The Panama Papers, corporate filings and the “bad guy” / “sharp guy” issues

Oil geek question: what do ConocoPhillips, Halliburton and Schlumberger have in common? Well… they all share the fact that they have, or at least at one point had, Panama incorporated subsidiaries. So why is that, if Panama isn’t actually producing any oil, as the U.S. Energy Information Administration states on their website?

With the Panama Papers big in the news, this will probably not come as a surprise. And to be clear, setting up local subsidiaries in Panama is not illegal, nor is it unusual for extractive companies to open up incorporations across the globe – even where they are not operating directly. That becomes obvious through the thousands of documents available in public domain, in which oil, gas or mining companies disclose their vast networks of affiliates, including those in Panama, but also those based in one of the various other financial centers, like the Caymans or the British Virgin Islands (BVI). So unlike all of the stories coming out of the Mossack Fonseca leak, the aforementioned offshore links can be found in the companies’ own filings, which means that you can find them on Aleph, OpenOil’s corporate filings database. In fact, a quick search on Aleph will bring up 500 similar references to Panama incorporations of extractives companies, close to 1,500 references to those in the BVI, or 2,000+ on the Cayman Islands.

Establishing such links between companies, people, and jurisdictions is essential to anyone wanting to map out corporate networks – may it be investigative journalists, risk analysts, tax authorities, or anyone else interested in finding out about who multinationals are dealing with. In particular, however, they help to address two major issues in the extractive industries as we have outlined in our case-study on BP.

1) The first issue is the “Bad Guy Issue”.
Corrupt access to natural resources, when dodgy companies are granted licenses for lucrative oil and mining concessions because they are politically connected. Such connections could conceivably be demonstrated using public documents, but it is obviously challenging to do so.

Looking at some of the Mossack Fonseca stories, for example, you will see that corporate filings will help you to lay the groundwork. Such as for this one on how the Beny Steinmetz Group Resources (BSGR) acquired rights to a mining license in Guinea for $165 million, but soon after sold 51% of the rights for more than ten times the price. Ultimately it was through a number of leaks and a series of criminal investigations that the details of the deal could be reconstructed. But Aleph’s 2,000,000 documents already provide you with some relevant leads. Such as this document, that suggests a connection between BSGR and Onyx – a company that in return represented a crucial link between BSGR’s acquisition of the mining site and a $2.4 million payment to Mamadie Touré, one of the wives of former Guinean president Lansana Conté. Then there is also Vale’s announcement on having acquired a 51% stake in the same assets for 2.5$ billion, which should have already alarmed anyone who was aware of the original asset transfer to BGSR for $165 million.

Example Aleph search term: “Caymans incorporated”~20
Search for the name of a jurisdiction and “incorporated” in proximity to find out which companies are registered in the country.

Example Aleph search term: “BSGR Onyx”~50
Proximity searches for two companies, here BSGR and Onxy, can bring up leads to whether there is a connection between them.

 

2) Then there is a second issue, the “Sharp Guy Issue”.
Whether complex corporate structures allow multinationals to engage in “aggressive” tax planning. By “sharp guys” we mean the small armies of lawyers and accountants who are engaged in handling the billions that pass through the accounts of oil, gas and mining companies. And as has been well documented elsewhere, these guys are sharp, so that –  in a world full of complex tax treaties – it is extremely difficult to prove any so-called “transfer mispricing”, or other means to shift profits out of resource producing countries into low- or no- tax jurisdictions, such as the above mentioned Caymans or British Virgin Islands… or Panama.

The question here is more whether governments in say, Africa, would act differently if they were able to see the whole corporate chain of the companies operating. Might they adjust their own taxation policies in light of that? Would they subject billions of dollars of tax-deductible costs submitted to their tax authorities to audit, or at least to more rigorous examination?

