eiti progress report 2007-2009
TRANSCRIPT
PROGRESS REPORT 2007-2009Establishing resource transparency
Photographs
COVER: From left to right:
1. CHINA © Dermot Tatlow/Panos Pictures;2. KUWAIT © Penny Tweedie/Panos Pictures;3. INDONESIA © Rob Huibers/Panos Pictures;4. KAZAKHSTAN © Chris Stowers/Panos Pictures;5.DEMOCRATIC REPUBLIC OF CONGO/EITI;6.CHAD © Teun Voeten/ Panos Pictures;7. KAZAKHSTAN © Chris Stowers/ Panos Pictures;8. GHANA © Gary John Norman/Panos Pictures; 9.DEMOCRATIC REPUBLIC OF CONGO/EITI; 10.AZERBAIJAN © Yola Monakhov/Panos Pictures11. DEMOCRATIC REPUBLIC OF CONGO/EITI12.© Hazlan Abdul Hakim/iStock
p7 (left) NIGERIA © George Osodi/Panos Pictures(right) DEMOCRATIC REPUBLIC OF CONGO ©Giacomo Pirozzi/Panos Pictures
p4-5 AZERBAIJAN © Marcus Bleasdale/ VII;VENEZUELA © Marcus Bleasdale/ VII; NIGERIA© Antonin Kratochvil/VII; PERU © BenjaminLowy/VII
p12 EITI COMMITTEE,CONGO-BRAZZAVILLE/EITI;p13 AZERBAIJAN © Marcus Bleasdale/ VII
p14 MONGOLIA EITI Mongolia
p23 ANWAR RAVAT, World Bank, EITI ;DRC/Katanga/EITI
p27 CHAD © Teun Voeten/ Panos Pictures
P30 CHINA © Dermot Tatlow/Panos Pictures
p31 VENEZUELA © Marcus Bleasdale/ VII
p32-33 DEMOCRATIC REPUBLIC OF CONGO ©Jean Pierre Muteba; GHANA © Newmont MiningCorporation; INDONESIA © Merijn van derVliet/iStock; GHANA © Gary John Norman/Panos Pictures
EITI Progress Report 2007-2009
Edited by Christopher Eads and AndersTunold Kråkenes at the EITI Secretariat
Designed by Alison Beanland
Message from the EITI International Board, Chairman and the EITI Head 2
The EITI in the world 4
Establishing resource transparency 6What the EITI is and how it works
Supporters of the EITI 8
Achievements 2007- 2009 10
Implementing the EITI 12Local dialogue, global partnership
Country progress 16
Validation 18The EITI’s quality assurance mechanism
Supporting implementation 20
Who’s where in the world of EITI support 28
Looking forward 29EITI – global minimum standard, a catalyst for change
Expanding the EITI 30Outreach to new partners
Mining 32Deepening the EITI
Communications 34
Research 36
EITI governance, management and administration 37
How we are funded 40
PROGRESS REPORT 2007-2009Establishing resource transparency
EITI Stakeholders and Supporters,As the outgoing members of the EITIBoard, we take this opportunity to reviewthe achievements of the EITI during ourtenure and reflect on the challengesahead. We were appointed at the OsloConference in October 2006 to representthe core constituencies of the EITI:implementing and supportinggovernments, civil society, and extractivecompanies and investors. Our shared goalwas to ensure that, through transparency,extractive industries lead to developmentand prosperity, not poverty and conflict.
Since Oslo, we have seen the transitionof the EITI from a series of pilot projects tothe EITI as the global framework fortransparent natural resource revenuemanagement. To achieve this, the Boardhas focused on three strands of work:• Deepening the initiative;• Widening the initiative;• Developing the initiative.
Deepening the initiative.We haveprovided political, technical andinstitutional support to the countriesimplementing the EITI. As a result, we arebeginning to see the benefits of moretransparent governance of the extractiveindustry sector for ordinary people.However, ensuring progress continues tobe made requires careful judgement andquality assurance. The EITI Board is thecustodian of the EITI principles, criteriaand methodology. As such, we mustensure that the integrity of the initiativeand the EITI brand is protected andenhanced. We have accredited 24countries as EITI Candidates and clarifiedthe validation process that will be used todetermine which are EITI Compliant. Wehave worked to maintain strong
implementing country ownership and toensure consistent and equitable treatmentbetween countries. The validation work,which is now underway in severalCandidate countries, is an essential qualityassurance mechanism for the EITI. We urgeall EITI stakeholders to prioritise andsupport this work.
Widening the initiative. Support for theEITI standard is growing, as more andmore companies, development agencies,national governments, the UN, and otherinternational bodies endorse the initiative.Most importantly, the number of countriesimplementing the EITI has also continuedto grow. The Board members and ourorganisations are proud that our activeefforts have helped support the wideningof the EITI initiative around the world.
Developing the initiative. We havealso looked toward the future of the EITI.The EITI focuses on a specific part of theextractive industry “value chain”. Weacknowledge that there are importanttransparency and accountability issuesrelating to other parts of this chain. Inestablishing the validation indicators, we,the EITI Board, have reiterated our viewthat the EITI is best served by a focus onand adherence to the agreed principlesand criteria guiding the validation process.We are encouraged to see that in countryafter country, the establishment ofnational EITI programmes governed bywell-functioning multi-stakeholder groupsalso provides a platform for broaderdebates about the management of andrevenues from natural resources.
The achievements of the EITI and itsstakeholders during the last two yearsattest to the dedication of our
stakeholders and supporters. We haverecently conducted a review of howthe Board works. Although our overallfindings were positive, some areas forimprovement have been identified, andwe urge the incoming Board to act onthese findings. It is our firmrecommendation that our Chairman, PeterEigen, is invited to serve for another andfinal two-year term. We would also like tothank the staff of the EITI InternationalSecretariat in Oslo, who manage withgreat dedication and professionalism,the day-to-day operations of the EITI.
It is with great pleasure that we haveserved to guide and support the EITI’sobjective to provide a framework fortransparency in the management ofnatural resources to support developmentin resource-rich countries. We are proudof what the EITI has achieved. We alsorecognise the importance of thechallenges that lie ahead, especially asmany EITI countries move into the keyphase of validation. We remain fiercelycommitted to ensuring that the EITI andits partners are able to meet thesechallenges and continue on the jointmission of helping countries to maximisethe benefits of their natural resourceendowments for all citizens.
The EITI Board2006-2008
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Message from the EITI Board
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Message from the EITI Chairman
The main purpose of this report isto illustrate the progress made inimplementing the EITI following ourOctober 2006 global conference in Oslo.That conference in many ways markedthe end of the EITI’s test and developmentphase and the beginning of EITIimplementation. By the end of 2008,24 countries had gone through thesign-up phase. The benefits of EITI arefurther highlighted by the fact that manymore countries, including Norway, arealso now poised to become Candidate
countries. The EITI continues to bedeepened through improved andexpanding implementation, especially asa growing number of countries prepare tocomplete the validation process.
As with any coalition, the strength ofthe EITI resides solely in the collective willof its stakeholders. It is the role of theSecretariat to bring these stakeholderstogether to facilitate the cooperation thatwill translate the principles of the EITI intoaction and help to ensure that naturalresource wealth leads to prosperity and
development and not to misery anddecay.
This report contains contributions fromover 40 countries, companies and civilsociety organisations from around theworld. That is how it should be. Othersreport and tell their stories; we can onlyhelp by bringing them all together.
Jonas MobergHead of EITI International Secretariat
Message from the EITI Head
It is with great honour that I have servedas EITI Chairman these past two years.It has been an exciting but challengingtime to be working in this field – withgovernance, energy and market issuescoming under unprecedented scrutiny.The principles of the EITI have stood upwell to this scrutiny, and the supportfor the initiative from governments,companies and civil society organisationshas expanded enormously. This periodhas therefore been one of transformingthe EITI from a mere “initiative” into astandard being implemented by manyresource-rich countries. Watching thisprocess, I am heartened by how much our
framework has been shaped by our earlyexperience.
I have dedicated much of my life tothe idea that good governance andtransparency can improve the lives ofpeople around the world, raise awarenessand create an environment of trust. Fromthis, it is clear to me that although eachcountry faces different challenges, theneed for a foundation of trust is the samefor all. The EITI is built on broad localstakeholder participation to provide aforum for dialogue between governmentsand civil society. This dialogue has provedto be a key ingredient in establishinggreater trust between these groups.
I have found great purpose andsatisfaction in playing a leading rolein the development of the EITI as itsChairman. I have had the privilege towork with an International Board that hasguided the EITI process with dedicationand expertise. I extend a warm thank youto the board members and to all ourstakeholders and supporters, as I realisethat everything the EITI has and willachieve rests entirely upon your efforts.
Peter EigenChairman of EITI
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Liberia: Liberia EITI (LEITI)has made great progress inimproving transparency inthe mining sector in thecountry, and LEITI legislationhas been drafted, withcomments currently beingsolicited. Most recently,independent auditors havecommenced work on thereconciliation report. Page 13
Ghana: Ghana signed up to the EITI in 2003 and hasbeen working mainly with the mining sector. In thelatter part of 2007, members of the National SteeringCommittee started discussions on expanding thescope of Ghana EITI (GHEITI) to both the forestryand the oil and gas sectors. Page 14
The EITI in the world
Peru: Peru committed tothe EITI in 2006. It has setup a National Commissionwith participants fromvarious ministries, civilsociety organisations, andcompanies. The first report,covering the period2004-2007, is to belaunched in the firstquarter of 2009. Page 15
Candidate countries
Supporting countries
AustraliaBelgiumCanadaGermanyFranceItalyThe NetherlandsNorwaySpainSwedenThe United KingdomThe United States
of America
AzerbaijanCameroonCentral AfricanRepublicCôte d´IvoireDemocratic Republic
of CongoEquatorial GuineaGabonGhanaGuineaKazakhstanKyrgyzstanLiberiaMadagascarMaliMauritaniaMongoliaNigerNigeriaPeruRepublic of the CongoSão Tomé e PríncipeSierra LeoneTimor-LesteYemen
The EITI is becoming a global standard shared by more and more countries around the world.Currently, 24 EITI Candidate countries are implementing the initiative. These countries havecompleted the sign-up phase and are now working towards full implementation of all EITIprinciples and criteria, to pass Validation and become EITI Compliant countries. Many moreresource-rich countries in Europe, Africa, Asia, the Middle East and Latin America havecommitted to joining this growing initiative. 12 Supporting countries provide political andfinancial support to promote the EITI.
