A Pattiro workshop in Bojonegoro, Indonesia, 2008. Photo ©OSI.

Each night for a month, messages appeared on the cell phone of a community activist in one of Indonesia’s sprawling urban areas. The messages were consistent, the threat unsubtle: “If you want to live in this city, don’t talk about budgets.” Next came “informal conversations” with the local police, then interrogations.

It is dangerous work to empower people, to provide them with information about malfeasance and the tools they need to collect official documents, to show students and housewives how to discover whether government officials, some local, some national, are mismanaging and sometimes skimming massive amounts of revenue paid by foreign companies to extract oil, minerals, and other natural resources. In many cases local people doing the tedious, risky grassroots work have benefitted significantly from support provided by the Open Society Institute and its sister organization, the Revenue Watch Institute, which coordinates and leads the Soros foundation network’s efforts to promote transparency and accountability in resource-rich countries.

Ilham Cendekia works for PATTIRO, the Center for Regional Information and Studies, a grantee of the OSI-supported Tifa Foundation in Indonesia. PATTIRO has trained local advocates, including the community activist who received the threatening messages, to teach people how to demand access to information about budgets, government revenues, and the dispersal of revenues from natural resource extraction, including payments made by huge oil and mining companies. “It takes time to strengthen them and build their confidence,” Cendekia says. “We direct them to the local governments, to confront them. We find champions within the government.”

The importance of PATTIRO and the multitude of other civil society organizations working to bring genuine transparency and accountability to resource-rich countries can hardly be overstated. Behind the massive violence and rabid corruption that are ravaging so much of the world lies a driving force: the mismanagement and theft of revenues produced by the extraction of oil, diamonds, metals, and other natural resources bound mostly for the developed world. In West African states the cash comes mostly from blood diamonds and timber. In the Democratic Republic of Congo, metals and diamonds. In Equatorial Guinea, Nigeria, Chad, Iraq, and so many other countries, oil.

The Revenue Watch Institute’s mission is to help introduce and strengthen transparency and accountability in resource-rich countries around the globe. The institute helps provide citizens with the information, training, networks, and funding they need to become more effective monitors of government revenues and expenditures. In addition to civil society organizations in the exporting and importing countries, the Revenue Watch Institute engages government officials in countries that export and import resources as well as board members and managers of companies that pay governments to extract these resources; it also engages officials at international organizations and financial institutions as well as international watchdog organizations like London-based Global Witness.

Two of Revenue Watch Institute’s main partners are pillars of the campaign for transparency and accountability in resource-rich countries. The first is the Extractive Industries Transparency Initiative (EITI), a coalition of governments, companies, civil society groups, investors, and international organizations that promotes transparency and accountability by the governments that receive revenues for extraction of natural resources. The second is Publish What You Pay, a coalition of more than 300 local and international nongovernmental organizations from around the world that are working to require oil, gas, and mining companies to disclose everything they pay to governments for the extraction of natural resources and thereby help citizens of resource-rich developing countries hold their governments accountable for the management of these revenues.

In August 2007, the Revenue Watch Institute helped organize the first ever EITI capacity-building workshop for 60 regional civil society organizations from Australia, Cambodia, China, Indonesia, Timor-Leste, Papua New Guinea, and the Philippines. The Revenue Watch Institute was also planning pilot projects to assist sub-national governments and local civil society organizations in Indonesia to promote the sound management of expected new flows of revenue from oil, gas, and mining that will be passed from the central government in Jakarta to the country’s provinces. Elsewhere, the Revenue Watch Institute’s network of partners continued in 2007 to demonstrate signs of an increasing willingness to work together on their own initiative to promote EITI and its goals.

Media and letter-writing campaigns by the Publish What You Pay coalition helped produce a breakthrough in 2007, when the International Accounting Standards Board agreed to institute an international reporting standard for payments companies in the extractive industries make to governments. The new standard will require the resource-extracting companies to report payments to governments on a country-by-country rather than a lump-sum basis. This new requirement will allow civil society activists, for example, to compare the companies’ reports of these payments with the respective governments’ reports of revenues. Promulgation of this new standard may take two to three years, but when it is issued, the standard will automatically become law in 50 countries, excluding the United States and Canada.

In the near term, the stiffest challenge facing the Revenue Watch Institute and its partners in the struggle to alleviate the resource curse is to prevent backsliding by the G-8 countries on their commitments to press for revenue transparency as a part of their efforts to secure oil, gas, and mineral concessions. During 2007, for example, the European Union failed to mention good governance and transparency in its energy strategy. The United States hinted that it might support Angola, a notorious resource-cursed country, to become vice-chair of the Kimberley Process Certification Scheme, the process developed in 2003 to certify that rough diamonds have originated in conflict-free areas.