Why is Tax Justice central to the accountability agenda in the extractives sector?

On 20 April 2018 PWYP hosted a webinar on tax and extractives as part of our ongoing engagement with PWYP members around the world to inform the PWYP 2020-2025 global strategy.

Kwesi Obeng kicked off the conversation with a presentation of the key ideas in his discussion paper, with respondents Daniel Mule (Senior Policy Advisor on tax and extractives at Oxfam US) and Mona Thowsen (Secretary General PWYP Norway) picking up and exploring some of those themes in the context of their work at national and global levels.

Following the webinar, Elisa Peter, Executive Director and Stephanie Rochford, Director of Member Engagement, sat down to discuss what we learned and how some of the discussion might be reflected in PWYP’s strategic planning for 2020 to 2025.

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Stephanie: Tax Justice is an umbrella concept that covers a wide range of issues – from the misguided use of tax incentives by governments to attract investment, to the need for cost-related data disclosure (in addition to payment data), to the use of tax havens by multinational companies that divert potential tax revenues, to questions relating to mineral quality and quantity, to the rights of communities (who are the ones most impacted by extractive activities) to access services and livelihoods. What are the themes that you felt resonated most strongly with our members during the discussion?

Elisa: Well it’s clear that members already see PWYP’s work to date as a contribution to a broad Tax Justice movement, given PWYP’s mission to ensure that any benefit (including tax revenues) derived from resource extraction is shared sustainably and equitably. I think that really came out clearly in this conversation – PWYP’s work at national and global levels is happening in the context of a Tax Justice agenda. This includes not only our flagship PWYP campaign on payment disclosure, but also the more recent push for beneficial ownership data, including through the EITI Standard; as well as the calls of many of our coalitions in the ‘home’ countries of multinational extractive companies for more transparency on tax through extended country by country reporting, as Mona from PWYP Norway pointed out. So, really, the question is not so much if but rather how PWYP can situate itself more strategically to work with other actors in the Tax Justice movement in a way that will enhance our respective impact and build on PWYP’s strengths as a global network of civil society activists.

Stephanie: Yes, PWYP’s strength and unique value absolutely lies in our member organisations – and many of them are human rights defenders. To what extent do you see an opportunity for PWYP to bring the rights of communities to the fore by incorporating aspects of the Tax Justice agenda more explicitly into our global strategy?

Elisa: That’s something that I think is becoming more evident: there’s a clear demand to look not only at the revenue collection aspect of a fair tax system but also how those taxes are then spent in a way that meets the needs of citizens, acknowledging that those needs will be very different depending on gender, class, poverty levels and many other factors. The example of Oxfam’s “Even it up” campaign can be a really useful one for PWYP to take inspiration from! Even if a country is able to capture the fair share of revenues generated by extraction through a solid fiscal regime, it is essential that the spending of these revenues is then managed effectively to alleviate poverty and end extreme inequality. Only when all these pieces are in place can natural resource exploitation be a force for good.

Stephanie: On that note, the question of the explicit link between tax and gender equality was posed during the discussion. Maybe that’s an angle where PWYP can add value at a global level?

Elisa: I was really pleased that this question of how tax relates to gender came up, particularly in light of the recent launch of our gender and EITI pilot project, which recognises that the transparency and accountability movement as a whole has not paid sufficient attention to the different ways in which women and men are able to participate in calling for and using extractives data. Kwesi’s response clearly highlighted that tax is absolutely gender discriminatory: for example, when tax breaks are offered for the benefit of corporations and their investors, the result is a reduced provision of the services that women tend to rely heavily on (such as healthcare, etc). So I definitely would like to see us continue to reflect on how we can do more as a movement to recognise and address the specific ways in which women are impacted by seemingly far removed macroeconomics decisions like tax policies.

Stephanie: Mukasiri Sibanda from PWYP Zimbabwe was unfortunately not able to join the webinar today, but he has eloquently expressed the need to ensure that the focus of PWYP’s work, as well as that of the Tax Justice movement, should be rooted in the rights of communities in resource rich countries to access services such as education, healthcare, infrastructure etc.

Elisa: Yes, and Daniel noted that greater participation in, and oversight of, expenditure of extractive revenues is a critical aspect of PWYP’s larger theory of change; but there are also a lot of challenges for PWYP members when it comes to looking at extractive revenues.

Stephanie: That’s true – unlike the issue of tax administration and collection, questions relating to expenditure of extractive revenues ultimately move into the realm of public financial management more broadly, since it’s rare to see ring-fenced budgets which would allow extractive revenue expenditure to be tracked. So the question of accountability here goes beyond extractives.

