Alliance Notes:Extractives coffee chat, TMT circular economy

Monday, October 19, 2020

                          Alliance Events, 10/19/20

 

New Research

 

Fiscal Governance Brief on Nigeria

The Alliance has published a Fiscal Governance Brief on Nigeria. Fiscal Governance Briefs take stock of a country’s fiscal transparency and public financial management. We begin at the central government level, then proceed to other parts of the public sector, including natural resource state-owned companies. All readers have access to the front page of the report. Alliance members may access the entire report. Please click here to request membership information.

In recent years, Nigeria has undertaken significant reforms to improve transparency and reduce corruption. However, of fourteen commitments made in the 2017 National Action Plan, none was deemed completed by the OGP in 2020. Nigeria lacks a fiscal transparency code specifying roles for ministries or other stakeholders in budget drafting. Many budget documents are released infrequently, late, or with incomplete information. Issues of transparency and corruption in government budgeting rank high among the concerns of Nigeria’s population, particularly with regards to the petroleum sector. Existing regulations are laden with ambiguities and contradictions that have blurred the roles and responsibilities of various agencies. The extractives sector is characterized by a lack of clarity in oversight structures, overlapping roles and responsibilities, leading to data discrepancies and a lack of accountability.

 

Fiscal Governance Brief on Kenya

The Alliance has also published a Fiscal Governance Brief on Kenya. In recent years, Kenya has also made significant progress in improving its fiscal disclosure. In 2012, a new Public Financial Management Law was enacted, aligning Kenya's legal framework with the IMF's best practice standards. This was followed in 2013 with a review of autonomous agencies and state enterprises with the intention of boosting oversight. Since then, the timeliness of annual reports and coverage across institutions has increased. The track record of fiscal forecasting and budgeting is strong. On the other hand, fiscal risk management -- particularly quantitative stress-testing -- shows mixed results. One area that could also show improvement is in the transition to accrual accounting.

 

Issue Brief on Tailings 

The Alliance has published an Issue Brief on Tailings Management in the extractive industries. This is the latest in a series looking into sustainability issues in the corporate sector relevant for emerging markets investors and follows our Brief on Community Consent published last month. 

Major tailings accidents in recent years such as at Samarco and Brumadinho in Brazil have awoken investors to risks posed by the long-term storage of mining waste. With an estimated 3500 tailings storage facilities worldwide, and more being built every year, accidents are likely to continue. We provide a primer on tailings risk in emerging markets, discuss the new Global Industry Standard on Tailings Management and assess the new Global Tailings Portal dataset as well as the Responsible Mining Index to identify which countries and companies have the greatest exposure to tailings risk. Chile, Russia, South Africa, Peru, Brazil, and Poland are the most exposed EM countries to tailings. Top exposed EM stocks are Vale, Anglogold Ashanti, Evraz, Severstal, Sibanye-Stillwater, Phosagro, Antofagasta, and KGHM. We suggest ways investors can assess tailings risk in their portfolios and questions to ask management when engaging on this issue. Access the full Issue Brief here.

Upcoming Events

 

Extractives Call

** Monthly Coffee Chat on Responsible Mining/Energy **

Thursday 22 October, 10am EDT / 3pm UK 

Topic: Community Consent in Latin America

With Guillen Calvo of Insuco

Hosted by Remi Piet and Andrew Howell, Emerging Markets Investors Alliance

Register in advance here

Hi -- We are launching a series of monthly discussions on sustainability issues in the extractive industries, curated by Remi Piet of Embellie Advisory who is serving as advisor to the Alliance. These are designed to touch on ESG topics we have explored through our extractive industries working group webinars. 

Our first chat will take place next Thursday featuring Guillen Calvo of Insuco, an independent consulting firm helping private, public, and civil society stakeholders understand and manage social issues around extractives projects. Guillen has worked extensively with communities in Latin America affected by projects including those of Anglogold Ashanti, Continental Gold, and Lundin Petroleum. Topics:

  • When talking of "community consent", which communities should be included?
  • How to manage and share information between the company and community? 
  • How to create sustainable value for communities and WITH communities?
  • Which tools and processes allow engagement with communities and foster an indigenous bottom-up strategy? 