EITI CHAIRMAN’S OFFICE BERLIN
EITI INTERNATIONAL SECRETARIAT OSLO
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Nigeria: Nigeria was oneof the first countries tosign on to the EITI andremains at the forefrontof EITI implementationglobally. Nigeria is also thefirst EITI implementingcountry to establish adedicated EITI law. Page 13
Cameroon: Committee meetingsof Cameroon EITI, which includerepresentatives of civil society,parliament, companies and theadministration, are importantopportunities for exchangesbetween its members. Page 15
Azerbaijan: In November 2004 Azerbaijanbecame the first country to introduce an EITIimplementation mechanism. All 26 foreign andlocal extractive industry companies operating inAzerbaijan are participating in the EITI process.Azerbaijan has published two EITI reports per yearsince 2005. Page 13
Kazakhstan: Kazakhstan published its first EITIreport in 2007, in which 39 oil-producingcompanies participated. As a result of ongoingcommunications and outreach activities, 110companies from the oil and gas and miningsectors have now joined the EITI. A secondreport is currently being prepared. Page 15
Madagascar: After regionalawareness sessions in themining areas, transparentelections were held to expandthe Multi-Stakeholder Group, toensure regional representationand to establish regional EITICommittees. These regionalEITI Committees are now partof the General Assembly of theEITI Madagascar. Page 14
Mongolia: The EITI Secretariat was established inJune 2007, and has conducted several workshopsworking with company and government officials.For the second EITI 2007 reconciliation report morethan 100 national and international companies inMongolia are participating in the EITI reportingprocess. Page 14
EITI 4TH GLOBAL CONFERENCEDOHA, QATAR
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When a country extracts naturalresources, the development in thecountry has too often been hampered.This paradox has been referred to as “theresource curse” or “the paradox of plenty”.Stirred by detailed case examples ofopaque payments between companiesand governments, the EITI arose from astorm of campaigns earlier this decade asinternational civil society organisationscampaigned under the banner of “PublishWhat You Pay”.
Governments of resource-rich countriesrecognised the potential benefits of thisinitiative for reducing mistrust andconflict, building their capacity tomanage revenues and resources,enhancing their international reputation– especially on anti-corruption andeconomic management – and attractinginvestment. By early 2009, 24 wereimplementing the EITI.
Well-managed companies immediatelysaw not only the commercial case for theEITI, especially when other companiesoperating in a country were required todo the same, but also the reputationalcase for supporting more transparency intax, royalty and signature payments.The role of institutional investors inencouraging this process was highlysignificant. Around 80 investors have
signed a statement supporting theinitiative and have actively encouragedthe companies in which they invest toparticipate in the EITI.
An increasing group of intergovern-mental organisations and donor countrieshas been solidly behind this initiative –politically, technically and financially –since it was first put forward at the WorldSummit on Sustainable Development in2002. In 2008, the UN General Assemblypassed a resolution endorsing the EITI.In this way, it is rapidly becoming aglobal standard for transparency andaccountability in the extractive industries.
The management of the EITI at theinternational level reflects the multi-stakeholder approach used in nationalEITI implementations. In September 2006,an EITI Board was established with theresponsibility for the overall development,strategic direction and credibility of theEITI, as well as for outreach and advocacy.The Board is chaired by Dr Peter Eigen,founder of Transparency International,and consists of members from countries,companies and civil society. The Boardmakes recommendations on these issuesto a biennial EITI Conference, and issupported by a small EITI Secretariat,which since September 2007, has beenbased Oslo, Norway.
Establishing resource transparencyWhat the EITI is and how it works
The EITI is a global standard that ensures more transparent management of natural
resources. The EITI is backed by governments, companies, civil society, investors
and international organisations. Together they developed a robust yet flexible
methodology for monitoring and reconciling company payments and government
revenues. The EITI process is implemented by governments, while emphasising
participation by governments, companies and civil society. The International EITI
Board and the International Secretariat are the custodians of the EITI process.
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To become an EITI Candidate, a countrymust meet four sign-up indicators,including the development of a work plandocumenting how the country intends toachieve EITI Compliance. The plan is to bediscussed with and agreed to by keystakeholders.
To achieve EITI Compliant status – orto extend Candidate status beyond 2years – a country must complete an EITIValidation (see pages 18-19). Validation isan essential element of the EITI globalstandard. It provides an independentassessment of the progress achieved andidentifies what measures are needed tostrengthen the EITI process. TheValidation is carried out by an
independent Validator selected bythe Multi-stakeholder Group, usingthe methodology set out in the EITIValidation Guide.
If the EITI Board considers a countryto have met all the indicators in theValidation grid, the country will berecognised as EITI Compliant. If a countryhas made good progress, but does notmeet all EITI requirements, the countrymay apply to retain its Candidate statusfor a limited period. Where validationshows that no meaningful progress hasbeen achieved, the Board will revoke thecountry’s Candidate status.
Award oflicenses and
contracts
Regulation andmonitoring of
operations
Independentverification of
tax and royaltypayments
G O V E R N M E N T S P E N D I N G
Revenuedistribution and
management
Implementationof sustainabledevelopment
policies
Companies disclose payments Government discloses receipt of payments
The EITI provides a forum for dialogueand a platform for broader reform
Oversight by a multi-stakeholder group
For a quick introduction to the EITI please see the Fact Sheet at www.eitransparency.org/document/factsheet
Supporters of the EITI
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40 of the world’s largest oil, gas and mining companies
support and actively participate in the EITI process, as
they recognise the benefits of improved governance
and transparency in the countries where they operate.
In addition, the EITI is supported by 80 institutional investors.
For countries rich in oil, gas and minerals, the management of a country’s natural resource revenues for the benefit of a country’scitizens is the domain of sovereign governments. However, if not managed well, these resources can create negative economicand social impacts. For the supporting companies of the EITI, this underlines the importance of transparency by bothgovernments and companies. Rex W. Tillerson, Chairman and CEO, Exxon Mobil Corporation, and Peter Eigen, Chairman, EITI
Supporting companiesinclude:Anglo AmericanAngloGold AshantiArcelorMittalArevaBarrick GoldBG GroupBHP BillitonBPChevron CorporationConocoPhilipsDeBeersExxonMobilHess CorporationNorsk HydroKatanga Mining LimitedLonminMarathonNewmontNippon Mining & MetalsOxus GoldPemexPetrobrasRepsol YPFRio TintoShellStatoilHydroTalisman EnergyTOTALWoodsideXstrata
80 institutional investors have signed up to an “Investors’ Statement on Transparency in the Extractive Sector”.In the statement, the investors call on the companies in which they invest to support the principles ofpayment disclosure developed by the EITI. It can be found at www.eitransparency.org/supporters/investors
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The recent fall in international commodity prices reinforces the need forcollective approaches to enhance transparency and accountability inextractive industries worldwide. That is why we continue to be a strongsupporter of the EITI and are proud to host the International Secretariat inOslo. Terje Riis-Johansen, Norwegian Minister of Petroleum and Energy
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The participation of civil society
organisations is central to the EITI
process. Both international and
national civil society organisations
provide essential support to the EITI
through their advocacy, training,
monitoring and facilitation efforts.
Many governments and intergovernmental
organisations support the EITI. These governments
and organisations provide political, technical and
financial support to the initiative, and support
implementation in countries around the world.
The EITI is a leader in the movementtoward a global standard for revenuetransparency and accountability. Thecombination of EITI measures and theimproved international accountingstandards now being promoted bythe Revenue Watch Institute and itspartners in the Publish What You PayCoalition can give investors and thecitizens of resource-rich nations theprotections and public disclosuresnecessary to hold government andindustry accountable. George Soros,
Chairman, Open Society Institute
Supporting civil society organisationsinclude:Catholic Agency for OverseasDevelopment (CAFOD)Global WitnessOxfamOpen Society InstitutePublish What You Pay CoalitionRevenue Watch InstituteSecours Catholique (Caritas France)Transparency International
Supporting governments andintergovernmental organisationsinclude:AustraliaBelgiumCanadaGermanyFranceItalyThe NetherlandsNorwaySpainSwedenThe United KingdomThe United States of America
African Development BankAfrican UnionAsian Development BankEuropean Bank of Reconstructionand DevelopmentEuropean Investment BankEuropean UnionG8IMFOrganisation internationale dela FrancophonieUnited NationsWorld Bank
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Achievements 2007- 2009
� Implementing the EITIBy the end of 2008, there were 24 officialCandidate countries implementingthe EITI. All Candidates have set upmulti-stakeholder committees withrepresentatives from government,companies and civil society to promoteand manage the EITI process at thenational level.
While the first countries to join the EITImainly focused implementation in the oiland gas sectors, more and more countriesare also now implementing the EITI in themining sector. Liberia has includedforestry in its national EITI process, andothers are also considering the same step.
To date, 10 Candidate countries havepublished one or more EITI reports,disclosing the payments and revenuesreceived from oil, gas and mineral sales,though some reports have gone further.
Validation serves as the final step of theEITI’s quality assurance mechanism beforea country can be certified as an EITICompliant country, ensuring that allEITI principles and criteria are beingsuccessfully implemented.
