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Dominican Republic has made meaningful progress overall in implementing the 2016 EITI Standard.

Outcome of the Validation of the Dominican Republic.

Decision reference
2020-09 / BM-46
Decision basis
EITI Articles of Association 2019-2021, Article 12.1. ix)

Board decision

The Board came to the following decision:

The Board agrees that the Dominican Republic has made meaningful progress in implementing the 2016 EITI Standard.

EITI implementation in the Dominican Republic has improved the availability of information and strengthened dialogue between stakeholders. The EITI online portal provides information in an accessible and comprehensible format. Full contract transparency and the availability of, for example, production and export data in open format enables informed debate about the extractive sector. The Dominican Republic is encouraged to consider routine disclosures of revenue and payment data through government and company systems.

The Board recognises that the multi-stakeholder group has become an important platform for discussions about sharing benefits between the central government and the local level. However, EITI implementation in the Dominican Republic has had limited impact on public debate and policies. The Board encourages the MSG to agree policy-relevant recommendations for strengthening extractive sector governance and to undertake further outreach activities to ensure that EITI contributes to public debate. The Board takes note of some stakeholders’ concerns over the effectiveness and impact of EITI implementation to date and encourages the Dominican Republic to consolidate recent improvements in EITI disclosures and reporting, in particular addressing concerns regarding data quality.

The Government of the Dominican Republic is urged to ensure that there are no legal, regulatory or practical constraints for civil society to fully, actively and effectively engage in all aspects of EITI implementation and debate about natural resource governance. The Board will review adherence to this provision in the second Validation. Considering the significant economic and social impact of the Pueblo Viejo gold mine, the government and industry are encouraged to ensure that citizens have adequate access to information related to the project and other developments in the sector. Stakeholders are reminded that any member has the right to table an issue for discussion at the MSG. The MSG is encouraged to review reforms related to the formula for subnational revenue sharing and ensure that EITI reports provide information that enhances public understanding about the topic. The MSG may also wish to consider additional disclosures related to environmental monitoring and revenue management.

The Board has determined that the Dominican Republic will have 6 months, i.e. until 14 August 2020 before a second Validation to carry out corrective actions regarding the requirements relating to production data (3.2), subnational transfers (5.2) and the outcomes and impact of EITI implementation (7.4). In taking this decision the Board did not take into account developments related to these requirements that took place after the commencement of Validation as the proposal to consider developments and information disclosed after the commencement of Validation did not have the full support of the MSG.

The Board’s decision followed a Validation that commenced on 1 January 2019. In accordance with the 2016 EITI Standard, an initial assessment was undertaken by the International Secretariat. The findings were reviewed by an Independent Validator, who submitted a draft Validation report to the MSG for comment. The MSG’s comments on the report were taken into consideration by the independent Validator in finalising the Validation report and the independent Validator responded to the MSG’s comments. The final decision was taken by the EITI Board.

Corrective actions and strategic recommendations

The EITI Board agreed the following corrective actions to be undertaken by the Dominican Republic. Progress in addressing these corrective actions will be assessing in a second Validation commencing on 14 August 2020.

  1. In accordance with Requirement 3.2, the Dominican Republic should publish the value of production of non-metallic minerals by commodity. In order to improve the reliability of production data, the government is encouraged to ensure that the accuracy of volumes reported by companies is sufficiently monitored.

  2. In accordance with Requirement 5.2, the Dominican Republic is required to assess and disclose any discrepancies between the formulas and actual amounts transferred (1) from the central government to FOMISAR and (2) from FOMISAR to municipalities. The MSG is encouraged to document and disclose disagreements related to the interpretation of the concept of ‘net benefit’ in the Pueblo Viejo contract.

  3. In accordance with Requirement 7.4, Dominican Republic is expected to assess the impact and outcomes of EITI in Dominican Republic and identify opportunities for strengthening the impact of EITI implementation on natural resource governance.