Elisa: I don’t think there’s a clear answer on how to handle this challenge – as a movement we will need to wrestle with the extent to which PWYP should, or is in a position to, focus our efforts on wider questions of public financial management.

Stephanie: And we have an all too timely example of why that’s not a conversation that PWYP can shy away from…

Elisa: Yes, the arrest of PWYP Niger national coordinator and Board member, Ali Idrissa, came about as a result of peacefully protesting against a finance law that they argue will foster corruption and facilitate tax breaks for the elite. Ali’s arrest brings home the realities of the powerful interests at play when it comes to natural resource extraction, and that accountability – natural resource justice – is not yet achieved and is going to be a hard won battle.

Stephanie: Yes, and this is something that we hope our new strategy will reflect as well – how PWYP members can create spaces to hold those powers to account. In terms of where we go next with our strategic planning in the context of Tax Justice in particular, what are some of the ideas that we want to bring to the PWYP Global Council when they meet in a couple of weeks to refine the 2020-2025 strategic priorities?

Elisa: There were a few key ideas from each of the participants that I found really exciting. For example, thinking about how we can leverage the power of the PWYP collective to tackle issues relating to tax incentives (something that Don Hubert clearly identifies as an entry point for engagement in the PWYP Canada report, “Many Ways to Lose a Billion”). Equally, there seem to be a few windows of opportunity to engage with corporate actors (for example, building on the work of the BTeam to develop responsible tax principles); or with multilateral institutions like the World Bank who are in a position to influence discriminatory tax systems. And there was a suggestion to develop more case studies that evidence the ways in which tax evasion and abuse in the extractive sector is facilitated, and the impact it has.

Stephanie: I agree, those were all really interesting aspects to consider. In addition, there was a clear message on the webinar that we need to capitalise on PWYP’s work over the past 16 years to make payment and contract information available, and to equip our members to use that information to make the evidence-based case for the equitable and sustainable management of the extractive sector.

Elisa: Absolutely – and we will continue that call for transparency which is what provides us with the evidence base to push for change.

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Thanks to all those who joined the webinar and contributed your questions and comments. You can find a summary of the first webinar on The Future of Extraction here.

And if you missed the webinar you can catch up by watching the recoding below:

Further webinars on tax and extractives are taking place in French and Russian this week.

Further reading:

BG Group’s payments to the Government of Tunisia, 2015

Inquiry from the Tunisian Coalition for Transparency in Energy and Mines to the Government of Tunisia Questions for the Government of Tunisia:

BG Group has reported US$101,365,000 (US$7,199,000 in kind plus US$94,166,000 in cash) in total payments to the Government of Tunisia during 2015 (Report on Payments to Governments for the Year 2015).


Of these payments, US$66,506,000 (65.61%) were taxes, US$27,660,000 (27.29%) royalties paid in cash, and US$7,199,000 (7.10%) royalties paid in kind (barrels of oil equivalent).

• US$94,166,000 in cash to Monsieur le Receveur des Finances du Lac (92.90%)

• US$7,199,000 in kind (boe) to L’Entreprise Tunisienne d’Activités Pétrolières (7.10%)

• Miskar: US$54,587,000 (US$2,750,000 in kind, US$51,837,000 in cash) (53.85% of total)

• Miskar reported net production 2015: 18.1 kboed (60.13% of total)

• Hasdrubal: US$46,778,000 (US$4,449,000 in kind, US$42,329,000 in cash) (46.15% of total)

• Hasdrubal reported net production 2015: 12.0 kboed (39.87% of total)

The Local Resource Curse: The symptoms in the Mining Area of Gafsa

Research on the resource curse has been mostly discussed as a state-level phenomenon; few studied have been conducted on local resource curse. This paper aims to contribute to the local resource curse literature through the identification of its symptoms in the mining area of Gafsa. Results reveal that this region suffers from a local resource curse, the phosphate mining is not a blessing but it is a curse. It has caused adverse impacts (Economic, social and environmental impacts) on local communities.


The Tunisian Coalition for Transparency in Energy and Mines is a PWYP affiliate formed in 2015 to work for sustainable development through proper use of the country’s natural resources. Its 16 member organisations are united in their goal of a transparent extractive sector, campaigning for Tunisia’s government to adopt the EITI. They are also pressing the government to transpose articles in the country’s new constitution related to good natural resource governance into laws that guarantee transparency and accountability within the extractive sector.

