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The NWT Heritage Fund is currently managed by the GNWT Department of Finance. GNWT
Legislation states that the Financial Management Board is authorized to act as trustee of the Fund
(GNWT 2012c). The Financial Management Board, composed of Cabinet Ministers and Chaired by
the Minister of Finance, is responsible for monitoring the performance of the Heritage Fund and,
on an annual basis, for directing and supervising the Secretary of the Financial Management Board.
The Secretary, a member of the public service, is responsible for carrying the administration and
maintenance of the Heritage Fund as directed by the Board.
The Need for Clear Rules and Independent Oversight of Natural Resource Funds
The current structure of the NWT Heritage Fund’s governance omits an independent layer of
oversight and lacks third party separation from the government. However, best practice in fund
management suggests that a separate operational management entity, with full delegation to manage
investments under a strict mandate, be appointed (Bauer 2014a). Given the small amount of
revenues deposited into the Fund to date (as of February 2014), a separate independent oversight
entity may be costly to implement at this time, though the Supervisory Council could be established
to meet the growing size and importance of the fund as royalties accumulate (such as in a five-year
plan). In the immediate term, a minimum of two additional independent observer members should
be appointed in order to provide independent assurance: one to the Financial Management Board
and one to the Secretariat.
Some of the world’s most successful natural resource funds, including Norway, Chile, and Alaska,
have independent oversight bodies. Chile, Ghana, and Chad all provide excellent examples of
oversight bodies, which can inform building an oversight body in the NWT. For example, in Chile, a
law established a new Advisory Financial Committee for Fiscal Responsibility Funds (AFCFRF) to
advise the Minister of Finance on investment regulations and decisions related to Chile’s two
sovereign wealth funds (Schmidt-Hebbel, 2012). The Ministry of Finance selects six independent
members, usually academics, from the local community of macroeconomists and financial experts;
their overlapping tenure is two years. The Secretariat of the AFCFRF is part of the Ministry of
Finance. AFCFRF members discuss financial developments and their implications for the
performance of the funds, evaluate fund management, and issue non-binding recommendations
about fund investment policy and regulation to the Ministry of Finance. AFCFRF publishes an
annual report on the funds’ financial results and the Committee’s investment policy
recommendations to the Minister. Their report is separate from the Ministry of Finance’s report. In
addition, the fund is externally audited to international standards, with reports available to the public
(Schmidt-Hebbel, 2012).
Another relevant model can be found in Ghana. In 2011 the Parliament of Ghana passed the
Petroleum Revenue Management Bill, which established a Public Interest and Accountability
Committee (PIAC) (Bauer 2014a). PIAC represents the only legislated petroleum revenue
management oversight body consisting entirely of civil society members and as such, is completely
independent. The 13 civil society members who make up the committee include representatives of
the unions, traditional chiefs, journalists, lawyers, chartered accountants, and religious groups who
Daitch, Schwann, Bauer, Dias & Fan Li