The government and the MSG are encouraged to consider the recommendations in the Validation Report and the International’s initial assessment that could help the Dominican Republic make ever greater use of the EITI as instrument to support reforms, and to document the MSG’s responses to these recommendations in the next annual review of progress.

Background

The Dominican Republic joined the EITI in February 2016. Validation commenced on 1 January 2019. In accordance with the Validation procedures, an initial assessment [English | Spanish] was prepared by the International Secretariat. The draft Validation report [English | Spanish | French] was submitted to the MSG for comments on 23 May 2019. MSG comments [Spanish] [English] were received on 31 May. The Independent Validator reviewed the comments and responded to the MSG, before finalising the Validation report [English] [Spanish] [French]. In May 2019, the MSG published information that addresses the corrective actions related to Requirements 3.2, 5.2 and 7.4 identified in the Validation report.

The civil society members of the MSG submitted letters to the Validation Committee on 13 June [English] and 5 August [Spanish] [English], contesting the assessment of individual requirements and the overall assessment. The letters argued that civil society representatives had not been aware that the new information published in May would affect the outcome of Validation and that the MSG had not comprehensively discussed the draft Validation report.

On 18 September, the Validation Committee agreed to re-open the period for MSG comments. The MSG submitted its comments [Spanish] [English] on 9 October, with attachments documenting the MSG’s discussions and decision [Spanish |  Spanish]. The feedback notes that the government and industry agree with the findings of the Validation report.

The comments specify areas on which the MSG agreed and the views of individual constituencies. Across several requirements, civil society considers progress to have been below ‘satisfactory’. Other constituencies do not consider civil society’s concerns to be directly related to required aspects of the EITI Standard. For most requirements discussed, the MSG has agreed further actions to be taken to address the strategic recommendations arising from Validation. The International Secretariat does not consider there to be grounds to downgrade the assessment of any of the requirements.

The government and industry confirmed their support to the information relating to Requirements 3.2, 5.2 and 7.4 that was disclosed in May, subsequent to the commencement of Validation. The information addressed directly the three corrective actions identified in the draft Validation report. Civil society does not consider the disclosures related to Requirements 3.2 and 5.2 to be sufficient. The International Secretariat’s assessment is that the disclosures fulfil the provisions of the 2016 EITI Standard. The Validation Committee should consider whether to assess progress in meeting Requirements 3.2, 5.2 and 7.4 as ‘satisfactory’.

The letters submitted to the Validation Committee by the civil society members of the MSG in June and August include claims about restrictions to civic space. The MSG feedback does not comment on Requirement 1.3. The Secretariat’s assessment is that there is no evidence of breaches of the civil society protocol, and the assessment of Requirement 1.3 remains ‘satisfactory progress’. 

To inform the assessment of Requirement 1.3, the Secretariat conducted a desk review and consulted stakeholders in accordance with the Validation procedure. A two-member team from the Secretariat consulted all civil society MSG members in group and bilaterally. Additionally, the team consulted with members from the Cotuí community, which is in the vicinity of the Pueblo Viejo mine. The community members expressed concerns about the impact of the mine on their livelihoods. A campaign demanded that the population surrounding the mine be relocated. Community members noted that the police intervened in their protests against the mining operations and that their perception was that the police sided with the mining company.

Consultations did not indicate that the protests had any link with the EITI, apart from some members of the ENTRE coalition participating in both the protests and the EITI process. Evidence reviewed during consultations and provided in the letters from civil society members suggests that civil society is able to campaign and protest against the mine both locally and internationally. The CSO members of the MSG, who are also members of the ENTRE coalition, raised concerns about the social conflict around the Pueblo Viejo mine and noted the unwillingness of government and industry members to include this in the EITI’s agenda.