The International Monetary Fund hasdefined 38 countries as “hydrocarbon-rich” and 18 as “mineral-rich”. Currently,11 hydrocarbon-rich countries (29%)and 10 mineral-rich countries (55%)are EITI Candidates.
� Supporting implementationThe Oslo-based EITI InternationalSecretariat provides “coordinating energy”for the EITI globally, acting as a convenerand facilitator of support to implementingcountries, while providing guidance onthe global EITI requirements as set out inthe EITI Sourcebook and Validation Guide.
Financial and technical assistance forimplementation is provided through theMulti Donor Trust Fund financed by 12supporting countries and managed bythe World Bank, regional developmentbanks, bilateral aid agencies andnon-governmental organisations.
Regional and global cooperationbetween EITI participants and supportersis fostered by the EITI InternationalSecretariat and its partners. International,regional and national meetings takeplace on a regular basis and areannounced in the calendar of events onwww.eitransparency.org. The Secretariathosted the first EITI National Coordinatorsmeeting in Oslo in October 2008.
Training for EITI stakeholders is offeredby the World Bank, international civilsociety and bilateral donors such asthe Norwegian government. The EITIInternational Secretariat and its partnerInWent (Germany) have provided aweek-long course to all EITI implementingcountries in 2008 and will repeat theexercise in 2009 and 2010.
� ValidationValidation is the EITI’s quality assurancemechanism and an essential feature ofthe EITI methodology. In 2008, the EITIBoard clarified the EITI’s Validationrequirements and set a Validationdeadline of 9 March 2010 for the first22 Candidate countries.
Validation exercises are being carriedout at the national level to assessimplementation of the EITI guidelines.The Validation work at country levelserves to safeguard the EITI brand byholding all EITI implementing countriesto the same global standard oftransparency and accountability.
The EITI International Secretariatis providing technical assistance toimplementing countries in preparingfor the Validation process. At present,Azerbaijan and Liberia are the firstcountries to initiate the Validationprocess.
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� Outreach to new implementing andsupporting countriesThe Secretariat and its international andnational partners are jointly conductingoutreach and advocacy work, to bringmore resource-rich and other strategicallyimportant countries into the EITI. Severalnew countries have declared theirintention to implement the EITI andbecome candidates in 2009, includingIraq, Indonesia, Tanzania, Mozambique,Zambia and Burkina Faso.
Advocacy with multilateral initiativesand forums have taken many differentforms. These efforts include the gaining ofUnited Nations General Assembly backingof the EITI, as well as repeated expressionsof support from the G8 and G20 groups ofcountries. The African Union is amongstthe regional organisations that advocatesfor the implementation of the EITIamongst its members.Examples of outreach directly to countriesinclude:• Intense dialogue with Chinese
institutions and an EITI supportedresearch project on Chinese companies'activities in Africa;
• The engagement of an advisor based inJakarta coordinating Indonesianpreparations for joining the EITI;
• The organising of the MediterraneanRoundtable in Tunis in November 2008,by the African Development Bank andthe EITI International Secretariat.
� Building supportThe EITI enjoys strong support across awide range of stakeholders. At themultilateral level the G8 has repeatedlyendorsed the EITI, while the EnergyMinisters of G8, plus China, India andKorea, issued a joint statement of supportfor the EITI during the G8 Summit in June2008; the European Union and the AfricanUnion recommended implementation ofthe EITI in a joint declaration in August2008; and the United Nations GeneralAssembly expressed strong backing forthe EITI in a resolution passed inSeptember 2008.
Support from the private sector is alsorobust, with 40 of the world’s largest oil,gas and mining companies supportingthe EITI. In addition, over 80 globalinvestment institutions that collectivelymanage over US $14 trillion (as of June2008) are supporting the EITI. TheSecretariat continues to work with privatecompanies to expand this support.
� Promoting innovation and sharingexperienceThe EITI International Secretariat isworking on a number of fronts topromote innovation in EITIimplementation and to encourageimplementing countries to exchangelessons learned. Regular meetingsbetween EITI practitioners in differentcountries are helping to facilitate theseexchanges of ideas and experiences, suchas the West African EITI Conference inAbuja in September 2008, organised bythe Nigeria EITI and ECOWAS.
Several EITI countries are also using theEITI as a platform for broader efforts tostrengthen governance in the extractivessectors, including greater transparency inawarding contracts and in monitoringhow revenues from the sector are beingutilised by the government.
A key priority of the InternationalSecretariat is to strengthen EITIcommunications so that the informationgenerated by the EITI process is accessibleand comprehensible to a wide audienceof stakeholders.
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Implementing the EITILocal dialogue, global partnership
The EITI is a robust yet flexible standard which is built around strong national
ownership, as each implementing country can shape its own process according
to its needs. As a global standard for revenue disclosure, it uniquely couples
transparency (reporting) with accountability (multi-stakeholder participation).
Each Candidate country is implementing the initiative in slightly different ways:
some require total disaggregation of revenues data, while others have determined
low levels of materiality. Some countries have sought to extend EITI activities to
include sectors outside oil, gas and mining, as well as transparency of contracts
and operations and government expenditure. The differing models of EITI
implementation is a reflection of the multi-stakeholder oversight mechanism used
to decide these issues, build trust, monitor impact, and ensure the programme is
designed to best serve a country’s individual needs.
In the past year, there have been an increasing number of opportunities for the
stakeholders from different countries to learn from one another and to share best
practices:
• In September 2008 the Nigerian EITI Stakeholder Group and ECOWAS hosted a
West African EITI Conference in Abuja;
• The EITI International Secretariat, with funding from the German government and
the World Bank, hosted three training seminars in Berlin throughout 2008;
• With funding from the Norwegian government, the EITI International Secretariat
hosted the first national coordinators meeting in Oslo, in October 2008; and
• The February 2009 Doha Conference is a further opportunity for lesson-learning,
awareness-raising, and support-building.
EITI seminar in Berlin, December 2008
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Building ownership and sharingbest practice – experiences fromnational stakeholders
[NEITI] has recorded major achievements
in its four years of operations. Among
other accomplishments, it commissioned
and popularised the first comprehensive
audit of the petroleum sector for the
period 1999 to 2004; it conducted studies
that swelled government’s coffers by over
$1 billion; and it catapulted our country
into a leading position among countries
implementing the EITI.
OMAR MUSA YAR’ADUA, PRESIDENT OF NIGERIA
NIG
ERIA Nigeria was one of the first countries to
sign on to the EITI and remains at theforefront of EITI implementationglobally. Nigeria is also the first EITIimplementing country with adedicated EITI law. The NEITI Actinstitutionalises process, physical andfinancial audits of the extractive sector,as well as disbursement and applicationof funds. Thus NEITI goes well beyondthe basic requirements of the globalEITI whilst conforming to its principles.
The first set of audits, covering1999-2004, was published in 2006.An Inter-Ministerial Task Team ledby NEITI was set up to develop andimplement a remediation strategy forlapses identified by the NEITI Audits.This will enhance the capacity ofagencies, which will lead to a moretransparent monitoring of revenueflows.
The Nigerian government issupportive of the initiative, in linewith other key reforms being pursuedby it, and has provided financialsupport to enable the audits,Validation exercise, civil societyengagement and remediation exercise,among other reforms.
NEITI recently hosted the first WestAfrica EITI Conference in Abuja. Theevent was successful and well attendedby various EITI stakeholders.
Nigeria has made substantial progressin the quest for transparency andaccountability in the extractive sector.NEITI will include solid minerals infuture audits.HARUNA SA’EED, EXECUTIVE SECRETARY,
NEITI
Liberia EITI (LEITI) has made greatprogress in improving transparency inthe mining sector in the country. Theyhave involved local communities in theprocess by travelling to the regions toseek communities’ input and mountingan extensive publicity campaign toincrease awareness about theimportance of transparency in the
mining sector. LEITI legislation has beendrafted, with comments currently beingsolicited. Most recently, the independentauditors (Crane, White & Associates)have commenced work on thereconciliation report.
LEITI’s first EITI Report is due forpublication in February 2009. Liberiawill seek EITI Validation soon after.
LIBER
IA
Azerbaijan is an EITI pioneer. Thethen-President of Azerbaijan, IlhamAliyev, committed Azerbaijan toimplement the EITI and supportthe international efforts for highertransparency in the extractiveindustries at the first globalConference in June 2003. TheNational EITI Committee, includingrepresentatives of the ministriesof foreign affairs, economic
development, fuel and energy,finance, tax, ecology and naturalresources, and of the statisticscommittee, was immediatelyestablished, chaired by the state oilcompany. All foreign and localextractive industry companies,as well as civil societies andnon-governmental organisations(NGOs), were invited to participate inthe EITI implementation process.
In November 2004 the EITICommittee, the Coalition of NGOs forImproving Transparency in ExtractiveIndustry (representing more than 130Azeri NGOs) and all 26 foreign andlocal extractive industry companiesoperating in Azerbaijan, signed aMemorandum of Understanding(MOU). By signing the MOU,Azerbaijan became the first country tointroduce an EITI implementationmechanism. Azerbaijan has publishedtwo EITI reports per year since 2005.
AZER
BA
IJAN
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The President of Madagascar haslaunched a major decentralisation andparticipation programme across thecountry. He has personally heldleadership training for 17,000 villagechiefs. The national EITI membershave followed this approach. Thisreflects the desire to involve the localcommunities in and around the miningareas who feel the first effects ofmining activities: the impact on theirliving standards, their environment,and their social life. In these situations,tensions between the communities,the companies and local governmentcan run very high.
