President of Senegal, Macky Sall: Opening address at the beneficial ownership conference
Opening address by His Excellency Mr Macky Sall, President of the Republic of Senegal, at the Africa Conference on Beneficial Ownership Transparency: Opening Up Ownership: Africa - Harnessing the potential of the extractive sector.
Held in Dakar, Senegal, at King Fahd Palace, 31 October 2018.
Your Excellencies, Heads of State,
Mr Chair of the EITI International Board,
Mr President of the National Assembly,
Mr Chair of the High Council of Local Authorities,
Madam Chair of the Economic, Social and Environmental Council,
Minister, Mr President of the EITI National Committee,
Mr Chair of the WAEMU Commission,
Madam Operations Manager at the World Bank in Senegal,
Mr Acting Executive Director of the EITI International Secretariat,
Members of the EITI Board,
Representatives of civil society organisations,
Representatives of mining, oil and gas companies,
Ladies and gentlemen, distinguished participants.
I would first like to welcome to Senegal the delegations from EITI implementing countries, as well as those from invited countries, that have come to share their experiences of implementing beneficial ownership transparency in relation to mining, oil and gas corporations.
It is with immense pleasure that I am addressing you at this Africa Conference on Beneficial Ownership Transparency, jointly organised by the Government of Senegal and EITI International, on the theme of "Opening Up Ownership: Africa - Harnessing the potential of the extractive sector".
Our country is delighted to be hosting both the EITI International Board Meeting, which is being held in Africa for the first time, and the Africa Conference on Beneficial Ownership Transparency.
Ladies and gentlemen,
Since my assumption of the office of President in 2012, I have made the transparent governance of natural resources a Government priority. This vision soon became a reality, in particular when the law on transparency in the management of public finances was passed in 2012 and when, in 2013, Senegal signed up to the EITI Standard, a trusted international instrument to evaluate how States manage their mining, oil and gas resources.
In the same vein, I created the National Office against Fraud and Corruption, OFNAC, an independent administrative authority granted considerable investigative powers, full jurisdiction and the power to refer matters directly to the courts, with a view to strengthening the institutional framework for combatting fraud and corruption.
This resulted in a series of comprehensive reforms to improve the quality of governance in the extractive industries sector.
On my recommendation, the Constitution was revised by referendum in March 2016 to introduce the people's right to ownership of natural resources and the transparent management of these resources. Indeed, Article 25-1 of the Constitution states: - The natural resources belong to the people. They are to be used to improve their living conditions.
The exploitation and management of natural resources should be transparent and carried out in such a way as to generate economic growth, promote the well-being of the population as a whole and be ecologically sustainable. Likewise, the mining code was revised in November 2016 to incorporate provisions relating to the EITI Principles and Requirements and to conflicts of interest.
The petroleum code is also being revised to take better account of transparency requirements and better monitor oil and gas projects. Similarly, I will very shortly submit a draft framework law to the National Assembly on sharing the revenue generated by future hydrocarbon operations, as well as a draft law on local content.
I am committed to making all oil and mining contracts public, even though this is not an EITI requirement.
Furthermore, in July 2018 Senegal joined the Open Government Partnership which works for greater transparency in public policy and to increase citizen involvement in decision-making processes.
I am committed, as is my Government, to permanently establishing the transparent management of natural resources and public accountability.
And so, the EITI Board, through its decision of May 2018 to award Senegal the highest number of 'Satisfactory Progress' scores, is recognising the efforts our country has made to exceed the Requirements of the EITI Standard in terms of contract disclosure, social expenditures, follow up on recommendations and the impact of public debate. Senegal is the first country in Africa, and the fourth in the world to achieve such a satisfactory progress score.
Ladies and gentlemen,
The conference that brings us together this afternoon is of the utmost importance. Indeed, knowing the beneficial owners of companies in the extractive sector is a pivotal challenge for all EITI-implementing countries and beyond, for the whole world in terms of mobilising public resources. Beneficial ownership transparency makes it possible to combat tax evasion, corruption, conflicts of interest and illicit financial flows, as well as to improve the business climate.