The Secretariat recognises that self-censorship may limit civil society actors’ possibilities to express concerns during stakeholder consultations. An analysis of the broader environment for civic engagement does not indicate that this is the case in the Dominican Republic. In Freedom House’s Freedom in the World 2019 rating, the Dominican Republic receives the highest score on individuals’ freedom of expression and the freedom of NGOs engaged in governance and human rights related work. The Freedom in the World rating notes that freedom of assembly is guaranteed, but the police sometimes disperses protests violently.

The Validation Committee reviewed the case on 29 May, 17 June, 7 November, 4 December 2019 and 22 January 2020. Based on the findings above, the Validation Committee agreed to recommend the assessment card outlined below.

The Committee also agreed to recommend an overall assessment of “meaningful progress” in implementing the 2016 EITI Standard. Requirement 8.3.c of the EITI Standard states that:

c) Consequences of non-compliance

iv.   Meaningful progress. The country will be considered an EITI candidate and requested to undertake corrective actions until the second Validation.

(1) If the country achieves meaningful progress overall in the second Validation, but with no improvements on individual requirements, the country will be suspended and requested to undertake corrective actions until the third Validation. If the country achieves meaningful progress overall in the third Validation but with no improvements on individual requirements, the country will be delisted. If the country achieves meaningful progress overall in the third Validation, but with considerable improvements across several individual requirements (i.e. several but not all requirements that were previously unmet have been met), the country will remain suspended.

The Board will establish new corrective actions. Failure to meet all requirements in the fourth Validation will result in delisting.

The Validation Committee agreed to recommend a period of six months before the Dominican Republic’s second Validation under the EITI Standard., in line with Requirement 8.3.d.ii, which states:

d) Timeframes for achieving compliance.

ii.    Where Validation verifies that a country has not achieved compliance, the EITI Board will establish the corrective actions that the country is required to undertake and a timeframe of 3-18 months for the next Validation where progress with the corrective actions will be assessed. In establishing the timeframe for completing the corrective actions, the EITI Board will consider the nature of the corrective actions and local circumstances. The Board retains the right to establish shorter or longer timeframes. In accordance with provision 8.5, a country may request an extension of this timeframe. A country may also request to commence Validation earlier than scheduled by the EITI Board.

Scorecard for Dominican Republic: 2020

Assessment of EITI requirements

  • Not met
  • Partly met
  • Mostly met
  • Fully met
  • Exceeded
Scorecard by requirement View more Assessment View more

Overall Progress

MSG oversight

1.1Government engagement

The government is engaged in the EITI process. Relevant government agencies have played an active role in implementing the EITI including engaging in the MSG process as full members and collaborating in technical support groups. Government agencies participate actively in the EITI reporting process.

1.2Company engagement

Company representatives are fully, actively and effectively engaged in the EITI process. There is an enabling environment for company participation and all material companies participate in EITI reporting.

1.3Civil society engagement

Civil society is actively and effectively engaged in the EITI process. Stakeholders are able to engage actively in the design, implementation, monitoring and evaluation of the EITI process.

1.4MSG governance

The MSG has representatives from each stakeholder group with no suggestion of interference or coercion in the nomination processes. The ToR for the MSG addresses the requirements of the EITI Standard and stakeholders have not highlighted any significant deviations from the ToR in practice. MSG appears to be functioning well as an oversight body, although it rarely serves as a platform for policy debate.

1.5Work plan

The 2019 EITI work plan is publicly accessible, produced in a timely manner and updated annually, with objectives aligned with national priorities. The work plan also includes specific activities to follow up on recommendations from EITI reporting. The three constituencies have consulted their broader stakeholder groups in preparing annual work plans.

Licenses and contracts

2.1Legal framework

The EITI Report and the online portal provide a clear, concise overview of the legal framework and fiscal regime. Hyperlinks enable the reader to easily access further information. On-going reforms are comprehensively described.

2.2License allocations

Information about licenses awarded and transferred in 2016 is publicly available. The process for awarding and transferring licenses is described. Stakeholders did not express concerns about non-trivial deviations.

