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Wednesday, August 20, 2025

Democratising data tackles corruption risks in the energy sector

by

TTEITI
41 days ago
20250708

In the glob­al and lo­cal en­er­gy sec­tor, there are many cor­rup­tions risks of which cit­i­zens, com­pa­nies and Gov­ern­ment should be aware and vig­i­lant. These risks ap­pear at dif­fer­ent phas­es. They can emerge at the stage of li­cence and con­tract award to the com­pa­ny, the reg­is­tra­tion stage where ben­e­fi­cial own­er­ship in­for­ma­tion of com­pa­nies, the Gov­ern­ment part­ners with, is dis­closed. The risks and ac­tors are var­ied. These in­clude but are not lim­it­ed to bribery, col­lu­sion, po­lit­i­cal cap­ture, con­flict of in­ter­est, use of shell com­pa­nies and mon­ey laun­der­ing and ter­ror­ist fi­nanc­ing. Mit­i­gat­ing all these risks can prove chal­leng­ing. How­ev­er, by de­moc­ra­tis­ing da­ta and dis­clos­ing crit­i­cal in­for­ma­tion coun­tries can lessen these risks. The avail­abil­i­ty, ac­ces­si­bil­i­ty and abil­i­ty to use of da­ta for cit­i­zens and an­ti-cor­rup­tion agen­cies is key. The Ex­trac­tive In­dus­tries Trans­paren­cy Ini­tia­tive (EITI) dis­clos­es da­ta aimed at mit­i­gat­ing cor­rup­tion.

T&T has im­ple­ment­ed the EITI for over a decade and the ini­tia­tive has list­ed tack­ling cor­rup­tion as one of its strate­gic pri­or­i­ties over the next five years. The up­dat­ed EITI Stan­dard 2023 ad­dress­es an­ti-cor­rup­tion mea­sures tak­en by re­port­ing com­pa­nies, in­clud­ing their in­ter­nal poli­cies and how these poli­cies im­pact ben­e­fi­cial own­er­ship dis­clo­sure, sup­pli­er en­gage­ment and com­pli­ance. Ac­cord­ing to Stan­dard Re­quire­ment 1.2 b, “Re­port­ing com­pa­nies are ex­pect­ed to pub­lish an an­ti-cor­rup­tion pol­i­cy set­ting out how the com­pa­ny man­ages cor­rup­tion risk, in­clud­ing their use of ben­e­fi­cial own­er­ship da­ta. In ad­di­tion, com­pa­nies on the mul­ti-stake­hold­er group are ex­pect­ed to en­gage in rig­or­ous due dili­gence process­es.

Oth­er re­port­ing com­pa­nies are al­so en­cour­aged to en­gage in rig­or­ous due dili­gence process­es. Stan­dard Re­quire­ment 1.4.b al­so states, “the mul­ti-stake­hold­er group is re­quired to con­sid­er is­sues linked to the gov­er­nance of the ex­trac­tive in­dus­tries, in­clud­ing com­ple­men­tary ac­tiv­i­ties re­lat­ed to an­ti-cor­rup­tion; en­er­gy tran­si­tion re­forms; gen­der eq­ui­ty; and ar­ti­sanal and small-scale min­ing (where ap­plic­a­ble).”

The TTEITI Steer­ing Com­mit­tee re­viewed the an­ti-cor­rup­tion el­e­ments of the stan­dard and held sev­er­al meet­ings to dis­cuss an ap­proach to meet­ing the re­quire­ments of the stan­dard. The Steer­ing Com­mit­tee agreed to dis­close na­tion­al an­ti-cor­rup­tion leg­is­la­tion, cap­ture the num­ber of re­port­ing com­pa­nies with an­ti-cor­rup­tion poli­cies and en­gage com­pa­nies on their due dili­gence process­es. Of the 15 re­port­ing com­pa­nies, 11 dis­closed their an­ti-cor­rup­tion poli­cies while four com­pa­nies do not have an an­ti-cor­rup­tion pol­i­cy in place. The dis­closed poli­cies fea­ture guid­ance on codes of con­duct, mon­i­tor­ing and vet­ting of sup­pli­ers, fi­nan­cial re­port­ing, an­ti-bribery and fraud. Some of the dis­closed poli­cies al­so pro­vide guid­ance on fair trad­ing, con­flict of in­ter­est, an­ti-mon­ey laun­der­ing and eco­nom­ic sanc­tions. The com­pa­nies pro­vid­ing these dis­clo­sures range from multi­na­tion­als (BP and Shell) to state en­ter­pris­es (NGC and Her­itage) as well as lease and farm out op­er­a­tors (Lease Op­er­a­tors Ltd).