So while establishing such corporate chains can be powerful, it can also require you to spend a lot of time browsing through filings, only to find the one odd mention of a particular affiliate of interest. Companies operate globally, but they tend to report locally, meaning that there are many different places where you might have to search – the Canadian SEDAR database or the Australian stock exchange ASX to name just a couple. Fortunately, this is where two of Aleph’s strong points come in. First, Aleph helps you to search across various document bases simultaneously. Second, that you can fully text-search all of the two million available filings, allowing you to find text snippets deep-down in a 100-page long PDF – a service that many of the existing public databases do not allow you to do.

So keeping in mind a few general tips and tricks, there are many different searching techniques through which Aleph will help to map out company networks. To name one, you can choose to search “top-down” for subsidiary lists of a company group, such as listed companies are required to file in many jurisdictions, e.g. in the form of “Exibit-21” on SEC’s EDGAR database. Such filings will then provide you with the names of subsidiaries, their place of incorporation, and the equity held by the parent company – allowing you to follow a corporate chain from a holding company all the way down to an operating entity.

Alternatively, you might choose to search “bottom-up” by entering the name of a single affiliate of your interest and work your way up to it’s ultimate holding company. This works best if you type in the exact legal name of a company in quotes. And if your search brings up too many results for you to process, try to narrow down your search results by adding terms such as “subsidiary”, “owned” or “interest” via a proximity search – all this of course depending on your particular use-case.

While we are working hard to improve Aleph’s functionality and scope – so that you will soon be able to filter results by date, filing type, or company – you should of course also consider other information sources, such as OpenCorporates, or even the companies’ own websites. For all the oil geeks, however, it might be interesting to know that we are also establishing Aleph’s API – which for example will allow you to not just search for one entity, but many simultaneously – such as the 40,000 odd companies mentioned in the Panama Papers. How exactly you will be able to do so, will be described on our github page – so watch this space!

Example Aleph search term: “Ex-21 subsidiaries”~50
Search for subsidiary lists, such as the SEC required “Exhibit 21”, to research a company’s subsidiaries and their place of incorporation

Example Aleph search term: “Rio Tinto subsidiary”~10, “Rio Tinto owned”~10, “Rio Tinto interest”~10
Search for the name of a company and “subsidiary”, “owned” or “interest” in proximity to find out about the company’s affiliates.

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How do mandatory disclosures relate to EITI figures?

This year’s introduction of mandatory disclosures in France and the UK will bring about a considerable amount of reports listing extractive companies’ payments to governments.

The mandatory disclosures promise increased transparency, however, we are only at the beginning of a debate on how to best make use of the new data. One idea has already become apparent: comparing the mandatory disclosure data to EITI figures in order to find irregularities.

In the context of our involvement in Publish What You Pays “Data Extractors” programme, we have simulated how such a comparison could look like and formulated a few first thoughts, as detailed in this document. In this, we try to assess how these different sources referring to the same project relate to each other, in fact, how comparable they are after all. In the following, we would like to highlight a few aspects one has to take into account when comparing the two datasets.

Payments to government
Since the most actual EITI reports date from 2014, we needed to make sure the company reports were also covering that same year. This limited our comparison to the four companies in the Oil & Gas sector, that had both published payments to the government reports and that are operating in one of the few countries for which there already is a 2014 EITI report available. In total, we had six cases. The graph above represents the comparison between the EITI data (in blue) and the figures put forward by the companies (in red) on payments to government. In all cases, we found that the two reports had diverging figures. Deviations range from 0.84% (Mnazi Bay) up to almost 200% (Tullow in Rovuma Area 2&5). This begs the question as to why both reports fail to show the same results:

  1.   Staggered Reporting Cycles The reporting cycles may diverge. We can see this, for instance, when we want to compare Wentworth operations with the matching EITI reports. These are Mozambique and Ghana. In Mozambique, both reports cover the same timeframe, January 1st, 2014 to december 31st. However, in Tanzania, the EITI report refers to a cycle from June 31, 2013 to June 31, 2014, whereas Wentworth covers January 1, 2014 to December 31, 2014.
  1.   Project / Company Conflation Some reports relate to projects, other to companies. EITI reports often list payments by companies rather than by projects. However, there are companies that have only one project in the country, which they operate as part of a group. Statoil, for instance, is listed as a company in the EITI reports, and the figure for its payments in the Mozambique is higher than that in Statoil’s report. One reason being that Statoil has only 65% interest in the project. Without the other shareholding companies’ reports, we cannot have a full comparison with the EITI report.
  1.   What is a ‘payment to government’? There are differences in what counts as ‘payments to government’. We went through the reports and looked at the items listed as payments. Tullow’s report in the Deepwater Tano project in Ghana for instance includes a range of items that are not included in Ghana’s EITI report, such as VAT, local payroll taxes, withholding taxes or infrastructure improvement. It seems that these items are at the discretion of each EITI member state.

This exercise has shown one methodology to analyse the data around EITI reports and the new incoming data from the EU mandatory disclosures. Although such a comparison proves to be challenging, it might help to prepare a thorough analysis that could lead to a more transparent and standardised reporting, as well as, in the best case scenario, helping to find the missing millions.

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Using Aleph: 5 tips and tricks to find out about what extractive companies tell their investors

Every week thousands of pages are filed by extractive companies to stock exchanges across the globe, containing valuable information on oil, gas and mining operations worldwide. Through such disclosures, investors, regulators and researchers can update themselves on any listed company’s financial situation, the economics of particular oil or mining projects, newly signed host-government contracts, changes in directors or shareholders, and lots more. We at OpenOil for example have already successfully searched through them to find precious documents on multiple occasions, such as the hundreds of host-government contracts available on our contract repository.

But so can you… by using our search-tool Aleph. Here we would like to share a few tips and tricks on how to best make use of Aleph. In fact, we are only discovering the power of the search tool ourselves and will put out a series of blogs in the coming weeks to describe particular use-cases, such as comparing interest rates of intra-group loans. In the meantime, we encourage you to explore the thousands of documents already. And to best do so, you should keep the following tips and tricks in mind, so as to find the information that is relevant to you.

1) Be exact when selecting search terms

2) Narrow down search results

3) Use Aleph to find the particular, and not the common

4) Use the language of companies

5) Be creative and playful
 

1) Be exact when selecting search terms

When using Aleph, the selection of the right search terms is crucial. By typing in any series of words into the search bar, you will tell Aleph to list all the documents in which there is an exact match of your search terms. It therefore makes a difference whether you type in the singular or plural of a word, use the British or the American spelling, search for a noun or an adjective, and so on… For instance, the search term “confidentiality” is going to list all corporate filings that contain exactly that term, but not those documents that contain variations of the word, such as “confidential” or “confidentially”. The * symbol can help here: it will find all words beginning with a certain prefix, so that confidentia* will match confidential, confidentially, or confidentiality.

Example Aleph search term: confidentia*
Listing all documents that contain words starting with the prefix “confidentia” and those with alternative endings, such as “confidentiality” or “confidentially”

 

2) Narrow down search results

Select one of the document sources to narrow down your search result

If a search term results in too many documents for you to read through, try to narrow down Aleph’s search results. There are three ways to do so: first, by specifying just one of the document bases. Let’s say you are only interested in EITI reports, you can select the document base on the right side menu and it will only list those documents within that document source, that contain your search term.

The second way to narrow down search results is by adjusting the search terms. Try for example to search for “confidential*” AND “agreement” (make sure you write AND in capital letters), which is going to list all documents that contain the two words. Or even better, search for an exact term in quotes, such as “confidential” AND “production sharing agreement”.

