Dear friends of La’o Hamutuk,
It is very early to judge whether EITI is going to ensure the country
isbenefited from Petroleum, but I believe it is a good starting point to
move things up in the right direction to ensure that the country is going to
be prevented of falling into the trap of Resource Curse.
A luta Continua
National Climate Change Consultant
email@example.com / firstname.lastname@example.org
+670 731 8653 / +670 750 9504
Press Release from La’o Hamutuk, 2 July 2010
EITI-COMPLIANCE IS NOT ENOUGH TO ENSURE THAT TIMOR-LESTE BENEFITS FROM
The Extractive Industries Transparency Initiative (EITI) Secretariat in
Oslo, Norway just announced that Timor-Leste became the third EITI-Compliant
nation on 1 July 2010. La’o Hamutuk greatly appreciates the hard work of the
state of Timor-Leste from 2003 until today to achieve transparency in
managing Timor-Leste’s petroleum.
However, we continue to point out that transparency alone cannot ensure that
petroleum will benefit the people of this country. The state of Timor-Leste,
especially the Government, Parliament, oil companies, civil society and
other sovereign agencies, should not feel satisfied with the victory of
becoming the first EITI-compliant country in this region. The state also
needs policies to prudently manage and allocate petroleum revenues, taking
care that they sustainability benefit both current and future generations.
Currently, Timor-Leste is the most petroleum-revenue-dependent country in
the world, as well as in this region. 97% of our annual state revenues come
from oil and gas. For example, right now the Government, through the
mid-year adjustment of the 2010 State Budget, wants to take money totaling
$811 million from the Petroleum Fund, far more than the Estimated
Sustainable Income (ESI, 3%) which the Petroleum Fund Law says.
If this State, especially Government and Parliament, allocates Petroleum
Fund money only to non-productive sectors, this will not help develop our
non-oil economy or improve people’s lives in rural areas. Timor-Leste will
suffer a big defeat, which will impact us when oil revenues decline or when
Timor-Leste’s oil is used up.
The biggest advantage to Timor-Leste becoming EITI-compliant, as well as
complying with the Petroleum Fund Law and the Budget and Financial
Management Law, will help provide that revenues from our petroleum resources
are used for the long-term interests of Timor-Leste’s people, to provide
benefits both today and tomorrow, to avoid the resource curse in
Finally, we recommend that the state of Timor-Leste, which is using a model
of transparency in the petroleum sector, should apply similar guidelines to
transparency in sectors such as procurement, autonomous agencies, and other
areas, especially in reports of expenditures and revenues.
La’o Hamutuk is a non-governmental organization which monitors and analyzes
the process of development in Timor-Leste with the goals of avoiding the
resource curse, struggling for economic and social justice, promoting food
sovereignty, equality, justice, good governance and democracy. We distribute
our information through our Bulletin, radio program, public meetings and