Assessing Transparency:

Development Finance Institutions, Export

Credit Agencies,
and Extractive Industries
Jonathan Leonard and Alix Schroder
December 15, 2014

RWI Has become

Client
Amir Shafaie & Erica Westenberg

If mining companies and governments published all their mutual transactions, that
would prevent corruption, extortion and loss of revenues, and ultimately lead to
inclusive development, equitable redistribution of wealth and a healthy environment.

Central Assumptions
1. Increased transparency requirements for
payments from extractive industry companies to
sovereign governments will serve to mitigate and
dispel the resource curse

2. International Finance Institutions (IFIs) which

finance extractive industry projects are good
levers for a achieving this type of transparency

International Financing
The research conducted by New
School students relates to Foreign
Direct Investment (FDI) in extractive
industry companies.
(investments from abroad)
It is an examination of the lenders
transparency requirements for the
lendees concessionary contracts
with the sovereign government of
the extraction site.

Purpose of Research
To determine IFI transparency and disclosure policies as they relate to
private sector investment and sovereign risk guarantees in the extractive
sector (oil, gas, and minerals).
To determine how new laws related to transparency and disclosure (DoddFrank 1504 and the EU Transparency and Accounting Directives) would
apply to private sector investments financed through DFIs and ECAs

Process
International Finance
Institutions (IFIs)

Extractive Industry
Companies

Sovereign Government
of Extractive Site

Research Topic
International Finance
Institutions (IFIs)

Does this contract

Extractive Industry
Companies

Require disclosure of
payments for this contract?

Sovereign Government
of Extractive Site

Export Credit Agencies (ECAs)

Investment banks are infused with the power of their sovereign government to lend
money to domestic companies for their activities abroad. They are unabashedly and
explicitly motivated by the financial promotion of national economic interests.

Development Finance Institutions (DFIs)

Institutions, created by a group of countries, to provides financing for the purpose of development.
MDBs have large memberships including both developed donor countries and developing borrower
countries.
The most commonly known MDB is The World Bank

State Laws Mandating EI Transparency

Dodd-Frank Section 1504

EU Transparency and Accounting Directives

The Extractive Sector Transparency Measures Act

Global Frameworks Promoting Transparency

Countries implement the EITI Standard to ensure
full disclosure of taxes and other payments made
by oil, gas and mining companies to governments.

A global network of civil society organizations

united in their call for an open and accountable
extractive sector.

Has a sustainability framework created by the IFI

(part of the World Bank) to encourage the
transparency and accountability of its clients.

Research Findings
Most development finance intuitions had some form of payment
transparency and disclosure requirements (IFC, MIGA, EBRD, OPIC,
AfDB).
Implementation of policies is weak and not sufficiently disaggregated.
Several have very weak or no policies (IDB, ADB, JBIC).

EU Accounting and Transparency Directives and Dodd-Frank 1504 (once

implemented) will increase disclosure, but would not apply to all
companies receiving financing.

IFIs Extractive Industry Portfolio

1.1 IFI projects, countries, and total portfolio amount
IFC

MIGA

EBRD

IBD

AfDB

ABD

Oil & Gas

Mining

Oil & Gas

Mining

Oil & Gas

Mining

Oil & Gas

Mining

Oil & Gas

Mining

# of
Projects

30

37

14

16

N/A

N/A

N/A

N/A

# of
Countries

23

225

N/A

N/A

N/A

N/A

N/A

N/A

$2 billion
(2013)

$500
million
(2013)

$918.4
million
(2013)

$240
million
(2013)

$1.5
billion*
(20042013)

$1
billion*
(20042013)

Total
Portfolio

$50.8 million*
(2008-2012)

Est. $1.6 billion*

(1990s-2013)

Oil & Gas

JBIC

Mining

N/A

N/A

$500 million*
(2003-2013)

OPIC

Oil & Gas

Mining

N/A

N/A

4 projects (2011
estimate)

N/A

N/A

N/A

Estimated $74
billion*
(20032013)

Oil & Gas

Mining

$345 million*
(2011 estimate)

Ranking of IFIs
1.2 Comparative Strength of Transparency, Accountability, and Accessibility in
IFIs
IFC

MIGA

EBRD

AfDB

OPIC

ADB

IDB

JBIC

Revenue and
Payment
Disclosure

Satisfactory

Partial

Partial

Weak

Partial

Weak

Failing

Failing

Contract
Disclosure

Partial

Partial

Weak

Weak

Partial

Weak

Failing

Weak

Mechanisms
of Compliance

Satisfactory

Satisfactory

Partial

Partial

Weak

Weak

Weak

Failing

Accessibility
of Information

Partial

Partial

Partial

Partial

Weak

Weak

Weak

Weak

Score

10

Scoring Matrix:
Satisfactory = 3
Partial = 2
Weak = 1
Failing = 0

Advocacy Recommendations
Existing policies on payment disclosure and transparency should be
strengthened and properly implemented.
Data should be disaggregated on a project by project basis.
DFIs should adopt EITI standards.
Dodd-Frank 1504 rules on payment disclosure should be reinstated
and implemented as soon as possible.