If you still didn’t find what you are looking for, try a proximity search: the third way to narrow down results. Such a search will list documents that contain multiple search terms, but only where your search terms appear in proximity of each other. You can do so by adding ~10 or any other number at the end of quote, e.g. “confidential agreement”~10, which will tell Aleph to list those documents that contain both “confidential” and “agreement” in proximity of 10 words of each other.

Example Aleph search term: “confidential” AND “production sharing agreement”
Listing all documents that contain variations of the term “confidential*” AND the exact quote “production sharing agreement”
Example Aleph search term: “confidential agreement”~10
Listing all documents that have all words inside the quote in proximity of max. 10 words

 

3) Use Aleph to find the particular, and not the common

While Aleph’s API allows for statistical-level analysis, we believe one of the strengths of Aleph’s frontend lies in finding the hidden – a mention somewhere deep down in a PDF. It is therefore important that you test out search terms that are unique to the topic you want to research. For example, search for the name of a particular oil block or mining site, rather than for a country, e.g. “Bulyanhulu” (the name of a gold mine in Tanzania) as opposed to “Tanzania gold”. Another way to find the particular, is by searching for a particular technical term. Let’s say you are interested in commodity trading, then you might want to search for terms such as “cargo” and “API” (a term to specify the quality of oil cargos), – and not for generic terms such as “commodity” or “trading”. The same principle also applies to company names: rather search for the full legal name of the subsidiary that is running the operations in a particular country, as opposed to the names of a group, e.g. “Bulyanhulu Gold Mine Limited” (the subsidiary operating the gold mine), and not “Acacia” (it’s ultimate parent company).

Example Aleph search term: “Bulyanhulu”
Search for the name of a particular oil, gas or mining project, such as the “Bulyanhulu” gold mine in Tanzania
Example Aleph search term: “Bulyanhulu Gold Mine Limited”
Search for the full legal name of a subsidiary running the operations in a particular country, rather for the name of a company group

 

4) Use the language of companies

Corporate filings are full of legal jargon. It is therefore helpful to pay close attention to the language companies use in such documents, so as to abstract out relevant search terms.

Let’s say you are following a company-government dispute in a particular country, and you want to see whether there have been any precedents that could indicate the outcome of the dispute. A first search of the term “court settlement” will already lead you to a few relevant company announcements, such as this one. Carefully reading through these first leads however, you will come across a series of terms that are frequently used in the context, such as “out of court settlement”, “cease all legal action” or “compensations for an amount of…” – all of which will allow you to expand the scope of relevant documents, in this case in regards to court settlements.

Example Aleph search term: “out of court settlement”“cease all legal action”“compensations for an amount of…”
Once you found a document relevant to your research, try to adopt the language to find similar documents

 

5) Be creative and playful

Last but not least, be creative. Play around with different search-terms, methods and use-cases. And keep in mind, many of the biggest data success stories have been born by coincidences…

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Let’s not make the Paris Agreement the “Elephant in the Room”

In my first post I referred to how the Paris agreement mentions transparency, which in the text is confined to transparency around carbon accounting and the disbursement of the huge financial aid that is an integral part of the agreement. Neither of which relate directly to transparency of the upstream in extractive industries, which is where governance efforts are concentrated.

But the agreement does have implications for governance in the upstream as of now. Here I want to examine what they are.

Two general observations to set up the discussion.

First, on timing. If you see the structure of the Paris agreement as being at least as important as its current substance,  then all potential linkages between it and the transparency agenda could – and should – come into play sooner than would be suggested by the current schedule.

In terms of goals, the agreement itself talks in terms of “ the urgent need to address the significant gap” between The Intended National Determined Contributions (INDCs) and the overall global goal set by the agreement. In this sense it is a triumph of diplomacy through constructive ambiguity. Media reports suggest the INDCs add up to global warming or between 2.7 and 3.7 degrees compared to the overall goal of limiting temperature rises to 2 degrees, and having the ambition to reduce them further to 1.5 degrees. This is a massive difference, and the agreement encompasses both.

