Open Project Data Matters. ResourceProjects.org Is How We Can Make It Useful
Let’s start with the good news: The extractives transparency movement is winning.
Increasing the transparency in the extractive industries has been a battle that has been fought over the last decade. The Publish What You Pay coalition launched in 2002, and the Extractive Industries Transparency Initiative (EITI) was created a year later. The result? Public awareness of the size and potential of revenues from oil, gas and mining grew, and a movement towards open data in the sector has gathered steam.
The importance of this issue has been matched by strong legislative moves, first in 2010 in the US via Section 1504 of the Dodd-Frank Act, and more recently in the EU in the form of the Accounting and Transparency Directives in 2013. These have created an emerging mandatory disclosure regime, obliging companies to disclose all of the payments they make to governments, disaggregated at the project level. The new mandatory disclosures will begin in 2016, while many country-level EITI reports already contain project-disaggregated data and some companies already release this information voluntarily for their global operations.
So as the momentum for transparency gathers, the resulting data will soon grow from a trickle to a torrent. (For example, the European Commission has estimated that annual payments to governments worldwide by EU-listed oil and gas companies amounts to some €362 billion—when accounted for that will be a lot of data). Maximizing the usefulness of this data will be the new challenge.
Why is project-level reporting such a big deal?
Project-level information about payments may seem like something of an obscure technical detail. At its inception EITI only required that countries aggregate information on payments to a particular government across all companies operating in a country. With time, many countries began to reveal information on a company-level basis in EITI reports, but data was seldom broken down for each contract a company signed or project it operated. EITI has since updated its rules under the new EITI Standard (adopted in 2013) to require that the countries break payment data down by project and recommend disclose it alongside the contracts. (Each project is typically associated with a governing primary contract, or a set of closely linked contracts). This is a major step forward, but to understand why we must consider what it means to see information broken down at the project level.
Projects represent the physical, tangible presence of extractive operations in a country. The project is the mine that people see out of their window, or the oil field along their coastline. It has a location, an owner, and it employs people. Each projects is tied to a contract, or license.
Campaigners have already highlighted how vital project-level reporting will be. Governments and citizens groups alike can use project data to model resource project revenues and consequently forecast budgets, such as in Ghana where all interested parties can see how different oil prices affect the money available for the 2015 budget. Others, such as Global Witness, have used this to model hypothetical oil projects, using contract information, while IMF economists routinely use (and stress the importance of) project-level information for fiscal design and technical assistance.
Project information has a multitude of applications beyond fiscal modeling. It can be tied to spatial data to help better understand local impacts or environmental consequences, as highlighted by recent academic papers.
Projects tie resource extraction to their locality and therefore the effects on communities and interactions with local governments. And because every project has an owner, and an operator, more data can link projects to the complex world of corporate networks.
The wave of project-level information creates a huge opportunity for better understanding of the sector.
Opportunities, challenges and a way forward
Soon the new EITI Standard will require countries and companies to report project payments. In fact, many countries already do so; these include Ghana, Indonesia, Mozambique, Timor-Leste, Trinidad and Tobago, Yemen and Zambia. Furthermore, Tullow Oil have already taken the step to publish project-level payments voluntarily, across their global operations ahead of legislative requirements. Companies disclose other project information as part of submissions to stock exchanges, especially for new listings.
The new EU Accounting Directive requires that member states legislate that listed companies disclose project-level payments to national authorities. The UK has already adopted this legislation on an accelerated timetable and should release a reporting template for UK-listed companies in early 2015. The reporting template includes “project identifiers” (more on these below) and a full breakdown of payments associated with each project under the listed companies’ control.
Project identifiers are a challenging concept. A project identifier would be a unique digital identity for every resource project in the world. No global convention exists since public project reporting is a relatively recent concept. Countries that already report project-level payments have adopted a variety of approaches, including using “project name” as the primary identification key. However, as the volume and variety of project reporting grow a more robust method of identification will be required. Project names get misspelled, have different names in different languages, and can even change as ownership changes. Instead what is needed is a project code or “unique project identifier,” along the lines of the OpenLEI project for identifying corporate entities, or the Open Contracting Partnership's OCID initiative for identifying contracts. Of course these three efforts are (and should be) linked.
As extractive sector disclosures increase, reporting should be standardized and made accessible. Initiatives like EITI, as well as regulators such as those in the UK are already taking steps in this direction.
NRGI is building an open repository of project-level identifiers and accompanying data. As new reporting practices begin to roll out, we will need to pull, scrape, clean and organize a growing collection of information to maximize its usefulness. Resourceprojects.org will be a step towards this objective.
The ambition is twofold. One aim is to provide a searchable interface to a system of unique identifiers for projects – in effect a URL for every resource project in the world.
Second, we aim to link on top of that URL a wide variety of related information: the location of the project in the country, the primary contract or legal agreements governing a project, the payments associated with a project, and much more.
Efforts to gather important pieces of the puzzle are increasing: compilations of open contracts can be found here and here. Compilations of summary EITI data are here. And maps of concession areas are here and here. However, central node of all this information—the thing that links all these others together and is the anchor to what people care about—is the project. Resourceprojects.org will help facilitate the interoperability of extractives data, linking them together in one place. This will also serve as a way to connect projects to information from other sectors and potentially form the foundation of an extractives data standard.
As we kick off the effort to map the projects we are well aware that we cannot do this alone. For project-level information to become widely used and useful we must connect with the entire community of data users: from journalists, technologists and armchair accountants to civil society groups, academics and oil and mining geeks working on extractive policy issues.
Finally, if you are already working on data and natural resources – get in touch! Over the coming month we will be reaching out at events in Ghana and Germany. For updates about what’s cooking and to get involved head over and sign up to the Google Group.
Jim Cust is NRGI’s head of data and analysis.