Consequently, Requirement 2.5 of the EITI Standard requires implementing States to set up, as of 1 January 2020, a publicly available register of the beneficial owners of the companies that bid for, operate or invest in extractive assets, including the identities of their beneficial owners, their levels of ownership and details about how this ownership or control is exerted over the companies.
In order to comply with this Requirement under the EITI Standard, Senegal has adopted a definition of beneficial ownership on the basis of WAEMU Directive No. 02/2015 against money laundering and terrorist financing, which was adopted into national law by the Anti-Money-Laundering Act 2018-03, of 23 February 2018.
This Act addresses the concept of beneficial ownership in terms of the "beneficial owner", defined as "the natural person, or persons, who, ultimately, own(s) or controls a corporate entity and/or the natural person on whose behalf a transaction is carried out. Also included in this definition are persons who, ultimately, exercise effective control over a legal person or legal entity..."
Senegal, having drawn up its roadmap, published a diagnostic report on the implementation of effective ownership in March 2017.
Senegal had already committed to set up a publicly available register to identify the beneficial owners of companies at the Anti-Corruption Summit in London in May 2016.
We have now identified the Trade and Personal Property Credit Register, under the authority of the Ministry of Justice, as the institutional structure where information on the identity of the beneficial owners of oil, gas and mining companies will be collected. A publicly available register will be established and work on this is already underway. Furthermore, a draft decree amending Decree No. 76-780 of 23 July 1976 on the Trade and Personal Property Credit Register is being developed by the National EITI Committee and the Ministry of Justice to oversee the disclosure of beneficial ownership in terms of data collection, access to information, the disclosure of politically exposed persons, and so on.
All this demonstrates the commitment of the Government of Senegal to pursue implementation of the EITI and its focus on the disclosure of beneficial owners.
I urge the Government to formalise the collaborative framework between the National EITI Committee and the Ministry of Justice, by setting up an official national platform for the collection of data on beneficial owners which involves all competent ministries and State agencies.
Ladies and gentlemen,
Africa must commit to establishing beneficial ownership. According to estimates, developing countries lose 1 trillion US dollars every year to corruption and illegal transactions, many of which involve anonymous companies. There is clear evidence that the two major obstacles to the effective mobilisation of domestic revenues from natural resources are illicit financial flows and corruption.
According to the 2015 report of the High-Level Panel on Illicit Financial Flows from Africa, the African continent loses between 50 and 65 billion dollars every year as a result of illicit financial flows. And the recent report on governance in Africa by the Economic Commission for Africa, published in 2018, states that the extractive sector is the most exposed.
This conference on beneficial ownership in Africa is an opportunity for African countries to share experiences in relation to legal frameworks and public registers that aim to collect and publish information on the beneficial owners of extractive-sector companies.
It should not be forgotten that, at the African Union Summit in Nouakchott in July 2018, the African Heads of State expressed their commitment, through the African Union Anti-Corruption Declaration, to combat corruption and illicit financial flows through measures such as creating beneficial ownership registers, disclosing country-specific financial information, participating in automatic tax information exchange agreements and supporting the strengthening of tax authorities through the work of the African Tax Administration Forum. We have also highlighted the need to facilitate the detection of corruption in defence and procurement contracts, the exploitation of natural resources and all transactions linked to extractive industries, as well as to the private sector and education as priority areas.
I, therefore, encourage all EITI-implementing countries to take concrete steps in the coming months to disclose the beneficial ownership of companies in the oil, mining and gas sector by 2020.
Ladies and gentlemen,
I would not be able to conclude without thanking the technical and financial partners that support the EITI. And so, I would like to acknowledge the support of Denmark, France and the United Kingdom for the organisation of this conference.
Furthermore, speaking both personally and on behalf of Senegal, I would like to congratulate the EITI International Board for this excellent initiative to promote better governance of natural resources.
That said, I declare the Africa Conference on Beneficial Ownership Transparency: Opening Up Ownership: Africa - Harnessing the potential of the extractive sector open and wish you the best of success in your endeavours.
Thank you for your kind attention.