And it’s the same with processes to monitor implementation of those goals. The agreement sets up a Global “stocktake” by the world body, external review in other words, but not until 2023. At the same time, it urges individual countries to review their own targets by 2020. So the agreement acknowledges that its own current targets are ineffective, and that its mandated review process is too far in the future.

One of several reasons to think that both implementation and monitoring will be sped up is because of another feature of the agreement, the way that both are intimately tied in to the global financing mechanism. This has a hard target of reaching 100 billion dollars a year by 2020, to come from the rich countries to the developing countries, to make the whole agreement stick.

This will dominate the development agenda within 12 to 24 months from now, a subject I will go into in a separate post.

The second general observation is that how strongly each potential linkage kicks in, and when, depends on the overall reaction of global markets. The Paris agreement implicitly accepts the Unburnable Carbon thesis. So when does Unburnable become Unextractable , and Uninvestible? Who will make what bets, balancing which perceptions of investor returns against the now undeniable fact of investor risk? We don’t know. But markets are not slow to factor in risk once they perceive it. I wouldn’t like to be in the shoes of economists at the IEA tasked with producing their next long term Energy Outlook. But the sooner they and others can give a read on how demand may be shaped,  the better.

So, to get to those linkages, here are the bullet points, with details below.

Evaluating New Fossil Fuel Projects

As of this week it is no longer wise for any government to ignore the implications of new fossil fuel development on the commitments to the Paris Agreement. This might not seem self-evident, because the agreement specifies the valuation point of emissions as where they are actually emitted. It does not, in other words, “buy” the argument of activists that responsibility lies with consumers of embedded carbon, and that it is the role of the agreement itself to make consumers in rich countries compensate the world’s cheap manufacturing bases like China for the admissions went into making our fridges, cars, and other appliances. So, viewed from the upstream, why would countries like Mozambique or Ghana need to consider the emissions associated with new fossil fuel development?

Because the oil, gas and coal produced in any new project will either be consumed at home, where it will impede a country’s ability to meet its INDCs, or exported. And if the bulk of production is scheduled for export, the government’s business partners, the international investors, will be thinking hard about the new long term global market conditions. And long-term is key here. Any sizable oil or gas project starting now will have a business model extending well into the 2030s, maybe beyond. The cost of setting up new export infrastructure in a frontier province is rarely less than billions of dollars these days.

There is a rabbit hole of complexity here in the sheer number of variables, and the case-by-case nature of project economics.

For now, let’s just ask how confident is the government of Uganda that Tullow, Total and CNPC, and their investors, are confident enough to build a 1,000-kilometer pipeline out to the Indian Ocean, for export of oil not due to come online until 2017? How confident is the government of Argentina that Chevron, and its investors, are confident enough to invest in an LNG plant for export of gas from the new shale production planned there? In the Eastern Mediterranean how confident are Egypt and Israel that the European Union really represents a viable export market for Eni and Noble for their offshore gas finds, to the extent that it justifies multibillion-dollar investments in new pipelines or offshore floating LNG facilities?

And, most critically for us in the international governance community, if a government is confident, should it be?

Evaluating currently producing Fossil Fuel projects

The risk profile of currently producing projects is of course radically different, and more positive in financial terms. The investments have already been made and even now with the price crash very few conventional oil and gas projects have reached the economic limit of actual operating losses which would cause the company to abandon production. In that sense, day-to-day, why not continue to take what you can get, whatever happens to global prices, before and after the Paris Agreement is factored in?

But to a large extent this reflects dysfunctionality in the economic development plans of many governments which we should be seeking to address anyway.

Inside line ministries and state oil companies, who often have a near monopoly on negotiating and managing projects, business will go on as usual for as long as it can. But once you move out to government as a whole, this should stop being true quite quickly. The agreement mentions economic diversification several times. The natural view from the finance ministry, thinking about revenue forecasts, and the planning ministry, thinking about longer-term economic development, looks quite different.