2.3License register

Publicly available license information appears to be comprehensive, and it is commendable that the government has published licensing documents.

2.4Policy on contract disclosure

The policy for disclosing contracts is clearly documented and full contracts are easily accessible on the ministry’s website. The EITI Report and the online portal provide a helpful overview of the contracts.

2.5Beneficial ownership

Not assessed

The MSG has published a roadmap towards beneficial ownership transparency. A working group is conducting an analysis of the legal framework and international best practices. The government already holds information of beneficial owners and is working with companies to enable its publication.

2.6State participation

Not applicable

There is no indication that state participation in the extractive sector gave rise to material revenues in the period under review (2016). However, the information provided in the EITI Report increases public understanding about state participation, including debts that extractive companies owe to the state and the mismanagement of CORDE.

Monitoring production

3.1Exploration data

The EITI Report and the online portal provide a comprehensive yet concise overview of extraction and exploration, including links to further information.

3.2Production data

Production volumes and values are available per commodity for metallic minerals. The production values of non-metallic minerals were disclosed after the commencement of Validation. The Board did not consider this information its assessment.

3.3Export data

The Dominican Republic has exceeded the requirements of the Standard by disaggregating export data by company and destination. The data is published in open format, which facilitates further analysis.

Revenue collection

4.1Comprehensiveness

Reconciliation appears to include all material companies and revenue streams. The reporting omissions by CORDE are documented in the report and do not affect the comprehensiveness of reconciliation. Total government revenues are disclosed by revenue stream.

4.2In-kind revenues

Not applicable

4.3Barter agreements

Not applicable

4.4Transportation revenues

Not applicable

4.5SOE transactions

Not applicable

4.6Direct subnational payments

Not applicable

4.7Disaggregation

Data is disaggregated in practice by project, as each material company only has one project.

4.8Data timeliness

Data has been published within two years from the end of the period covered. Efforts to include the most recent data in the EITI Report improve the usability of the report. Improving the timeliness of revenue disclosures is encouraged.

4.9Data quality

The reconciliation report documents clearly which reporting entities underwent an independent audit, as well as compliance with assurances agreed by the MSG. Although not all government agencies had undergone an audit, all reporting entities provided requested assurances and there were no discrepancies.

Revenue allocation

5.1Distribution of revenues

Revenues are largely recorded in the national budget. The allocation of funds to subnational government entities is comprehensively described and links are provided to further information about the use of funds.

5.2Subnational transfers

Subnational transfers in 2016 and the underlying revenue sharing formulas are disclosed. Discrepancies between the two and a note explaining disagreements about the interpretation of the formula were published after the commencement of Validation. The Board did not consider this information its assessment.

5.3Revenue management and expenditures

Not assessed

It is encouraging that the MSG has included information on the budget-making process in the EITI Report.

Socio-economic contribution

6.1Mandatory social expenditures

Not applicable

6.2Quasi-fiscal expenditures

Not applicable

6.3Economic contribution

All required information is disclosed, apart from total government revenues generated by the extractive industries as a percentage of total government revenues. The percentage can be easily calculated from the absolute figures provided.

Outcomes and impact

7.1Public debate

The two EITI Reports produced by Dominican Republic have been widely disseminated both through events and digital means. EITI data is available in open format. Reports have been presented in comprehensible, accessible and user-friendly ways. There is potential to contribute further to public debate both on national and local level.

7.2Data accessibility

Not assessed

Dominican Republic has made efforts to improve data accessibility, and there is potential for further mainstreaming disclosures.

7.3Follow up on recommendations

The government and the MSG have taken some steps to act upon lessons learned and investigate and address some issues in EITI reporting. More policy-relevant recommendations would help orient the MSG’s focus towards outcomes and impact.

7.4Outcomes and impact of implementation

The MSG has assessed the outcomes and impact of EITI implementation in a note published in May 2019. The Board did not consider this information in its assessment as it was disclosed after the commencement of Validation and lacked support from all MSG members.