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Jakarta. Indonesia has formally requested to join the Extractive Industry Transparency Initiative in a bid to combat corruption in the oil, gas, mining and logging sectors.

The Norway-based initiative, sponsored by the World Bank, would put Indonesia on close international watch, ensuring all state revenue generated by the extractive industry is open for public scrutiny.

Muhammad Husen, assistant deputy for oil at the Coordinating Ministry for Economic Affairs, said on Monday that the request was signed by the coordinating minister, Hatta Rajasa, last week and sent to the initiative’s headquarters in Oslo, along with a two-year working plan.

“Adopting the EITI is one of the strategic priorities of the ministry,” Husen told the Jakarta Globe. “We wish to create greater transparency in the extractive industry because people have always claimed state revenue is lost in this sector.

“This is the first step toward identifying areas prone to corruption and manipulation. The EITI ensures all state revenue generated by the extractive industry will be open to scrutiny.”

Husen said the EITI board would meet in Brussels on Nov. 8, when it would decide on Jakarta’s application.

David Brown, Indonesia’s representative to the EITI, said resources companies would have to declare their revenue once Indonesia adopted the initiative.

An independent team of experts would then compare information provided from these resource companies with those supplied by the government.

Rezki Sri Wibowo, from Transparency International Indonesia, said although the program was not aimed at Indonesia’s oil subsidies, their use would be better monitored if the country adopted the initiative.

“Right now we don’t know the base price for subsidized oil,” he said. “I think the retail price of subsidized fuel would decrease because for once we would know for sure how state money is being spent.”

Rezki said Indonesia’s commitment would bring more investment from foreign companies. “Right now, some companies are reluctant to invest in a country with little transparency in the industry,” he said.

Husen said that once Indonesia’s participation was approved, four provinces would be the model for the initiative’s adoption – Riau, East Java, East Kalimantan and Papua.

“This will be the first stage,” he said. “By the end of our two- year working plan, hopefully the whole of Indonesia will have adopted the initiative.

“We are formulating the template of the financial reports and we shall appoint an independent auditor for dispute resolution should there be discrepancies between data provided by the government and private companies.”

The Revenue Watch Institute said the financial reports required under the initiative would make it easier for the government to prevent tax evasion and ensure more efficient monitoring of government spending of money flowing in from natural resource companies.