lack of funding for the EITI process. Nonetheless, an acting Executive Secretary has provided interim leadership for the secretariat since May 2018.

The passage of the Tanzania Extractive Industries (Transparency and Accountability) Act in 2015 was an important milestone. However, since then, poor attendance by government representatives at multi-stakeholder (MSG) meetings, inability to appoint an MSG chair, the absence of an EITI Champion, and apparent lack of political support at the highest level—all corroborated by strong stakeholder views in the same direction—suggest weak government engagement in the EITI process.

The second Validation documented stakeholder concerns related to shrinking civic space. However, there was no indication that this had affected civil society engagement in the EITI, which remains full, active and effective.

The MSG and each constituency have made efforts to ensure an open and transparent process for nominating MSG members. There is evidence that the MSGs oversight of the EITI process has improved with the direction from the new EITI Chair and support from the national secretariat. The MSG is performing its required functions in practice, but its contribution to policymaking is limited.

The MSG has agreed and published a five-year work plan and operational work plans for implementation of the EITI. The work plans include objectives and activities that reflect national priorities for the sector and focus on improving regular and timely disclosures of information.

The legal framework and fiscal regime of extractive industries and the responsibilities of relevant government agencies are disclosed. Ongoing and proposed reforms are also described.

Technical and financial criteria for awarding and transferring mining licenses has been disclosed, as well as the recipients of mining licenses awarded and transferred in the period under review. Remaining gaps relate to clarifying whether licenses were awarded through a bidding process and whether there were non-trivial deviations from the legal framework.

The publicly available mining cadastre now includes license coordinates, but required information on licenses is not available for the oil and gas sector.

The policy and practice for contract transparency are clearly described in the 2016/2017 EITI Report.

TEITI has agreed appropriate definitions for the terms “beneficial owner” and “politically exposed person” and requested data from extractive companies making material payments.The MSG also agreed assurances that reporting companies were requested to provide.A study commissioned by TEITI in 2017 provides recommendations towards systematic disclosures of beneficial ownership information. However, follow-up on the study by relevant government agencies has been weak. The 2015 TEITA Act and its implementing regulations issued in 2019 provide a legal basis for disclosures. In 2016, the government committed to establishing a public register of beneficial owners in 2020, but progress has been limited to date. Information on legal owners of extractive companies is held by the government but is not publicly available.

Disclosures haveimproved regarding the financial relationship between the state and SOEs in the period under review. However, comprehensive information about the underlying rules governing the relationship is lacking.

The EITI Report contains an overview of the extractive sector, including exploration activities.

There is nopublicly available data on production values for the period under reviewand data on production volumes appears to be incomprehensive.

The publicly available information on mineral exports is more limited than during the first Validation. No export volumes were disclosed and data on export values is incomprehensive.

The low materiality threshold resulted in an excessively broadscope for the 2016/2017 reconciliation exercise. As a result, the comprehensiveness of the reconciliation did not reach the target set by the MSG and unresolved discrepancies raise concerns about data reliability.

EITI Requirement 4.2 on in-kind revenues is not applicable in Tanzania.

EITI Requirement 4.3 on barter and infrastructure transactions is not applicable to Tanzania.

The 2016/2017 EITI Report comprehensively discloses revenues collected by TPDC from the transportation of gas. These revenues and payments are reconciled. Transportation revenues only apply to natural gas. The volume of gas transported has not been explicitly disclosed but production volumes are disclosed by company, and all gas is consumed domestically and transported through TPDC’s pipelines. The process for determining the rate is publicly available.

Transfers between extractive SOEs and the government, as well as the SOEs and other extractive companies, appear to have been comprehensively disclosed. Due to its limited role in the extractive sector, NDC is not considered as a material SOE for the purposes of EITI reporting.

Direct subnational payments have been partly covered in EITI reporting, but disclosures do not provide a comprehensive, reliableand disaggregated overview of revenues collected by subnational government entities.

EITI data is disaggregated by company and revenue stream, with the exception of direct subnational payments to local authorities which are not disaggregated by receiving government entity.

The record across six EITI Reports shows efforts to ensure that EITI reporting is timely, with a delay only in the 2012/13 EITI Report.

Financial data in the2016/2017EITI Report is based on audited financial statements. However, the documentation of compliance with requested assurances and theIA’s assessment ofcomprehensiveness and reliability are lacking.

Tanzania has credibly demonstrated that all extractive revenues enter either the state budget or local government budgets. While the 2016/2017 EITI Report does not explicitly state that the Ministry of Minerals did notretain any revenues they collected in FY 2016/2017, the Secretariat’s assessment is that the description provided in the EITI Report and annual progress report and the existing legal and auditing assurances provide a sufficient overview of the distribution of extractive revenues..

Sub-national transfers do not appear to be part of the extractive sector revenue system in Tanzania. Rqeuirement 5.2 on sub-national transfers is therefore not applicable to Tanzania.

Apart from a general description of the budget and audit process, the EITI report does not contain information on the management of extractive sector revenue and related expenditures. Reporting on revenue management and expenditures is encouraged but not required by the EITI Standard and progress with this requirement will not have any implications for a country’s EITI status.

There are no mandatory social payments from the extractive sector in Tanzania. Requirement 6.1.a is therefore not applicable. The EITI Report disclosures voluntary social payments by extractive sector companies (or cash equivalent). Information on the beneficiaries of these social payments are not included.

As the MSG has not agreed and communicated to the SOEs a clear definition of quasi-fiscal expenditures (QFEs), the Secretariat is not able to confirm that extractive SOEs are not, for example, providing subsidies or undertaking infrastructure investments that could be considered as QFEs.

The 2016/2017 EITI Report and other publicly available sources such as the regular disclosures by the National Bureau of Statistics and the Bank of Tanzania provide all required data points. Efforts to address artisanal and small-scale mining are commendable.

The MSG has made efforts to ensure that government and company disclosures are comprehensible, actively promoted, publicly accessible and contribute to public debate.

EITI Reports are not yet machine readable, although key information is available online. Capacity-building activities have focused on enhancing the capacity of the secretariat staff and less that of civil society, citizens, media and others. Requirement 7.2 on data accessibility is encouraged but not required by the EITI Standard and progress with this requirement will not have any implications for a country’s EITI status.

The MSG has considered measures to follow up on findings and recommendations from EITI Reports, monitored implementation of proposed actions and documented the decisions and actions taken.

The Annual Progress Report 2015 was published within the deadline, and the report reflects Tanzania EITI’s main activities and progress made during 2015.