Cor­rup­tion red flags

The Nat­ur­al Re­source Gov­er­nance In­sti­tute (NGRI) cre­at­ed a list of 12 red flags by ex­am­in­ing over 100 cas­es of li­cence or con­tract awards in 49 oil, gas and min­ing sec­tors, in which there were ac­cu­sa­tions of cor­rup­tion. These red flags can be used by over­sight ac­tors (e.g. jour­nal­ists, law en­force­ment, reg­u­la­tors, civ­il so­ci­ety groups and oth­er over­sight ac­tors, can use these red flags to de­tect and pre­vent cor­rup­tion in the ex­trac­tive sec­tors.

Twelve red flags to de­tect and pre­vent cor­rup­tion in the ex­trac­tive sec­tors (by fre­quen­cy)

In T&T the en­er­gy sec­tor has been trans­for­ma­tive. Rev­enue from the sec­tor helps fund so­cial ex­pen­di­ture di­rect­ly linked to cit­i­zens’ well­be­ing, whether CDAP drugs for the el­der­ly or GATE for uni­ver­si­ty stu­dents. En­sur­ing ac­count­able man­age­ment of this rev­enue de­mands pub­licly avail­able da­ta and strength­en­ing in­sti­tu­tions to tar­get cor­rupt prac­tices and pro­mote ef­fec­tive over­sight. When the word an­ti-cor­rup­tion is men­tioned, the ten­den­cy is to think about in­ves­ti­ga­tions and pros­e­cu­tions but de­moc­ra­tis­ing da­ta is a big part of mit­i­gat­ing against cor­rup­tion risks.

Da­ta is a ta­pes­try and one loose thread can un­rav­el fur­ther threads where pub­lic scruti­ny should be mag­ni­fied. The TTEITI’s re­ports pub­licly dis­close com­pa­ny an­ti-cor­rup­tion poli­cies but al­so how com­pa­nies set up sys­tems to mit­i­gate against cor­rup­tion risks. The re­ports al­so dis­close the ben­e­fi­cial own­ers and whether any po­lit­i­cal­ly ex­posed per­sons own com­pa­nies de­vel­op­ing our nat­ur­al re­sources. These are but a few ex­am­ples of da­ta pub­lished. And, as the risk of cor­rup­tion re­mains, the TTEITI will con­tin­ue to pro­mote rev­enue trans­paren­cy and of­fer rec­om­men­da­tions to cor­rect de­fi­cien­cies in the coun­try’s au­dit and as­sur­ance, gov­er­nance and rev­enue col­lec­tion sys­tems.

For more in­for­ma­tion on da­ta linked to ad­dress­ing an­ti-cor­rup­tion risks in the oil, gas and min­ing sec­tor vis­it www.tteiti.com

BOX

​​​The ​​HY­PER­LINK “http://www.tteiti.com”​​is the lo­cal arm of the ​​﷟HY­PER­LINK “http://www.eiti.org”​​ (EITI), ​​the glob­al gold stan­dard for trans­paren­cy, ac­count­abil­i­ty, and gov­er­nance in the oil, gas, and min­ing sec­tors. The ini­tia­tive​​​, which is ​​cur­rent­ly be­ing im­ple­ment­ed in 56 coun­tries,​​​ ​​​fo­cus­es on​​​​ ​​​ rec­on­cil­ing tax and roy­al­ty pay­ments made by ex­trac­tive com­pa­nies with the Gov­ern­ment’s re­port­ed re­ceipts of those pay­ments.

The TTEITI​​​, through​​ its in­de­pen­dent au­di­tor,​​​ al­so makes de­tailed rec­om­men­da­tions aimed at im­prov­ing Gov­ern­ment rev­enue col­lec­tion, da­ta man­age­ment and au­dit and as­sur­ance sys­tems with­in the ex­trac­tive in­dus­tries.

The TTEITI pro­duces an an­nu­al EITI re­port which not on­ly rec­on­ciles Gov­ern­ment re­ceipts against​ ex­trac­tive com­pa­ny pay­ments​​​,​​​ but al­so con­tains con­tex­tu­al in­for­ma­tion on key ex­trac­tive sec­tor is­sues in­clud­ing​​​:​​​ oil spill​​​ da­ta, ben­e­fi­cial own­er­ship dis­clo­sure​​ and green­house gas emis­sion dis­clo­sure​​. In its 11 re­ports to date, the TTEITI has rec­on­ciled ap­prox­i­mate­ly TT$180 Bil­lion in ex­trac­tive com­pa­ny pay­ments with gov­ern­ment’s de­clared re­ceipts, en­sur­ing all monies are ac­count­ed for and in­de­pen­dent­ly ver­i­fy­ing rev­enue earned from the ex­trac­tive sec­tor. ​​​


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