Validation of Sierra Leone Report on Initial Data Collection And
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EITI International Secretariat 15 February 2019 Validation of Sierra Leone Report on initial data collection and stakeholder consultation 2 Validation of Sierra Leone: Report on initial data collection and stakeholder consultation Abbreviations ACC Anti-Corruption Commission AfDB African Development Bank APR Annual Progress Report ASM Artisanal and small-scale mining ASSL Audit Service Sierra Leone ASX Australian Securities Exchange AUD Australian Dollar CAC Corporate Affairs Commission CDA Community Development Agreement CDF Community Development Fund CRF Consolidated Revenues Fund CSO Civil Society Organisation DACDF Diamond Areas Community Development Fund ECAS Environmental Cadastre Administration System / Environmental Protection License Registry ECOWAS Economic Community of West African States EIRT Extractive Industries Revenue Taskforce EITI Extractive Industries Transparency Initiative EIRA Extractive Industries Revenue Act EIRT Extractive Industries Revenue Task Force EIRU Extractive Industries Revenue Unit EPA Environmental Protection Agency EUR Euro E&P Act Petroleum Act 2011 GDP Gross Domestic Product GFS Government Finance Statistics GGDO Government Gold and Diamond Office GIS Geographic Information System GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit GoSL Government of Sierra Leone INTOSAI International Organization of Supreme Audit Institutions IPAU Integrated Projects Administration Unit IA Independent Administrator IAASB International Auditing and Assurance Standards Board IMF International Monetary Fund ISA International Standards on Auditing ISRS International Standard on Related Services ISSAI International Standards of Supreme Audit Institutions ITA Income Tax Act 2000 MAGS Mining and General Services Limited MCAS Minerals Cadastre Administration System MCC Millennium Challenge Corporation MCO Mining Cadastre Office MDA Ministries, Departments and Agencies MLGRD Ministry of Local Government and Rural Development MMA Mines and Minerals Act 2009 MMMR Ministry of Mines and Mineral Resources 3 Validation of Sierra Leone: Report on initial data collection and stakeholder consultation MoFED Ministry of Finance and Economic Development MoLGRD Ministry of Local Government & Rural Development MoU Memorandum of Understanding MSG Multi Stakeholder Group NACE National Advocacy Coalition on Extractives NMA National Minerals Agency NRA National Revenue Authority NRGI Natural Resource Governance Institute PAYE Pay As You Earn PD Petroleum Directorate PEFA Public Expenditure and Financial Accountability PEP Politically Exposed Person PFM Public Financial Management PRRT Petroleum Resource Rent Tax PSA Production sharing agreement PMT Precious Minerals Trading NRA National Revenue Authority RDF Revenue Development Foundation SLAJ Sierra Leone Association of Journalists SLANGO Sierra Leone Association of Non-Governmental Organisations SLEITI Sierra Leone Extractive Industries Transparency Initiative SLL Sierra Leonean Leone SO Strategic objective SOE State-owned Enterprise TIN Tax Identification Number ToR Terms of Reference TSA Treasury Single Account USD United States Dollar 4 Validation of Sierra Leone: Report on initial data collection and stakeholder consultation Contents Abbreviations ......................................................................................................................... 2 Executive Summary ................................................................................................................. 6 Introduction ........................................................................................................................... 12 Part I – MSG Oversight ........................................................................................................... 19 1. Oversight of the EITI process ....................................................................................................... 19 Government engagement in the EITI process (#1.1) ............................................................................. 19 Industry engagement in the EITI process (#1.2) .................................................................................... 22 Civil society engagement in the EITI process (#1.3) .............................................................................. 24 MSG governance and functioning (#1.4) ............................................................................................... 29 Work plan (#1.5) .................................................................................................................................... 34 Part II – EITI Disclosures .......................................................................................................... 42 2. Award of contracts and licenses .................................................................................................. 42 Legal framework (#2.1) .......................................................................................................................... 42 License allocations (#2.2) ...................................................................................................................... 44 License registers (#2.3) .......................................................................................................................... 48 Contract disclosures (#2.4) .................................................................................................................... 50 Beneficial ownership disclosure (#2.5) .................................................................................................. 51 State participation (#2.6) ....................................................................................................................... 54 3. Monitoring and production ......................................................................................................... 59 Overview of the extractive sector, including exploration activities (#3.1) ............................................ 59 Production data (#3.2) ........................................................................................................................... 60 Export data (#3.3) .................................................................................................................................. 61 4. Revenue collection ..................................................................................................................... 64 Materiality (#4.1) ................................................................................................................................... 64 In-kind revenues (#4.2) .......................................................................................................................... 68 Barter and infrastructure transactions (#4.3) ....................................................................................... 69 Transport revenues (#4.4) ..................................................................................................................... 70 Transactions between SOEs and government (#4.5) ............................................................................ 72 Subnational direct payments (#4.6) ...................................................................................................... 72 Level of disaggregation (#4.7) ............................................................................................................... 76 Data timeliness (#4.8) ............................................................................................................................ 77 Data quality (#4.9) ................................................................................................................................. 77 5. Revenue management and distribution ....................................................................................... 86 Distribution of revenues (#5.1) ............................................................................................................. 87 Sub-national transfers (#5.2) ................................................................................................................. 88 Additional information on revenue management and expenditures (#5.3) ......................................... 90 6. Social and economic spending ..................................................................................................... 93 Social expenditures (#6.1) ..................................................................................................................... 93 SOE quasi fiscal expenditures (#6.2)...................................................................................................... 95 5 Validation of Sierra Leone: Report on initial data collection and stakeholder consultation Contribution of the extractive sector to the economy (#6.3) ............................................................... 95 Part III – Outcomes and Impact............................................................................................... 99 7. Outcomes and Impact ................................................................................................................. 99 Public debate (#7.1) ............................................................................................................................... 99 Data Accessibility (#7.2)....................................................................................................................... 102 Lessons Learned and follow-up on recommendations