EITI looks towards greater transparency in extractive contracts, gender disclosure, action on corruption
23 June 2019
The Extractive Industries Transparency Initiative’s Global Conference (#EITI2019), which takes place every three years (last held in Lima in 2016), was held in Paris last week (18-29 June). The Global Conference is seen as an opportunity for all stakeholders (governments, companies and civil society) from the 52 countries that commit to the EITI standard, to discuss progress in its implementation.
EITI sets out to increase transparency and good governance in the oil, gas and mineral resource industries.
The title of this year’s conference was ‘Open Data, Build Trust’, and focused on mainstreaming the disclosure of more data and improving its accessibility. With the publication of the new 2019 EITI Standard, new requirements on contract transparency have been laid out, including a commitment for all contracts to be published from 2021 onwards; “implementing countries are required to disclose any contracts and licenses that are granted, entered into or amended from 1 January 2021”. Contracts include the legal and fiscal terms for oil, gas and mining projects, and their publication will be, to quote EITI, “a game-changer”.
The Global Conference also discussed other issues of importance, including gender inclusion/equality, and commitments on environmental reporting and project-level reporting.
On gender, the new 2019 EITI Global Standard includes requirements covering: 1) representation in EITI; 2) provision of gender-disaggregated data; 3) better access to data; and 4) documentation of efforts to improve gender equality. Thus, the EITI recognises the role of women in improving conditions in the extractive sector and also their vulnerability to mining exploitation.
The EITI appears also to be picking up on the environmental impacts of the extractive industries. The 2019 EITI Standard includes requirements to “report environmental payments by companies to government and encourage disclosures of contextual information related to environmental monitoring”.
Also discussed this year was the issue of corruption. This is an issue that has increased in salience in the Americas region with the Lava Jato case a prime example. Corruption is seen as one of the major obstacles to the reduction of poverty. The discussion focused on the role that the EITI can play in the global anti-corruption agenda by addressing risks such as “hidden ownership, opaque licensing procedures and unaccountable revenue collection and management”.
However, admitting that corruption is prevalent, the EITI International Secretariat commissioned a paper to help identify its strengths and limitations to address corruption. A draft paper was discussed that focuses on how the EITI directly and explicitly works to prevent, detect or sanction acts of extractive sector corruption. Shared as a “discussion starter”, it tackles many uncomfortable questions including, why has the EITI been unable to prevent instances of extractive sector corruption cases in implementing countries? A copy of the discussion paper can be found here.
That transparency can be a very useful instrument in tackling corruption was suggested by Daniel Kauffman, Mark Robinson and Juan Cruz Vieyra. However, as they point out, it is not enough. They see civil society participation as crucial in monitoring and exerting pressure for greater accountability: “governments need to find effective mechanisms of accountability and citizen participation, including through representatives in communities affected by extractive industries”.
They further argue that “these mechanisms can effectively connect the information the public has at its disposal with the action expected from both governments and companies, banishing ‘zombie transparency’ and producing the conditions in which extraction can positively impact economic and social development”.
Furthermore, they argue that the EITI initiative offers a useful mechanism to generate dialogue and effective participation. Although only Colombia out of ten countries in the Americas that have joined the EITI, is deemed fully compliant, the EITI does offer a way to generate dialogue and “a roadmap to improve the management of [the extractives] sector”.
However, according to the 2017 Resource Governance Index, in order to tackle these issues more effectively, resource-rich countries need to double their efforts in strengthening governance and institutional frameworks to govern the extractives sector and prevent possible corruption. For further analysis from Kaufmann et.al., read “How Latin America Can Use its Natural Resource Wealth Responsibly”. The authors present a series of proposals to improve transparency, accountability and citizen participation.