EITI'S PYRRHIC VALIDATION: CAMEROON WINS,

UNCLAS SECTION 01 OF 02 YAOUNDE 000433

SENSITIVE
SIPDIS

STATE FOR AF/C
STATE ALSO FOR EEB/ESC DAVID HENRY AND STEVE GALLOGLY
COMMERCE FOR ITA BURRESS

E.O. 12958: N/A
TAGS: KCOR PREL PGOV EPET CM
SUBJECT: EITI'S PYRRHIC VALIDATION: CAMEROON WINS,
TRANSPARENCY LOSES


1. (SBU) Summary. Predicting that the Extractive
Industries Transparency Initiative (EITI) Secretariat will
validate the Government of Cameroon's (GRC) participation in
the EITI process in early 2010, Cameroonian civil society
leaders warn that the GRC's gain--an unmerited publicity
windfall--could prove costly to the promise of the EITI
process. The Embassy hosted an April 30 meeting with civil
society leaders working on governance and transparency issues
in Cameroon. Although the GRC has technically complied with
the letter of EITI guidelines, which the civil society
leaders criticized as setting so low a threshold as to be
meaningless, there has been no significant change in the
manner in which Cameroon's oil, gas and mining revenues are
reported and negligible progress towards the EITI's stated
goal: "to strengthen governance by improving transparency and
accountability in the extractive sector." End summary.

EITI: So Transparent,
No One Knows It's There
--------------


2. (SBU) The Embassy invited a dozen Cameroonian civil
society leaders working on governance and corruption, some of
whom have been involved in the EITI process in Cameroon, to
discuss Cameroon's participation in the EITI process and its
impact on transparency and citizen oversight of revenues. In
2005, the GRC announced its intention to participate in the
EITI process, which had been launched by former British Prime
Minister Tony Blair in 2002 as an ambitious effort to improve
governance in resource-rich countries by requiring
disclosure--by the private companies and the recipient
governments--of all payments derived from oil, gas and
mineral exploitation. Among the civil society leaders who
met at the Embassy, there was consensus that, despite the
publication of some previously unseen information regarding
oil and gas revenues, the Cameroonian public remained
universally uninformed about both EITI and the management of
Cameroon's extractive industries.

Transparently Not Transparent
--------------


3. (SBU) Despite the impression given by the GRC and some
outside observers that the GRC is a strong participant in the
EITI process, the civil society representatives argued that
there has been no meaningful change in the culture of secrecy
that has traditionally governed Cameroon's oil and gas
sectors. EITI has presented an unprecedented opportunity for
the GRC to speak about its oil and gas revenues--a subject
that was taboo even for GRC officials until the start of the
EITI process--but the GRC has unilaterally dictated the terms
of the conversation and released scant information. The
Publish What You Pay coalition, having worked on EITI in
Cameroon for four years, just received its first copy of a
contract for the extractive industries in Cameroon in May
2009, and did so only through a third party, not the GRC or
the EITI process. To the extent Cameroon is complying with
EITI's criteria, argued the civil society representatives, it
is evidence that EITI's standards are so low as to be
meaningless.

Abiding the Letter,
Undermining the Spirit
--------------


4. (SBU) To be compliant with EITI principles, for example,
a country must establish an EITI committee that includes
representatives from civil society, but there are reportedly
no standards for how such a committee must function. In
Cameroon, the GRC unilaterally selected three organizations
(representing each of the major religious faiths in Cameroon)
to be the civil society representation. When the Publish
What You Pay network protested, the GRC agreed to add three
more civil society representatives (but kept its own
hand-picked three).


5. (SBU) In a strategy of co-optation that it has used
elsewhere, the GRC held an open meeting for civil society to
choose its representatives. Any organization that appeared
was given 50,000 CFA (about $100) and the assembled
organizations were told to vote among themselves for who

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would sit on the EITI board. The GRC's cash incentives
succeeded in perverting the selection process, skewing the
motivation for candidates and their supporters. Until
recently, the members of the EITI committee received 200,000
CFA (about $400) for each meeting of the EITI committee; the
amount was recently increased to 300,000 CFA (about $600) for
each 2-3 hour meeting, with the Minister of Finance promising
to increase the per diem to 400,000 CFA "after validation."

Doing the Bare Minimum
--------------


6. (SBU) The EITI process grants participating governments
the option to expand the scope of their engagement, but the
GRC has repeatedly decided to limit its participation to the
bare minimum required under the program. Rather than release
the revenue data in a disaggregated report (broken down
company-by-company) as it is collected by the independent
conciliator who compiles the report, the GRC-controlled EITI
committee has decided to limit the transparency of the data
by requiring the conciliator to aggregate it for release.
This prevents analysts from comparing the terms and pricing
of the various contracts. In a similar display of limited
buy-in to the concept of increasing revenue transparency, the
committee has decided not to include the forestry sector in
the EITI process.

Acknowledging EITI's Limitations
--------------


7. (SBU) Even EITI's critics recognize that, as a voluntary
program, the EITI must strike a delicate balance in order to
attract participation while remaining effective. They also
admitted that many had unreasonably high expectations for
EITI, especially to the extent EITI would provide visibility
beyond mere revenues and into state expenditures.
Additionally, even if the GRC had displayed a greater
willingness to share information, civil society organizations
lack the capacity to usefully exploit many of the complicated
elements of oil and gas contracts. Even some of the EITI
experts professed they were often at a loss to decipher the
complexities of the extractive industries sector.

Comment: EITI's Pyrrhic Victory
is a Loss for Transparency
--------------


8. (SBU) There is a real danger that the credibility of
EITI--and similar programs--will be undermined if EITI
validation is perceived as a rubber-stamp for the GRC's
failure to institute meaningful reform of the accounting for
its extractive industry revenues. Many Cameroonians perceive
that international companies have colluded with corrupt
Cameroonian leaders to fleece the nation of its natural
resources and that whatever revenues the GRC received have
been stolen and stashed away in international banks. EITI
was conceived and launched expressly to address this
phenomenon. EITI has provided a welcome forum for
unprecedented conversations between the GRC and some civil
society representatives, but those conversations have been
largely one-sided and borne negligible results. Four years
into Cameroon's participation, EITI has not succeeded in
fostering improved transparency or accountability for
government revenues from the oil, gas and mining sectors in
any meaningful way. The EITI Secretariat's expected
validation of the unfulfilled promise of EITI, even if
inevitable, will only serve to further disillusion the
Cameroonian public.


9. (U) Post is engaging with the World Bank (which is
planning a regional EITI conference in Douala in early June)
and other donors to discuss what might be done to make the
most of Cameroon's participation in EITI.
GARVEY