Members of the EITI agreed thattransparency is the basis of genuinedemocracy and anti-corruption.To be transparent requires a changein behaviour and attitude at all levels.After regional awareness sessionsin the mining areas, transparentelections were held to expand theMulti-Stakeholder Group, to ensureregional representation, and toestablish regional EITI Committees.These regional EITI Committees arenow part of the General Assembly ofthe EITI Madagascar.HARIFIDY JANSET RAMILISON, EXECUTIVE
SECRETARY OF MADAGASCAR EITI
MA
DA
GA
SCA
R From an early stage of the EITI process inMongolia, the government, severalleading companies and civil societyworked together in an open andcooperative manner. The NationalCouncil is chaired by the Prime Minister,while a Working Group is chaired by thechief adviser to the Prime Minister.All stakeholders have signed amemorandum of understanding of EITIimplementation. The EITI Secretariatwas established in June 2007, and hasconducted several workshops workingwith company and government officials.For the second EITI 2007 reconciliationreport more than 100 national andinternational companies in Mongoliaare participating in the EITI reportingprocess. These companies vary betweenstate, private, joint ventures and
subsidiary companies, and representactivities in the extraction of copper,molybdenum, oil, gold, coal, fluorspar,zinc and polymetal. As result of EITIimplementation, Mongolia is expectingthat a standard and an environment forpreventing corruption and improvingmining industries revenue managementwill be created. Mongolian Minerals Lawpassed in 2006 has a specific articleunder which all companies havinglicense in extractive industries areobliged to disclose and publicise all paidtax and payment to government. Thegovernment of Mongolia also issued aresolution, under which several centraland local administrative bodies havetasks to implement the EITI, producereports and form local Councils.TSOLMON SHAR, EITI MONGOLIA
Ghana signed up to the EITI in 2003 andhas been working mainly with themining sector. In the latter part of 2007,members of the National SteeringCommittee started discussions onexpanding the scope of Ghana EITI(GHEITI) to the forestry, and oil and gassectors. This discussion resulted in atwo-day meeting between the GHEITINational Steering Committee and civilsociety organisations involved in the oilsector, in February 2008. The workshopdiscussed critical issues around theexisting legal, regulatory and fiscalframework of the sector. It was agreedthat the membership of the GHEITINational Steering Committee beexpanded to include major players inthe oil and gas sectors. Invitations willbe extended to the Ministry of Energy,the Ghana National Petroleum
Corporation (GNPC) and the oilcompanies (Tullow and Cosmos Energy).It was also agreed that a scopingexercise be undertaken by the GHEITISecretariat to recommend appropriatemechanisms to bring in forestry, and oiland gas. Extending EITI into the oilsector forms an important componentof the GHEITI work plan for 2009/10.A series of sensitisation workshops todiscuss constraints and opportunitiesfacing the sector is planned. It is hopedthat the extension of the EITI into the oilsector will facilitate the transparent,accountable and efficient managementof the anticipated revenues from oilexploration in Ghana.FRANKLIN ASHIADEY, HEAD OF GHANA EITI
SECRETARIAT
MO
NG
OLIA
GH
AN
A
15
Peru committed to the EITI in 2006. Ithas set up a National Commission withparticipants from various ministries, civilsociety organisations, and companies.The first report, covering the period2004-2007, is to be launched in the firstquarter of 2009. It will include taxinformation regarding direct corporaterights and royalties, as well as non-taxinformation such as licensing contractsand legal and tax stability contracts. Itwill also include amounts transferred tothe sub-national level of government(regions, districts and municipalities),public universities and other publicinstitutions that are entitled to national
collected royalties, and the formulaeused to determine such transfers.Funded by the International FinanceCorporation (IFC), two pilots have beenimplemented in Cusco and Cajamarca.In Cajamarca, a mechanism calledMejorando la inversion municipal (MIM)has been established to disseminate andmonitor the use of royalties transferredto the region. It has increased efficiencyand transparency in the process andproved that citizen participation iscritical to improve accountability ofthose administering the resourcesobtained from natural wealth.
PERU
Committee meetings of Cameroon EITI,which include representatives of civilsociety, parliament, companies andthe administration, are importantopportunities for exchanges between itsmembers. The decisions taken in generalon the basis of consensus illustrate thisongoing dialogue. Thanks to the EITI,government officials and companiestake the habit of working with civilsociety and appreciate the contributionof its representatives. Integration intothe Committee of Parliamentarians ofthe majority and the opposition sharethis desire for dialogue to promote
transparency in the management ofnatural resources in Cameroon.
In view of its intentions to reachValidation, the EITI Committee ofCameroon met with the InternationalSecretariat and the World Bank, as wellas representatives from civil society,government, parliament, internationalorganisations and other interestedgroups in September 2008 to discussimplementation of the initiative.ALFRED BAGUEKA ASSOBO, CAMEROON EITI
NATIONAL COORDINATOR
Kazakhstan committed to the EITI in2005. It became a Candidate in 2007and published a first EITI report at theend of that year covering budgetrevenues for 2005, in which 39oil-producing companies participated.Together with the mining sector,Kazakhstan’s extractive sector includesmore than 200 companies. Securingcompanies’ participation has been agreat challenge, especially fromsmaller ones. Amendments to the law“On subsoil and subsoil use” haveincluded incentives to EITI participation.As a result, 110 companies have joinedthe EITI, 67 of them in the oil and gassector and 43 in mining. Notably,TengizChevrOil, the largest oil-producing company, joined in April2008. A second report is being preparedand the National Stakeholders Councilcontinues to play a key role in advancingthe EITI. Kazakhstan plans to start theprocess of Validation in the first quarterof 2009.
CAM
ERO
ON
KA
ZAK
HST
AN
From a meeting in the MIM
16
Country progress
In Candidate countries the EITI is helping to promote widerreforms and dialogue on revenue transparency, the fight againstcorruption, and resource allocation, through helping to establishan environment of trust between groups and providing a moreopen forum for discussion and debate. However, although allCandidate countries share a common commitment to EITIprinciples, the ways in which the impact of the EITI manifests
itself vary across different EITI constituencies. The production ofEITI reports provides one measure of progress in a country andalso a benchmark from which to begin improving reportingstandards and technical capacities. Other more tangiblemeasures of EITI progress can be found through: the level ofsupport for EITI within a Candidate country; examining theinstitutional reforms taking place in line with EITI practices;
� This assessment of progress will be verified by Validation
Azerbaijan
Cameroon
Gabon
Ghana
Guinea
Kazakhstan
Kyrgyzstan
Liberia
Mali
Mauritania
Mongolia
Niger
Nigeria
Peru
Yemen
Congo
DR Congo
Equatorial Guinea
Madagascar
São Tomé and Príncipe
Sierra Leone
Timor-Leste
Côte d’Ivoire
Central African Republic
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edas
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ndid
ate
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ents
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nted
EITI
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iler
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rts pu
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repo
rtpu
blish
edVa
lidat
ion
plan
s
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strie
s cove
red
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Mining, Oil & Gas
Mining, Oil & Gas
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Mining
Mining, Oil & Gas
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Q3 2009
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20/11/2010
17
working method and support networks of national EITIoperations; monitoring of relevant government policies; and thescope and clarity of a country’s EITI workplan. The less tangible,though more fundamental, contributions of EITI to improvingthe governance environment are more difficult to quantify. Inmany countries, EITI efforts contribute to a larger context ofimproving transparency and supporting good governance.
The various aspects of EITI can be seen to benefit reform across arange of sectors including public financial management, civilsociety development, natural resources management, improvingthe investment climate, anti-corruption efforts, and povertyreduction programmes. The table below illustrates the progressmade by EITI Candidate countries to date and highlights keyobjectives for the year ahead.
Prog
ress
and
prio
ritie
s
curre
ntas
ofDe
cember 2008
First country to undertake Validation. Reports are produced every six months.
Preparations of the third and fourth EITI reports are currently underway. Website and communications strategy is under development.A pre-Validation exercise has been completed and consensus reached on next steps to be taken.
Reporting discrepancies have continued to narrow, though further discussions about enhancing reconciliation are needed.Scope for further integration of mining sector into the EITI is being examined.
Steps being taken include addressing problems identified in reports relating to sub-national flows and communications.Undertaking scoping exercise to include oil & gas sector.
The multi-stakeholder group is being simplified. Efforts underway to narrow time lag between reporting period and the issuing of reports.
Communication activities underway, while production of a second EITI report is planned for early 2009. Efforts to ensure full company participationin the EITI process are ongoing.
A new multi-stakeholder group has been appointed and work on publishing the next EITI report is a priority.
First EITI report and Validation preparations are underway. Efforts to broaden private sector participation are ongoing and the drafting of an EITI law isunder consideration.
Preparations for the first report underway; securing funding is a priority.
The need to maintain momentum in an uncertain political environment remains paramount. Main priorities include increasedinvolvement of all stakeholders on a more regular basis.
Disclosure templates have been updated and the second reporting cycle is currently underway in preparation for Validation in 2009.
Preparations for the first report underway; securing funding is a priority.
Priorities include addressing issues identified in the first EITI report, publishing the 2005 EITI report and commissioning reports for 2006 and 2007.
Reconciler has been selected and first EITI report is expected in early 2009. Priorities include working to ensure full company participation in the EITI process.
Agreeing governance processes and scope of initiative are a top priority. Commissioning process of the first EITI report has been initiated.
All three stakeholder groups represented in leadership roles of the National Committee. Communication and capacity-building activities are underway.Terms of reference for the first EITI report have been agreed and process moving forward.
Competition for natural resources continues to be a major factor in ongoing conflict in the country. Plans are being made to restructure the multi-stakeholdergroup and the opening of regional EITI offices has commenced.
Priorities include the finalisation of the terms of reference for the reconciliation exercise. Consultants facilitated by World Bank and RWI are continuing towork with civil society in implementing the EITI.
Securing funding for the EITI programme remains a priority, while work on agreeing on scope and governance arrangements continues.Process to commission first EITI report to be started soon.