As a community, we are already engaged in the sensitive but vital task of seeing how we can contribute positively to joined-up public policy. So here is a suggested a rule of thumb: as of now, no engagement of this kind should take place without our referencing the Paris Agreement. It should be in the room even if we only have questions, not suggested solutions or answers. If we don’t mention it, it will simply be the elephant in the room.

Renewable Energy in Africa

The agreement specifies “the need to promote universal access to sustainable energy in developing countries, in particular in Africa, through the enhanced deployment of renewable energy”. How will that affect the continent’s power sector?

There are two key unknowns here. First, just how much will international funding for African renewables increase? It seems almost certain that it will be a massive increase from what it is now. But that’s looking at it the wrong way round. It’s more a question of will that funding scale up to a level where it starts to make a serious dent in power sector plans to develop more electricity generation based on coal and gas?

Secondly, and related, what are the underlying economics are renewable energy specifically in Africa? Many grid infrastructures are limited, some are imploding, and there is widespread energy poverty, especially in rural areas. The economics of off-grid and local network renewables already look different and more competitive compared (in total cost of ownership terms) to how they appear in the rich countries, before trying to factor in the ever decreasing costs of building and maintaining renewable systems.

And we should not overlook the soft but powerful influence the Paris agreement will have on elite thinking, and overall world view. We are not the only international experts our counterparts in the policy and business elites, or indeed civil society leaders, engage with. The theory of Resource Curse, such as it is, takes concepts like policy capture and rentseeking for granted. Is the Paris agreement a landmark in the erosion of a world view that development only seriously happens through fossil fuels? It was the largest meeting ever of heads of state. These things matter even if they can’t be quantified.

In policy terms, then, we should begin to see concepts like integrated energy plans, which genuinely account for cost benefit across all forms of energy, become a reality for the first time.

The Mining Industry’s use of energy

Wild thought: this could be a bright spot. Oil company attempts to get into renewables have failed in substance. But what about the mining companies? Could they show leadership in expansion of renewable energy for their current operations? Even begin to remodel themselves as “natural resource companies”?

On the nuts and bolts, they are very significant users of energy. In South Africa, 6 percent of total energy consumption; Vale alone accounts for 4% of Brazil’s energy use and even in the United States mining represents 3% of total consumption by industry. And viewed the other way round, energy accounts for 15% of the mining industry’s spend globally. In less developed economies, mining companies often create their own power infrastructures. Malawi’s INDC, for example, quotes emissions figures which explicitly exclude the mining industry, presumably because these are not easily calculated.

Since the Paris agreement counts emissions at location, if mining companies rely exclusively on fossil fuels, that will in short order become part of their conversations with governments. This could add to existing pressure on mining economics, which has already become acute in the past 18 months since commodity prices started dropping. Governments will naturally want companies to pay for their part of national emissions. Companies will point to their already stressed bottom lines.

All the more reason, then, to try and frame this as opportunity rather than threat. Because, even if such emissions are a small proportion of the global total, we are in a new policy world where close attention will be paid to all sizeable emissions. The Paris agreement will affect nearly every mining project for good or ill. Companies, and more broadly industry groupings like the ICMM, will have to engage one way or another.

One thing 2016 should see: a review of the Africa Mining Vision on this issue.

Conclusion

These are some of the linkages between the extractives governance agenda and the Paris Agreement – which should start to play within the next 12 months.

Beyond that, there are bigger and more complex implications within a one- to three-year period, as well as outlier effects, the interlacing of the Paris agreement with the international development agenda, and broader considerations of what we mean by natural resource governance anyway. But this post is already too long!

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COP21 & transparency: the page just got a whole lot bigger

What does the climate change deal signed in Paris mean for transparency in extractive industries? In the short term, relatively little. In the medium to long term however it could change everything: which natural resources are subject to transparency, how far public policy will intervene in the market, and whether we moved to a more holistic paradigm of natural resource management.