Rahma Bin Youssef

I work on reversing the resource curse that has changed the province I live in, Gabes, from the paradise oasis it once was to the impoverished area with poor infrastructure it is today. There is also high air and water pollution due to the exploration and extraction activities of several national and international oil companies.

As part of the civil society network in Tunisia, I have been actively campaigning for improving the quality of life in Gabes by demanding a fair share of the revenues generated by the province of Gabes. Demanding that the government publishes how it spends the revenues will help us leverage our demands for improving the environmental conditions in my area. Being part of PWYP’s affiliated coalition in Tunisia allows me to lobby in an organised way to promote change.

Tunisian civil society unites for a better tomorrow

The revolution of 2011 in Tunisia overthrew the government, coined the term ‘Arab Spring’ and spread revolutionary sentiment across borders. Another, perhaps less obviously dramatic, consequence of the Tunisian revolution has been the increase and strengthening of civil society organisations in the country. Prior to January 2011, CSOs were namely composed of organisations that acted as instruments in the hands of the national government, and therefore were hardly in tune with the reality of societal problems. After the revolution, associations focused their interest on different areas, especially that of human rights and good governance across sectors which had been neglected under the former regime.

CSOs, including associations, workers’ and employers’ unions, charitable organisations and other grassroots initiatives involving citizens became involved in the national debate that followed the 2011 revolution. An important question in this national debate was that of natural resources, and several CSOs began lobbying for more transparency in the extractive sector. A group of organisations, namely led by ATTEM ( Association Tunisienne de Transparence dans l’Energie et les Mines) successfully reached out to the Prime Minister Jebali in 2012 and encouraged him to announce in June of that year the Tunisian government’s intention to implement the Extractive Industries Transparency Initiative (EITI). Further progress on natural resource management was made with the adoption of Tunisia’s new constitution that included several provisions on transparency in the extractive sector.

Indeed, strong mobilisation by civil society led to the successful lobbying of the head of the energy committee at the NCA, Mr. Chafic Zurguine. During one workshop organised by ATTEM in January 2014, two weeks prior to the approval of the new Tunisian reformed constitution, civil society organisations represented by around 25 participants met with Mr. Zurguine and discussed the importance of including articles that heavily support the good governance of natural resources. On January 26th, the Tunisian reformed constitution was adopted hence securing the passage of several constitutional articles that ensured that the state “strives for proper management of natural resources.” (Article 12), underscores that “natural resources belong to the Tunisian people.” (Article 13), stipulates that natural resource contracts need to be ratified by the NCA. Article 136 also allows for the possibility of allocating a percentage of natural resources to advancing regional development and regional management of resources.

In its present form, the constitution introduces a number of transparency and accountability provisions absent from previous versions; these include the state’s commitments to anti-corruption (Article 10), sustainable development and regional equity (Articles 12 and 129), impartiality and accountability in public administration (Article 15), and also citizens’ right to information (Article 32).

Yet, while this progress is encouraging, fewer advances have been made regarding EITI. As a way to keep government pressure up, Tunisian civil society groups expressed a desire to start a network or a coalition through which they could unify their efforts and become an effective constituency playing a key role in the governance of their natural resources. They therefore formed, during the ATTEM January 2014 workshop, a nascent network that included 15 different Tunisian civil society groups By Mid 2014, this nascent network had decided that in order for them to function properly and act upon an advocacy based coalition action plan, they required assistance. They therefore approached PWYP and NRGI for help in transforming this budding network into a full- fledged coalition with a governance structure aligned to Publish What You Pay’s and an advocacy based action plan that reflects the coalition’s strategic priorities.

On December 5th and 6th, 2014, PWYP’s International Secretariat carried out its first workshop, which included 19 representatives from Tunisian civil society groups. Groups from the extractive areas of Kairawan, Gabes, Gafsa and Tataween participated, along with ones from the capital, in setting the strategic priorities of the nascent coalition as well as discussing the overall governance structure to be adopted. The strategic priorities include adoption of the EITI by the government, raising awareness amongst civil society of the importance of the EITI, reforming current laws so that they harmonise with the constintution pertaining to the good governance of the EI sector in Tunisia, as well as supporting the OGP process in Tunisia.

As the Arab Spring in other parts of the region turn into winters of discontent, the world looks to Tunisia for some good news. Hopefully, Tunisia can prove to be a successful post-revolution model with government and citizens working together towards a better management of their natural resources.