Oil production has not yet begun, though work on agreeing what payments to cover in the first EITI report is planned to start soon. Work on Implementingcapacity-building programme to support the EITI process is also slated to begin in 2009.
Setting up of Secretariat and modifying governance arrangements are top priorities. Once a scoping study on transfer pricing is completed,the first EITI report will be commissioned.
Completion of the first EITI report is expected in 2009 followed by steps towards Validation to establish Compliance status.
Preparations for the first EITI report are currently underway. Reporting process will benefit from three years of data from previous revenue-reporting initiative.
The most recent EITI Candidate. A multi-stakeholder group has been established and preparations for the first EITI report are currently underway.
18
ValidationThe EITI’s quality assurance mechanism
Within two years of attaining Candidate
country status, an implementing
country is required to complete the
process of Validation. Validation is
a standardised aspect of the EITI
methodology that serves as the EITI’s
quality assurance mechanism. The two
most important functions of the process
are safeguarding the EITI brand by
holding all EITI implementing countries
to the same global standard and
promoting dialogue and learning at the
country level. Validation is not an audit.
It does not repeat the disclosure and
reconciliation work that is carried out to
produce EITI reports. Validation has
broader objectives as it evaluates EITI
implementation in consultation with
stakeholders, verifies achievements with
reference to the EITI global standard,
and identifies opportunities to
strengthen the EITI process going
forward. The EITI Board will use the
Validation Report to determine if a
country has fulfilled the requirements
to be granted EITI Compliant country
status.
Countries that demonstrate their
compliance with EITI (or demonstrate
substantive progress toward achieving
this goal) will receive international
recognition for their efforts and
achievements. If Validation is not
completed, or if the Validation shows
that there has been no meaningful
progress toward achieving EITI
Compliance, the EITI Board will revoke
that country’s Candidate status.
Validation thereby ensures that
“free riders” do not undermine
the EITI.
The Validation process is undertaken
at the country level, overseen by the
Multi-Stakeholder Group. The
implementing country appoints,
procures and pays for the Validation.
This ensures that there is strong
implementing country ownership of the
process. At the same time, the EITI Board
requires that the work be carried out by
one of seven accredited firms. These
firms were selected to serve as
Validators by the Board via a
competitive international bidding
process. This approach ensures that
the work is carried out to a consistently
high standard across all countries.
The Validation methodology is set out
in the Validation Guide. The Validator
meets with the Multi-Stakeholder
Group, the organisation contracted to
reconcile the figures disclosed by
companies and the government and
other key stakeholders (including
companies and civil society
organisations not part of the
Multi-Stakeholder Group). The
Validator’s final report is submitted
to the national government, the
Multi-Stakeholder Group and the
EITI Board for approval. If there is
disagreement regarding the Validation
process, then this is dealt with in the
first instance locally, with the EITI Board
only becoming involved in cases of
serious dispute. Following agreement,
the Validation Report is submitted to
the EITI Board to decide country status.
19
Validation in 2009-10The EITI Board agreed the proceduresfor procuring a Validator in March 2008.It subsequently established a Validationdeadline for the first 22 Candidatecountries of 9 March 2010. Two candidatecountries – Azerbaijan and Liberia – haveformally initiated the Validation processwith a view to completing the process inthe first half of 2009.
Azerbiajan is the first country to gothrough EITI Validation. In December2008, Azerbaijan entered into a contractwith Coffey International Developmentto produce a Validation Report inFebruary 2009. To prepare for theValidation, government institutions,companies and civil society groups haveconducted awareness-raising workshopsand assessments of the EITI indicators. As
the first country to go through thisprocess, they have helped to identify thestrengths and opportunities, as well asthe challenges, of both the reporting andthe Validation processes. It is expectedthat the Validation Report will containsome useful lessons which can then beused to help other EITI implementingcountries as they move towardValidation.
The objectives of the EITI seem almostto have been designed purposely forLiberia. For many decades Liberians havewitnessed their natural resources beingexploited by companies that providedlittle or no meaningful benefits whilepolluting their communities andenvironment, corrupting theirgovernment, and fuelling conflicts andwar. This has led to the present strongpolitical will and support for EITIimplementation in Liberia. However,while Liberia has embraced the EITIand even gone beyond its minimumrequirements, the pressing desire ofLiberia is the successful Validation of theLiberia EITI (LEITI) in order to achieve thedistinction of being an EITI Compliantcountry. Accordingly, the LEITI will soonrecruit a Validator, and Validation willbegin in February 2009. The LEITISteering Group has decided to completeValidation in the first half of 2009 for two
major reasons: to assure adequate timeto discuss the findings of the Validator,including addressing any observeddeficiencies; and for flexibility to initiateand conclude a second Validation effort,if necessary, before March 2010 – thedeadline for the final completion of ourValidation.NEGBALEE WARNER, EITI NATIONAL
COORDINATOR, LIBERIA
LIBER
IAA
ZERB
AIJA
N
For a detailed description of the Validation process, please see theValidation Guide at www.eitransparency.org/document/validationguide.
5 Establish a multi-stakholder working group6 Engage civil society7 Engage companies8 Remove obstacles to implementation9 Agree reporting templates10 Approve independent EITI administrator11 Ensure full participation from companies12 Ensure that company accounts are
properly audited13 Ensure that government accounts are
properly audited
14 Disclose to the administrator paymentsby companies to government
15 Disclose to the administrator revenuesreceived by the government
16 Ensure that payment and revenue figuresare reconciled
17 Identify discrepancies and recommendimprovements
18 Make EITI report publicly available
19 Examine companies implementation support20 Review actions taken on lessons learned
EITI COMPLIANT
1 Issue government announcement2 Commit to work with stakeholders3 Appoint implementation leader4 Compose, agree and publish fully costed workplan
DIS
CLO
SURE
VALIDATION
SIG
NU
PPR
EPA
RATI
ON
DIS
SEM
INAT
ION
Country undertakes external validation
MO
NIT
ORI
NG
&EV
ALU
ATIO
N
EITI CANDIDATE
Supporting implementation
The implementation of the EITI is first and foremost the responsibility of national
governments. However, it has been shaped and progressed by the active
participation of enlightened companies, who have seen the case not only for
transparency, but also accountability, of government and their own operations.
They want to be part of public discussions and engage with their stakeholders,
including local communities and governments. Their involvement in EITI
highlights the feeling of companies that they have a responsibility to make this
happen. At present, 40 of the world’s largest oil, gas and mining companies
support and actively participate in the EITI process – through their country
operations in implementing countries, through international-level commitments,
and through industry associations. In addition, the EITI is supported by
80 institutional investors who collectively manage assets in excess of
US $14 trillion.
Supporting companies are required to publicly declare their support for the EITI
and help to promote the initiative internationally and in countries where they
operate. However, some companies, often working collectively, have gone
beyond this. They have educated their staff, their shareholders and the media on
the importance of the EITI; they have published country-by-country data in their
global reports; they have advocated for disaggregated data in countries; and they
have helped other companies, government officials and civil society to make
good sense of the data.
The company supporters of the EITI are diverse. Most of the major publicly
listed international oil and gas companies are supporters, but we also have the
support of progressive national companies such as StatOilHydro (Norway),
Petrobras (Brazil) and PEMEX (Mexico). The major mining companies are also
well represented, and are well organised behind the industry association,
the International Council for Metals and Minerals. These alone represent 18 of
our supporters.
Supporting companiesAlcoa
Anglo American
AngloGold Ashanti
ArcelorMittal
Areva
Barrick Gold
BG Group
BHP Billiton
BP
Chevron Corporation
ConocoPhilips
DeBeers
Eni
ExxonMobil
Freeport-McMoRan Copper & Gold
Gold Fields
Hess Corporation
Lihir Gold
Norsk Hydro
Katanga Mining Limited
Lonmin
Marathon
Mitsubishi Materials
Newmont
Nippon Mining & Metals
Oxus Gold
OZ Minerals
Pemex
Petrobras
Repsol YPF
Rio Tinto
Shell
StatoilHydro
Sumitomo Metal Mining
Talisman Energy
Teck Cominco
TOTAL
Vale
Woodside
Xstrata
20
The role of companies in the EITI
21
We know that our position as the leader in the steel
industry brings unique responsibilities. The EITI's
principles regarding the prudent use of natural
resources, transparency, accountability, and
stakeholder dialogue complement ArcelorMittal's own
corporate values and Corporate Responsibility policies.
LAKSHMI MITTAL, CHAIRMAN AND CEO, ARCELORMITTAL
It is easy to agree with the twelve principles underlying the EITI. That the
wealth generated by the exploitation of natural resources will lead to
sustainable development and be an engine for the reduction of poverty
is a goal to which all parties must help to achieve.
ANTONIO BRUFAU, CEO, REPSOL YPF
Becoming an EITI supportingcompanyThe EITI Secretariat has developed a
number of materials for engaging new
supporting companies – both for
extractive and also non-extractive
companies: the two-page ‘How
extractive companies can support the
EITI’ and ‘How non-extractive companies
can support the EITI’ brochures are
available at www.eitransparency.org/
companyimplementation. For more
information on how the EITI is
implemented by supporting companies,
please read the EITI Business Guide
available at www.eitransparency.org/
document/businessguide.
If, for example, members of one of ourhost governments pocket the revenueswhich we generate, rather thanspending them for the public good,it simply is not enough for us to denyall responsibility. Whilst we may notbe technically responsible, manypeople will view us as complicit ifwe remain silent.
[The EITI] is intended to guardagainst embezzlement, increaseaccountability and to lead to a widerdebate about the use to which thesetime-limited revenues are put. It isnot a silver bullet for dealing with allcorruption but it is beginning toproduce some worthwhile results.CYNTHIA CARROLL, CEO,
ANGLO AMERICAN PLC
AN
GLO
AM
ERICA
NPLC
Emerging markets and the EITICommitment to transparency andanti-corruption is a value inherent toPetrobras’s corporate governance andculture that goes beyond fulfilling legalobligations. For instance, even beforethe EITI existed, Petrobras had beenpublishing payments to the governmentin Brazil and abroad.