The direct crossovers between the transparency agenda and COP21 are tenuous at the moment.

There is some language in the agreement about transparency as it relates to carbon accounting and the huge fund agreed that the rich world will pay to developing countries to help them adapt to climate change. The agreement also talks openly of scaling up renewable energy in Africa, which should, logically, influence the development of new oil and gas projects on the continent.

Still. None of that translates into any change of workflow in the next few weeks or months. Dodd-Frank, the new EITI standard, and the broader agendas of contract transparency, tax justice, and anti-corruption will go forward without direct intersection with the COP21 agreement. For the moment.

In the end, all the effort we as a community put into transparency and good governance around natural resources is because of the potential of these resources to improve people’s lives. Clare Short, the outgoing chair of EITI, emphasises this in every speech she makes, and “extractives for development” is the watchword of many institutions and programs in development agencies.

But COP21 now enshrines at the level of global policy what we already knew. Production of some natural resources – oil gas and coal – has deep costs that have so far remained unaccounted for. Full-cost benefit analysis must include the alternative costs of choosing to develop hydrocarbons. The conventional approach to financial modeling of upstream projects, for example, doesn’t include calculating an internal rate of return for governments and peoples because they haven’t invested any financial capital. But in development terms, finance is only one kind of capital, and often not the most important kind to countries thinking about extractives projects as a key part of their overall economic development. Environmental, social, and above all human capital are more plentiful, more viable and more central to many societies well-being.

It’s true that we don’t currently have methodologically robust indicators for these kinds of capital. What COP21 tells us is that that answer won’t be good enough for very long.

I often think of transparency as drawing by numbers. You try to get the biggest and best number of points on the page you can and figure out which lines to draw in what order to build a picture that makes sense. With the climate change agreement, it’s as though someone just zoomed out and panned to show a full drawing which is much, much bigger. There are other clusters of dots on the page half a table away. There are huge white spaces in between, and right now we have very little idea of how to connect them up. But in the end we know we will have to if we do want natural resources, in Clare’s words, to improve people’s lives.

If you hold that image in your head, a lot of arguments about how COP21 and extractives transparency are two different things seem narrowly technical, and too short term.

For instance, the argument that if COP21 is global and extractive transparency is national, how are they linked?

I think the answer lies in the very structure of the agreement. Many long-time followers of the process say it succeeded this time, when it failed so many times before, because nation states set their own targets and defined the way they will fulfill them. There is no overarching global regulatory framework. But that’s not the same thing at all as saying each country will work on its own commitments in isolation from all its trading partners, neighbors, and other international groupings. It will just be bottom up instead of top down.

We should expect to see the EC, United Nations mechanisms, the WTO, global markets, and the whole international development agenda bent to complex trade-offs  between groups of countries: around which hydrocarbons get produced, with what financial and other development benefits, and above all how we as a global community manage the tension between the short-term reality that we continue to depend on fossil fuels for our way of life, and the fact that we have agreed that we have to act as a global community to end that. A governance agenda that cannot embrace these broader, and messier, set of considerations will become irrelevant.

And it is COP21’s structure of devolved targets and implementation which places data, and analysis of that data, front and central in what is now a global agenda. Last Saturday, transparency stopped being a set of universal values applied, Westphalian style, country-by-country. Its whole is now more than the sum of its parts.

So yes, nothing much is going to change before the winter break. But in the long term everything will change.

And how far away is that long term?

Hype is a valid concept especially in today’s world. We all slog through it  pretty much every time we open our laptops. On the other hand Amara’s law has proved consistently true since the start of the Industrial Age: as human beings we have a systematic bias to overestimate the impact of change in the short term – and underestimate it in the long term.

So it’s not as though we in the transparency world should drop everything we’re doing now. But it would be a mistake to ignore COP21 in our professional lives, and not to start thinking about what it means. Because the whole is now more than the sum of the parts.

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