Easing the collection of high quality beneficial ownership information in resource rich countries

It has been four years since the Extractive Industries Transparency Initiative (EITI) introduced the requirement that governments must collect and publish information on beneficial owners (people who significantly control the activities of mining and extractives companies and/or benefit from them financially). With the EITI’s experience supporting countries, and in partnership with data experts at Open Ownership (OO), the International Secretariat revisited the model declaration form. The result is a form for high quality data collection and guidance for form designers and administrators. It complements the existing form for basic data collection.

The new model declaration form for high quality data collection allows governments to collect robust, structured, and unambiguous information on the legal owners as well as the beneficial owners of companies. It is in Excel format and has some basic navigation within it. The model declaration form can be used to build an online form. An existing online, Excel, or Word-based data collection form can be compared with the model declaration form for improvement.

Collecting structured information

The higher the quality of the data, the more you can do with it.

1. When collecting information through an online form, the information is stored in a table. The stored information can be cross-checked, and users can view, analyse, and visualise the information easily.
   For example, to check if there are any persons who hold political office in a country and if those persons are beneficial owners of an extractive company (deemed a conflict of interest in many countries), a table of beneficial owners will be needed. A list of the beneficial owners of companies holding licences will need to be compared with a list of parliamentarians and ministers in the country including, politically exposed persons (PEPs). The table of beneficial owners would need to include first and last names, personal ID numbers, and the company interests, which would be compared to a list of office holders and their family members (for example, from public official asset declarations). Collecting this information through an online form would allow the first list to be easily produced.
   The EITI with Directorio Legislativo and support from OO developed a tool to flag potential conflicts of interest in extractives companies in Colombia. The biggest challenge was getting the data, and re-formatting it so that the datasets could be compared. Using the model declaration form would mean much less data cleaning.
2. Forms can be “pre-populated” with information that a government already has on a company. This makes filling in the form much easier and avoids producing duplicate information.
   Using pre-filled online forms with existing data such as company ID numbers, addresses, directors, and legal owners reduces the administrative burden on companies, and will make it more likely that information is submitted and updated regularly.
3. Detailed information can be shared across government agencies
   Information stored in a database can be easily shared to other agencies through interfaces such as personal identification numbers, social security numbers, as well as company identification numbers. This data can be accessed across governments.
   See: Louise Crow’s talk at 07:24 from mySociety on connecting the government’s procurement system with the Companies House in the UK.
4. Information can be shared with other jurisdictions and the public to fight tax avoidance, money laundering, and conflicts of interest.
   As the Panama papers and the more recent FinCEN files have shown, being able to access information about beneficial owners is key to fighting tax avoidance and money laundering, a multi-billion dollar problem worldwide. When building a BO form, referencing this model declaration form will help to share standardised data with other jurisdictions, publish through an open register and publish in accordance with the Beneficial Ownership Data Standard (BODS). That way, everyone, including companies that are performing due diligence, can check who the persons behind a company are.
   See: Peter’s talk at 19:50 on how banks are using the BO information in Denmark.
   See: 1:07:46 Friedrich Lindenberg’s talk (OCCRP) on sharing ownership information in open data format.
5. Existing tools can be used for visualising BO data
   Software programmes can easily turn structured data into basic visualisations, automatically generating the relationships of even complex ownership structures. Besides “connecting the dots” between the company and its legal and beneficial owners, such a visualisation could also show when one person holds interests in several companies.
   See OO’s resources on data visualisation for data based on the BODS. https://www.openownership.org/news/launching-our-visualisation-library-for-beneficial-ownership-data-standard-data/
   See Dun & Bradstreet on visualising data on beneficial owners:https://www.youtube.com/watch?v=CAHvIJeRbD4&t=2863s
6. The interest that government, or foreign governments, hold in extractives projects can be clearly shown.
   In many countries, governments hold an interest in extractive companies. This interest is sometimes held through intermediary companies, sometimes listed, and sometimes private. The model declaration form asks explicitly for state participation, regardless of the level of ownership, as well as the jurisdiction of that government.

Checking an existing form

The model declaration form can be used to check for best practice for logic and field validation.

1. Fields have been added to capture data that is useful when linking up to other databases or verifying information, such as company and person identification numbers and URLs to regulatory filings.
2. The form is built on a solid logic, which has been tried and tested with different complex examples. You can test your own form’s logic with this one.
3. There are examples for administrative tracking for collected data and its quality. Reviewing the collected data and making a statement about its robustness and comprehensiveness is a requirement of the EITI Standard.

If you are interested in using this form, please do not hesitate to get in touch with EITI or the OO helpdesk.

This template is the result of a collaboration between the EITI and Open Ownership.

Learn more on why form is king: New tool to shed light on the real owners of extractive companies.