Petrobras has been engaged with theEITI since 2005 when it was invited totake part in the International AdvisoryGroup (IAG). As an EITI Board member,Petrobras has also committed to spreadthis initiative to other companies and towork with host governments that have
decided to go through the EITIimplementation process.
The company’s policies and practiceson transparency led to Petrobras beingin the top quartile on the 2008 Reporton Revenue Transparency for Oil andGas Companies. Moreover, as a publiclytraded company controlled by theBrazilian government, transparency hasbeen a key element for Petrobras toachieve an improved investment level,and to attract investors and partnershipto develop the huge opportunitiespresent in our portfolio.MILAS DE SOUSA, PETROBRAS
PETR
OB
RA
SR
OYA
LD
UTC
HSH
ELL EITI and contributing to sustainable
developmentFor Shell, contributing to sustainabledevelopment means helping meet theworld’s growing energy needs ineconomically, environmentally andsocially responsible ways. In short,helping secure a responsible energyfuture.
While it is important to secure thedemand side of the energy equationresponsibly, it is equally important toensure that the revenues associatedwith hydrocarbon exploration benefitcitizens of those countries rich in naturalresources. While energy prices havebeen volatile, they are nonethelesshigher than in the past, representing a
good opportunity for governments touse those funds to increase access tohealth, education and poverty reductionmeasures.
The relevance of the EITI forcompanies wishing to contribute todevelopment in a wider society isthat the publication of payments togovernments provides informationto the public, which can lead to aninformed discussion about the useof revenue from natural resources.Supporting the EITI transformscorporate responsibility from a generaltheory to a specific practice, which isa very valuable contribution tosustainable development.ROYAL DUTCH SHELL
“
“
22
Supporting financial institutionsand international organisationsAfrican Development Bank (AfDB)
Asian Development Bank (ADB)
European Bank for Reconstruction
and Development (EBRD)
European Investment Bank (EIB)
International Monetary Fund (IMF)
World Bank Group
United Nations (UN)
African Union (AU)
International Organisation of
La Francophonie (OIF)
Organisation for Economic
Co-operation and Development
(OECD)
G8 group of countries
International financial institutions play an increasingly important role in supporting
the EITI. Several major international financing institutions support the EITI,
including the Asian Development Bank, African Development Bank, European Bank
of Reconstruction and Development, European Investment Bank, International
Monetary Fund and World Bank Group. These organisations are active in providing
technical assistance to implementing countries and outreach to resource-rich
countries. A number of these organisations have committed to mainstreaming
the EITI in their lending activities and there is a growing interest in exploring the
potential for harmonisation of EITI standards and requirements. To this end, the EITI
International Secretariat hosted a conference on the role of international financial
institutions and credit and investment insurers in the Extractive Industries
Transparency Initiative in Athens in October 2008. Below are statements from
some of our key supporters in the international community about the EITI and
our work together.
International financial institutionsThe European Investment Bank and theAsian Development Bank joined the listof supporting organisations in 2008.“It is widely recognised that while largepublic sector revenues from extractiveindustries hold great potential foreconomic growth and povertyreduction, if transparency andaccountability are weak, extractiveindustries can lead to exacerbation ofpoverty, corruption, and conflict …ADB’s support of this initiative will helpensure that wealth generated fromnatural resources is used to enhance acountry’s economic development.”URSULA SCHAFFER-PREUSS,
VICE-PRESIDENT FOR KNOWLEDGE
MANAGEMENT AND SUSTAINABLE
DEVELOPMENT, ASIAN DEVELOPMENT BANK
ASIA
ND
EVELO
PMEN
TB
AN
KEU
RO
PEAN
INV
ESTMEN
TB
AN
K
Well-managed extractive industries canmake a significant contribution toeconomic development and jobcreation. EIB is convinced that improvedtransparency and accountability in theextractive industries are essentialelements for underpinning economicdevelopment, poverty reduction, andfor political stability in resource-richcountries … EIB will support EITI’s workin resource-rich countries in which theBank operates, by working with itsproject sponsors to introduce greater
transparency and consistency inreporting on payments at a projectlevel. At the same time, EIB will promotethe initiative in its contacts withgovernments and national authoritiesand encourage them to adopt the EITIprinciples for reporting and publishingextractive industry revenues. EIB willalso actively support the work of theEITI International Secretariat basedin Oslo.EUROPEAN INVESTMENT BANK (2008)
Supporting implementation
23
There is no gainsaying the fact thatdiscovery of natural resources in acountry does not automatically translateinto economic growth and sustainabledevelopment. A reason why, for toolong, revenue from natural resources hasbeen the bane of rather than a boon tothe cause of sustainable development.Nearly half of Sub-Saharan Africa’spopulation of 800 million people lives incountries with abundance of oil, gas orsolid mineral resources. The recentcommodity boom allows us to reflectupon the record revenue windfallsfor many countries and the newopportunities and possibilities forchannelling natural resource wealth foraccelerating the fight against poverty,malnutrition, ignorance and disease thatit engenders. It also calls into questionthe macroeconomic environment withinwhich these resources are harnessed.
It is evident that NOW is the time topromote transparency and accountabilityin the natural resources sector, andbegin laying the foundations of
long-term economic growth in Africathat is inclusive and sustainable. TheWorld Bank commends the ExtractiveIndustries Transparency Initiative (EITI).We recognise the crucial and supportiverole that civil society has played in thisimportant area of revenue transparency.We have stepped up our engagementwith about 40 resource-rich countriesacross the world – of which 16‘Candidate’ countries are in Sub-SaharanAfrica – through our involvement withand support to the EITI. By promoting acomprehensive value-chain approach –the EITI++ – we are confident thatresource wealth can be spent effectivelyfor achieving sustainable economicgrowth and reducing poverty.
We look forward to strengthening ourpartnership with the EITI for the benefitof the world’s poor people, both in Africaand beyond.OBIAGELI K. EZEKWESILI,
VICE PRESIDENT, AFRICA REGION,
WORLD BANK
WO
RLD
BA
NK
Public financial management is the oneof the most important instruments forthe creation of capable states in Africa.It enhances the sound implementationof economic policy by influencing theallocation and use of public resources.Transparency is a necessary but notsufficient step towards good publicfinancial management. The GovernanceStrategic Directions and Action Plan for2008-2012 is the African DevelopmentBank’s guide for support to regionalmember countries’ efforts to improvegovernance and fight corruption,including the EITI and the African PeerReview Mechanism.
Transparent reporting of extractiveindustries revenues is essential, as is theentire chain of managing extractiveindustries resources. In addition to theEITI, several complementary initiativeshave evolved to improve governance ofthe extractive industries, including theAfrican Legal Support Facility and theWorld Bank’s initiative to support theentire governance chain. Efforts tosupport tax reforms include initiativessuch as AFRITAC, the International TaxDialogue and the African TaxAdministrators Forum. Regionalorganisations such as the AfricanOrganisation of Supreme AuditInstitutions supervise the implementationof international auditing standards. TheAfrican Development Bank is supportingall these initiatives and striving toensure better complementation andcoordination between them.GABRIEL NEGATU, DIRECTOR, GOVERNANCE,
ECONOMIC AND FINANCIAL MANAGEMENT
DEPT, AFRICAN DEVELOPMENT BANK
AFR
ICAN
DEV
ELOPM
ENT
BA
NK
The EITI Multi-Donor Trust Fund (MDTF),managed by the World Bank, providescountries with grant resources andtechnical assistance to implement theEITI Principles and Criteria. The MDTFenables the Bank to provide technicalassistance to EITI implementingcountries in the establishment ofnational EITI committees, working incooperation with government, privatesector and civil society stakeholders.Donor countries may join the MDTF toassist and fund the Bank’s efforts insupport of the EITI. Current donors (andmembers of the MDTF ManagementCommittee) are: Australia, Belgium,Canada, the EC, France, Germany, theNetherlands, Norway, Spain, and the UK.
The EITI is an important tool in thebroader context of the World BanksGovernance and Anti-CorruptionStrategy. As a result, the Bank also workswith governments on EITI-related issuesthrough its programmes focussing onextractive industries reform, naturalresource management and goodgovernance/anti-corruption. In 2008,the World Bank, the Management
Committee members and theEITI Board/Secretariat signed aMemorandum of Understanding (MOU)outlining the intent and commitmentof the three groups to work togethertowards the achievement of commonobjectives and the establishment ofwhat roles each group could play.In addition, the Bank and the InternationalSecretariat coordinate and cooperateon various levels, through regulardiscussions and joint staff meetingsas well as knowledge and learningactivities.
Anwar Ravat, Program Manager at the WorldBank at the 6th EITI Board Meeting in Athens
24
The United States, other majorcommodity importers, and the exportersas well, all have important economic,security and humanitarian interests inseeing that revenues from oil productionand other extractive industries are wellmanaged. Discovery of large oil reservesshould be a benefit to a poor country,but history shows that the opposite isoften the case. It can lead to fraud,corruption, wasteful spending, militaryadventurism, and instability. That’s whythe work of the Extractive IndustriesTransparency Initiative is so important.
In an effort bring attention to theimportance of transparency work, aswell as the potential of the EITI, I askedthe Foreign Relations Committeeminority staff to examine how the UScan improve its work in this area.Their recently published report,“The Petroleum and Poverty Paradox:Assessing US and InternationalCommunity Efforts to Fight the ResourceCurse”, identifies a number of bilateraland multilateral ways to help reducemismanagement and corruption indeveloping countries enriched by oilrevenues. It urged the G8 industrialised
countries to give transparency andanti-corruption efforts a higher profilein their foreign and economic policiesand to encourage their corporationsand financial institutions to promotedisclosure and financial accountability inoil-exporting nations. It commended thecountries that have signed up for theEITI and recommended that the WorldBank and other aid donors makeanti-corruption and fiscal managementprograms a priority in their lending tooil producing nations.