As discussed in our recent Issue Brief on community consent, recent years have brought an uptick in conflicts between communities and mining companies, with some incidence of violence, highlighting difficulties in securing a license to operate for extractive projects. Guillen will touch on a range of approaches designed together with communities that have been implemented throughout the lifecycle of extractive projects with the aim of supporting multidimensional development.

 

Register in advance here

 

After registering, you will receive a confirmation email containing information about joining the webinar.

 

Guillen's bio: Regional director for Latin America and the Caribbean of the Insuco consulting firm and president of Diversity & Development international NGO. Agro-economist and geographer from the Sorbonne University in Paris, Guillén has worked for international organizations (UNESCO, Bioversity International, World Bank) on the design and implementation of development projects in more than 15 countries and the management of intergovernmental platforms, linking scientific research and policy decision-making. He is an expert in sustainability and the territorial approach to Corporate Social Responsibility, he has worked for the last 10 years in Latin America and Africa on defining innovative models of stakeholder engagement and collective action processes between important private companies, communities, and government in different world-class projects. He is a lecturer at several universities in Latin America and is a member of the research line on Sustainable Territorial Development at the Universidad del Externado in Colombia. He has published several articles on the themes of conflict transformation, multi-stakeholder dialogue, and territorial approach of sustainability.

   

TMT Program Presentation

We are pleased to announce that Stephanie Smith, Executive Director, StEP Initiative will be the next speaker in our Tech/Media/Telecom Program on October 28 at 10am EDT.  Stephanie will be joined by Dr. Deepali Sinha Khetriwal, Managing Director, Sofies International. Both speakers will give us a bottoms up overview of global program models, legislation, and the role of their organizations in their presentation ESG, Circular Economy and E-Waste. 

If you would like to attend the call, please register in advance here.  Please note that the call is exclusive to emerging markets investment professionals.

Elisabeth Smith leads the StEP Initiative, and she also heads the Dismantling- and Recycling-Centre (DRZ) in Vienna, a socio-economic facility for the treatment of e-waste. Elisabeth is an environmental scientist with a keen interest in e-waste management and in-depth knowledge of the subject on an international level. Before her current engagements, Elisabeth worked for the United Nations Industrial Development Organization (UNIDO) where she focused on developing and implementing e-waste management projects in East Africa and Latin America.

Dr. Khetriwal is the Managing Director of Sofies India, as well as a senior consultant in the e-waste domain, working with international organizations and multinational companies on compliance, pilot projects, and system setup. She is an international expert on e-waste management and has published several papers in peer-reviewed journals on the topic. At United Nations University, she was instrumental in setting up the capacity development activities of the StEPInitiative, a UN-supported forum on the e-waste problem. She has also authored several research reports for the European Commission and as part of Horizon 2020 projects linked to the topic of resource and recycling aspects of e-waste. She has also worked as an expert consultant on internationally funded development projects for the UNEP, the World Bank, and the EMPA (the Swiss Federal Laboratories for Materials Science and Technology). Currently based in Mumbai, she holds a Ph.D. from the University of St. Gallen, Switzerland.

 

Alliance ESG Conference in December: Save the Date!

Here is an early announcement for the Alliance’s 4th annual EM ESG Conference, which goes virtual December 9-10 2020, with host AllianceBernstein and sponsors JP Morgan, and Sustainalytics.  The Alliance welcomes investors, issuers, and policy experts to the only conference exclusively focused on ESG in emerging markets.  Day 1 consists of panels and discussions between policy experts, issuers, and investors on top ESG themes dominating investment decisions today.  For Day 2 we will have small group meetings between investors and corporates focused exclusively on ESG issues as well as fireside chats on EM ESG topics. Registration details to follow. 

                                         The Emerging Markets Investors Alliance is a 501(c)(3) non-profit organization
that enables institutional emerging market investors to support good governance, promote sustainable development, and improve  investment performance in the governments and companies in which they invest.

                                                                                                        www.eminvestorsalliance.org