Zambia Extractive Industry Transparency


Overview

  • Reference: P-ZM-KZ0-005
  • Approval date: 13/12/1901
  • Start date: 01/01/2002
  • Appraisal Date: 06/04/2012
  • Status: OngoingOnGo
  • Implementing Agency: --
  • Location:

Description

The Zambia EITI Council (ZEC) is responsible for the implementation of EITI in Zambia. It is a multi-stakeholder group made up of 6 representatives each from government, civil society and extractive companies. The chairman is the Secretary to the Treasury of the government. ZEC is supported by a Secretariat which implements its decisions. The ZEC provides oversight to the Secretariat. ZEC is currently financed by Multi-Donor Trust Fund managed by and uses World Bank rules and procedures for procurement. However, for services financed by the GTF resources, the Bank rules and procedures for procurement of goods and consultancy services will be used. The funds will be used for identified activities as indicated in the budget. The beneficiary will open a special account in a bank acceptable to the GTF to receive the project resources.

The Zambia EITI council has developed a 5 year Medium Term Work Plan to facilitate the implementation of the project. The aim of this plan is to promote transparency and accountability in the use of Zambia's natural resources to maximize benefits to all citizens. The Work Plan is attached.

The Ministry of Finance and National planning is fully aware of the project and will be involved in the project through the Secretary to the Treasury and will ensue that implementation is in line with established procedures and benefits the citizens.

The Zambia Field Office will also take a leading role on the Bank side to ensure that reports are prepared and the project is implemented according to the Bank procedures.

Project Start and End Date Activity/MilestonesTimeframe Expression of Interest AdvertFebruary 2013 Recruitment and ward of contract May/June 2013 Preparation of the 2011 Reconciliation ReportJune to November 2013 Dissemination of 2011 Reconciliation ReportNovember 2013 to April 2014

* Refer to Work Plan and Budget

7.Monitoring and Evaluation of Outcomes/results and Reporting

The main indicator is timely production and dissemination of the 2011 ZEITI Reconciliation Report by November 2013 in accordance with the EITI rules on the production of the Reconciliation Reports and further delay may jeopardise the completion of the report within the mandatory required two years.

Procurement of goods and services in ZEITI financed by the GTF will follow the Bank procedures and guidelines. Procurement of the reconciler will follow the agreed rules and procedures between the Bank and ZEC.

Auditing of the project will be undertaken by Office of the Auditor General when auditing the accounts or a private audit firm to audit the projects funds..

ZEC will produce quarterly reports that will indicate physical and financial progress. The reports will be approved by the ZEC. The Bank will undertake supervision missions to the project and will discuss with the Secretariat all issues affecting implementation and propose solution where necessary.

8.Sustainability (refer to Annex I of guidelines for more information)

Implementation of EITI in Zambia is currently funded by the Government of Zambia and the Multi-Donor Trust Fund (MDTF) Grant managed by the World Bank. The MDTF Donors are:- Germany, Canada, France, Norway, Finland, Australia, United Kingdom, Netherlands, European Union, Belgium, Japan, Spain, Switzerland and the United States of America.

In order to enhance financial sustainability of EITI in Zambia, it is necessary to broaden the funding base by requesting mining companies, other bilateral and multi-lateral donors to financially support the implementation of EITI. For long term sustainability, Government and companies' contribution will gradually rise, while dependency on donor funding is reduced.

EITI is a coalition of governments, companies, investors, donors and civil society. There is a possibility of including other sectors other than mining, such as forestry, fisheries in the ZEITI.

9.Budget

The ZEITI has prepared a 5 year (2012-2016) Work plan and budget totalling US$5,673,123. This applications requests part, only US$ 305, 000 for two items from the Work plan (Preparation and dissemination of the 2011 Reconciliation Report).

Dissemination Activities

ZEITI Detailed Activities to be funded under GTF. Activity Budget (US) Production of the 2011 Report120,000 Printing of the 2011 Report20,000 Printing of the 2011 summary Report (1000 copies) 20,000 Publication of 2011 Results in Newspapers20,000 TV/Radio Discussions20,000 Dissemination workshops (10 Provinces)35,000 Follow up on 2011 Discrepancies40,000 Follow up on the Recommendations of the 2010 Report10,000 Auditing project funds20,000 Total305,000


Rationale

The project goal is to promote transparency and accountability in the mining industry in order to maximise benefits to the country. The expected outputs are the 2011 Reconciliation Report and Dissemination of Report. The expected outcomes are awareness of the mining sector's contribution to the economy in terms of taxes and transparency between Government and Mining Industries with regard to tax payments.

Support the implementation of EITI in Zambia through funding of selected activities in the 5 Year Medium-term Work Plan.

The selected activities are:

"Funding of the production of the 2011 ZEITI Reconciliation Report "Dissemination of the 2011 ZEITI Reconciliation Report This will include the following activities- -Posting the 2011 Report on the ZEITI and the International EITI Secretariat website -Publication of hard copies of the 2011 Report -Publication of summaries of the 2011 Report -Publication of the results of the 2011 Report in national newspapers -TV and radio discussions on the 2011 Report- including community radio stations across the country -Dissemination workshops for the 2011 Report- for media, civil society, companies and government -Follow up on discrepancies between what companies pay and what government receives in the Report -Follow up on the recommendations of the 2011 Report For detailed costs please refer to Medium -Term Work Plan Item no. 7


Benefits

Specifically, the project will assist improve revenue transparency in the mining industry. This should lead to increased domestic resource mobilisation from the mining industry. The ultimate beneficiary of EITI implementation in Zambia will be the citizen who will derive maximum benefit from their natural resources through transparent and accountable exploitation of these resources.

Specifically the benefits for the stake holders are as follows:

5.1 Government: Benefit from following an internationally recognised transparency standard that demonstrates commitment to reform and anti-corruption, leading to improvements to the tax collection process and enhanced trust and stability in a volatile sector. Transparency also improves sovereign rating and leads to improved investment.

5.2 Companies: Benefit from a level playing field in which all companies are required to disclose the same information. They also benefit from an improved and more stable investment climate in which they can better engage with citizens and civil society. This can improve their corporate rating and reduce investment risk.

5.3 Citizens and Civil Society: Benefit from receiving reliable information about the sector and a multi-stakeholder platform where they can better hold the government and companies to account.

Gender focused Civil Society Organisations such as Women for Change will be deliberately targeted during dissemination activities in order to enhance their participation and contribution to the discussions on the third ZEITI Report. Particular attention will be given to such organisations dealing with grass root communities in mining areas.


Key contacts

MATILA Mothobi P.S. - OSGE2


Costs

Finance source Amount
MICFUSD 204,875
DeltaUSD 1
TotalUSD 204,875