International objectives for energysecurity, good governance and economicdevelopment reinforce the importanceof the issues before the EITI GlobalConference, and I look forward tofurther progress by all stakeholders.US SENATOR RICHARD LUGAR, UNITED STATES
SENATE COMMITTEE ON FOREIGN RELATIONS
A number of governments, including those of Australia, Belgium, Canada, France,
Germany, Italy, the Netherlands, Norway, Spain, Sweden, the United Kingdom and
the United States, support the EITI. These governments provide essential political,
technical and financial support to the initiative. Country support for the EITI has
continued to grow, as evidenced by the declaration of support from the Energy
Ministers of G8, plus China, India and Korea, issued during the G8 Summit in June
2008. Below are statements from some of our supporting countries regarding the
work of the EITI and the important role it is playing in improving transparency
standards in the extractive industries.
GovernmentsSE
NAT
OR
LUG
AR
,USA
Supporting countriesAustralia
Belgium
Canada
Germany
France
Italy
The Netherlands
Norway
Spain
Sweden
The United Kingdom
The United States of America
Supporting implementation
25
Norway, through its Oil for DevelopmentProgramme (OfD) and through directfinancial support from the Norwegiangovernment, strongly supports the EITIby encouraging all its cooperatingcountries to implement the EITIprinciples. OfD operates in 25 countriesworldwide and its overall aim is to assistdeveloping countries, upon their request,in their efforts to manage petroleumresources in a way that generateseconomic growth and promotes thewelfare of the population in anenvironmentally sustainable way. Goodgovernance and transparency are keyelements that have to be implementedto fight the “resource curse”.
There is also a wider practicalcooperation between our twoorganisations. In Ghana and the WestAfrican region, both OfD and EITItogether highlight the importance oftransparency and good governance inthe development of a sufficient policy.
Both Norway and the EITI wererepresented at the National Forum on Oiland Gas Development in Ghana 2008.The Forum was initiated by thegovernment to ensure open and broaddebate on how Ghana could benefitmost efficiently from the oil and gasresources that have recently beendiscovered offshore of Ghana.
Here, the Norwegian Minister ofDevelopment and Environment, ErikSolheim, together with both the Chairof EITI Board, Peter Eigen, and Prof.Humphrey Assisi Asobie, Chair of NigeriaEITI, were key contributors to the Forum.Subsequently, a declaration waspublished by representatives fromGhanaian civil society groups. The Forumgathered approximately 500 participants,representing a wide range of stake-holders, and addressed overarchingquestions related to petroleum activities.PETTER NORE, DIRECTOR, OIL FOR
DEVELOPMENT, NORWAY
Since the British Prime Minister announcedthe EITI at theWorld Summit on SustainableDevelopment in September 2002, morethan 20 countries have started toimplement the EITI. Until 2007, the DFID,UK, hosted the EITI Secretariat.We continueto provide active support to the EITI, nowthat the Secretariat is in Oslo.
There is a close correlation betweencountries rich in natural resources andcountries with high levels of poverty.Wepromote the EITI in all the resource-richcountries we work in, and provide directsupport for implementation to a number ofthem including Nigeria, Ghana andAzerbaijan.We are supporting outreach incountries such as Indonesia.We also
support the EITI at the international level,both politically, by co-sponsoring lastsummer’s UN Resolution recognising theEITI, and financially, through theMulti-Donor Trust Fund.
Increasing transparency and knowledgeof revenues empowers citizens to holdgovernments to account andmakesmismanagement of funds more difficult.We are committed to supporting the EITIand have established similar schemes inother sectors – construction (CoST), andthe procurement, distribution and supplyof drugs in developing countries (MeTA).MIKE FOSTER, PARLIAMENTARY
UNDER-SECRETARY OF STATE FOR
INTERNATIONAL DEVELOPMENT
Support for EITI is an important part ofGermany’s development cooperationwithin its overall approach to promotegood governance in its partnercountries. In particular, Germany ispromoting good governance in theextractive sector multilaterally (e.g.United Nations, G8) and bilaterally.Germany is an active member of theEITI Board and provides funding for theEITI Multi-Donor Trust Fund and theEITI Secretariat. Germany also offersbilateral support to the implementationof EITI and has resident experts invarious African countries, includingthe DR Congo and the Central AfricanRepublic. In Ghana, the Germangovernment provides assistance tothe Ministry of Finance and Ghana’sEITI steering committee within thewider framework of Good FinancialGovernance. The aim is to establishtransparent, efficient and development-orientated management of revenuesgenerated from the mining sector. TheGerman government also funds a largeEITI training programme to strengthenownership and peer-learning betweenEITI practitioners. Related programmesare underway to test innovativemethods for natural resourcecertification.D. ULLA MIKOTA, DEPUTY DIRECTOR
GENERAL AT THE GERMAN FEDERAL
MINISTRY FOR ECONOMIC COOPERATION
AND DEVELOPMENT
France supports the EITI in many different ways, from funding
technical assistance through the World Bank EITI Multi-Donor Trust
Fund, to providing political support on the international stage
through the Organisation Internationale de la Francophonie.
Serving in a country that has recently committed to the EITI, I have
had the privilege to see first hand that the EITI can be a platform for
change and improved governance.
JEAN-PIERRE VIDON, AMBASSADOR, HIGH REPRESENTATIVE OF THE
FRENCH REPUBLIC TO THE CENTRAL AFRICAN REPUBLIC
BM
Z,GER
MA
NY
OIL
FOR
DEV
ELO
PMEN
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ORW
AYD
FID
,U
K
“
Civil society
26
The work of civil society organisations such as Global Witness, Revenue Watch
Institute and the Publish What You Pay Coalition has been key in bringing the issues
of transparency and good governance to the forefront of international debate, and
largely the driving force behind the creation of the EITI. The continuing participation
of civil society organisations is central to the EITI process. Both international and
national civil society organisations provide essential support to the EITI through
their advocacy, training, monitoring and facilitation efforts.
Supporting organisations include:Catholic Agency for Overseas
Development (CAFOD)
Global Witness
Oxfam
Open Society Institute
Publish What You Pay Coalition
Revenue Watch Institute
Secours Catholique (Caritas France)
Transparency International
In under six years, the ExtractiveIndustries Transparency Initiativehas become a powerful vehicle fornew and universal standards oftransparency in revenue flowsbetween extractive industries andgovernments. The EITI has also spurredmore open and frequent dialoguebetween companies, governmentsand citizens through its mandatorymulti-stakeholder process. Thecombination of increased transparencyand a culture of dialogue together canbring a new level of accountability tothe management of these vital publicresources. In some countries, the EITIhas given citizens their first opportunityto ask questions about the country’scentral economic activity and sourceof government revenue.
The Revenue Watch Institute is afounding member of the EITI. RevenueWatch is strongly committed towidening EITI participation andassisting governments, parliamentariansand, above all, civil society in effectiveEITI implementation. In 2009 RevenueWatch and its colleagues in theworldwide Publish What You PayCoalition will begin a drive to add theUnited States to the growing list ofimplementing countries. The increasedavailability of revenue data is only thefirst step towards securing the use ofnon-renewable resources for the publicgood in the countries where theseresources matter most, but it is avital step and the EITI is central tothis effort.REVENUE WATCH INSTITUTE
REV
ENU
EW
ATCHIN
STITUTE
Supporting implementation
Civil society meeting with Spanish parliamentarians
27
GLO
BA
LW
ITN
ESS In many countries, little information has
been published in the past aboutrevenue payments to governments byextractive companies. As a result, grosscorruption and mismanagement hasgone unchecked. Internationalcompanies, and the governments ofconsumer countries, have too oftenbeen part of the problem. However,the growth of the EITI demonstrates agrowing acceptance that citizens ofcountries rich in oil and minerals areentitled to more accountability for theuse of these revenues. The EITI canensure that full information about oiland mining revenue flows is madepublic. It can also build trust betweencitizen groups, governments andextractive companies. The EITI stillfaces several tests. The Validationprocess must be seen to be genuine.Civil society groups must be free totake part in the EITI without threatsor censorship. Governments andcompanies need to show that theircommitment to the initiative is sincere,deep and ongoing. EITI needs to growbroader, and include the big economiesof Asia and the producers of the MiddleEast. The support of the State of Qatarfor the EITI Conference is a ground-breaking step in this direction. In time,EITI implementation may also need togrow deeper, to include the award ofoil and mining rights, contracts withcompanies, and even the spending ofrevenues. At the same time, countriesthat support the EITI must do more.There is no fundamental reason whythe United States, Britain, Canada andAustralia, all of which have large oil ormineral reserves, cannot join Norway in
implementing the EITI. The EITI is onlythe first step towards ensuring thatthe rewards of natural resources trulybenefit the citizens of the countries thatproduce them. But this step is practicaland possible, and growing numbers ofcountries and companies are choosingto take it.GLOBAL WITNESS
Publish What You Pay (PWYP) membersin resource-rich countries help toimplement the EITI through theirparticipation in the nationalmulti-stakeholder groups. They are alsothe local watchdogs of EITI, often thefirst to capture the realities of EITI onthe ground. Sometimes these effortsput civil society campaigners at risk ofharassment and intimidation, and it iscentral to the credibility of the EITIinternational brand that civil societyactivists are able to work freely andwithout fear of interference or threats.The EITI is a reporting standard, butequally importantly, it is a processthat allows a country to engage in abroader national dialogue on thebetter management of naturalresource wealth for the benefit of itscitizens. This process has led to severalcountries opting for more detailed,‘disaggregated’ financial reporting;the inclusion of forestry in the EITI inLiberia; the monitoring of how miningrevenues are distributed and spent inPeru; deliberations on how to capturesocial and environmental costs inGhana; and a groundbreaking nationalEITI law in Nigeria. At the level ofglobal EITI policy, civil society hasbeen at the forefront of the effortsto establish clear rules for assessinga country’s EITI status through theValidation process.
Going forward, the EITI may needto expand into other areas of theextractive sector where transparencyis crucial, notably the award ofexploration and production rights andthe contractual relationships betweencompanies and states. We are alsoworking to ‘mainstream’ revenuetransparency by promoting regulatorymeasures, including stock-listing rulesand a new global accounting standardfor the extractive industries. Thesemandatory disclosure mechanismscomplement the EITI by strengtheningcompany reporting worldwide andpromoting a level playing field.RADHIKA SARIN, INTERNATIONAL
COORDINATOR, PUBLISH WHAT YOU PAY
PUB
LISHW
HAT
YOU
PAY
GLOBAL ENGAGEMENT � � - - � - � � � - � � � � � � � � �
REGIONAL ENGAGEMENT � � � � � - � � � - � - � � � � � - -G8 ENGAGEMENT � - - - - - - � - - � - - � � � � - -Algeria � - � - - � - - - � - - - - - - - � -Angola - � � - - � - - � � - � - - � � - - -Azerbaijan � � - � - � - - - � - - - - - � � � -Bahrain - - - - - - - - - - - - - - - - � -Bolivia � - - - - - - � - - - - � - - - � � -Botswana � - � - - - � - - - - - - - - - - � -Brunei Darussalam - - - - - - - - - - - - - - - � - - -Burkina Faso � � - - - - - � - � � - - - - � - - -Cambodia - � - - - - - � - - � � - � � - � � -Cameroon � � - - - � - � - � � - - - - � � � -Central African Republic - � � - - � - - - � � - - - - � - - -Chad - � � - - � - - - � � - - - - � - - -China � � - - - - - � - � � - - � - - � - -Chile - - - - - � - - - � � - - - - - - � -Colombia � � - - - � - � - � � - - - - - - - -Congo, Republic of � � - - - � - - - � � - - - - � - - -Côte d’Ivoire � � - - - � - - - - � - � - - � � - -Dem, Republic of Congo � � � - - � � � - � � - - � � � � - -Ecuador � - - - - - - - - - - - � - - � � - -Equatorial Guinea � � - - - � - - - � � - - - - � � - -Gabon � � - - - � - - - � � - - - - � � - -Ghana � � � - - � - � - � � - � � - � � - -Guinea � � � - - � - - - � � - - - - � � � -Indonesia � � - - - � - � - � � - - � - � � � -Iraq � � - - - � - - - - - - � � � - � - -Jordan � - - - - � - � - � � - - - - - � - -Kazakhstan � � - � - � - � - - - - - - - � � � -Kuwait - - - - - - - - - - - - - - - - � - -Liberia � � � - - � - - - � � - - - - � � - -Libya � - � - - - - - - � - - - - - - - - -Madagascar � � � - - - � � - � � - � - - � � � -Mauritania � � - - - � - � - � � - � - - � � - -Mexico � - - - - � - - - - - - - - - - � � -Mongolia � � - � - � - - - - � - - - - � � � -Namibia - - � - - � � - - � - - - - - - - - -Niger � � � - - - - � - � - - - - - � � � -Nigeria � � - - - � - � - � - � � � � � � � �
Norway � - - - - - - - - - - - - - - � - � -Oman - - - - - - - - - - - - - - - - - - -Papua New Guinea � � - - - � � - - - - - - - - - � � -Peru � � - - - � - � - � � - - - � � � � -Qatar � - - - - - - - - - - - - - - - - - -Russia - - - - - - - � - � - - - - - - � � -Sao Tome and Principe � � - - - - - � - � - - � - - � - - -Saudi Arabia - - - - - - - - - - - - - - - - - - -Senegal - - - - - - - � - � � - - - - � - � -Sierra Leone � � � - - � - - - - � - - � - - � � -South Africa � - � - - - � � - - � - � � - - - � -Sudan � � � - - � - � - � � - � � - - - - �
Syria - - - - - - - - - � � - - - - - - - -Tanzania � � - - - � � � - � � - � - - - � - -Timor-Leste � � - - - � � - - � - - � - - � � - -Trinidad and Tobago � - - - - - - - - - - - - - - - � � -Turkmenistan � - - - - - - - - - - - - - - - � - -Uganda � � � - - � � - - � � - � � - � � � -United Arab Emirates - - - - - - - - - - - - - - - - - - -Uzbekistan - - - - - - - - - - - - - - - - - - -Venezuela - - - - - - - - - - - - - - - � � � -Vietnam - - - - - - - � - � � - � - - - - - -Yemen � � - - - - - - - - � - - � - - � - -Zambia � � - - - � � � - - � - � � - � � � -Kyrgyzstan � � - � - - - - - - - - - - - � � - -Mali � � - - - � - � - � - - - - - � - - -Mozambique � � - - - � � � - - - - � � - � � - -Oil/Gas � � � � � � - � - � � - � � � � � - �
Mining � � � � � � � � � � � - - � � � � - �
Public Financial Management - � � - � � � � - � � - � � � � � - -Anti Corruption and Transparancy � � � � - � � � - � � - � � � � � � �
Outreach � � � � - - - � - - � - � � � � � - -Civil Society � � - � - - - � - - - - � � � � � - �
Parliament and political parties � � � - � - � � - � - - - � � � � - �
Media capacity building � � - - - - � � - � - - � � � � � - -Conflict reduction - � - - - - - � - � � - - � � � - - �
Subnational Revenue flows � � � - - � - � - - � - - - - � � - -Corporate Social Responsibility - � � � � - � � - - � - - � � � - - �
This table is an overview of the support the EITI receives from countries and organisations. It is the result of a survey the EITI International Secretariatconducted in 2008, asking EITI supporters to identify the different ways in which they support the EITI. Please note that the table is indicative only and isnot exhaustive. It does, however, illustrate the wide extent of support the EITI receives. The Secretariat hopes the table will provide stakeholders with anindication of who to approach when engaging in EITI activities to better facilitate coordination between groups.
EITI
Secr
etar
iat
Wor
ldBa
nk
AfDBEBRD
EIB IMF Australia
CanadaEuropean Commission
FranceGermany
The Netherlands
NorwayUK United States
PWYPRWI
TI Oxfam
THEM
ESO
THER
RESO
URC
E-RI
CHCO
UN
TRIE
S
OTHER INTERNATIONALFINANCIAL INSTITUTIONS
BILATERAL SUPPORTINGCOUNTRIES/AGENCIES
CIVIL SOCIETYORGANIZATIONS
28
WHO’S WHERE IN THE WORLD OF EITI SUPPORT
29
Looking forwardEITI – global minimum standard, a catalyst for change
1Deepening implementationA key EITI priority will be to continueassisting EITI-implementing
countries in achieving Validation oftheir EITI programmes and moving fromCandidate status to Compliant status;
2Widening implementationReaching out to countries that havenot yet committed to implementing
the EITI will also remain at the core of EITIactivities. These efforts to increase thenumber of participating countries willneed to be enhanced by garneringgreater support from companies, partnercountries and civil society organisationsworldwide. Increasing the participation ofinstitutions based in large emergingmarkets is a key priority;
3Developing the EITIThe EITI Board writes in its forewordto this publication that the EITI is
best served by a close focus on theagreed agenda reflected in the EITIprinciples and criteria. Beyond this focusthe Board feels encouraged that the EITI,in country after country, provides aplatform also for broader debates aboutthe management and use of revenuesderived from natural resources. In thisway, implementation of even the globalminimum requirements of the EITI oftenbecomes a cornerstone for broaderreforms. The EITI InternationalManagement can and will do more to
facilitate the sharing of good practiceand experiences from progressiveimplementation between partners.
In 2008, the World Bank launched aninitiative that was initially called EITI++.While this initiative is separate from theEITI, we value this important effort as alogical companion to the work of EITI:it is a manifestation of the World Bank’sdesire to offer its member countriessupport all along the extractive industrydevelopment chain. The World Bank’ssupport to countries implementing theEITI through the EITI Multi-Donor TrustFund will remain unaffected. Alongsidethis support of EITI implementation,the Bank also plans to provide technicalassistance to partners in the processof granting concessions, monitoringoperations, and also in revenue allocationand spending. The EITI welcomesincreased support to sound naturalresource management. It is alsorecognises that allowing the initialuse of the term EITI++ may havecontributed towards confusion.
As we learn more from theimplementation of the EITI, there will be aneed to consider the initiatives guidanceon issues such as company-by-companydisaggregation and on materiality. Wewill, in short, become a resource centre ofboth academic and empirical informationto improve natural resource management.
It is of vital importance that themomentum built up during 2007-09 is
maintained into the future if the EITI is tobecome the mainstream global standardin the extractives industry. By ensuringthat EITI countries get the support theyneed, through expanding awareness andsupport of EITI principles among relevantgroups, and by ensuring that themaximum benefits of EITI are beingrealised, the EITI can continue to be aneffective catalyst for change in the yearsto come.
With the foundations of the EITI firmly in place and 24 countries implementing the EITI, we remain ambitious towards the
ultimate goal of having the EITI “mainstreamed”, with its criteria and principles becoming the standard way of working in all
the relevant extractive industries. Three main objectives have been identified which will be key to ensuring that the EITI
reaches its full potential:
30
Expanding the EITIOutreach to new partners
The EITI International Secretariat engages in direct, high level advocacy. It also relies
on and encourages supporters to use their diplomatic and commercial influence in
support of EITI principles. In setting priorities for its outreach work, the Secretariat
considers the following:
• Does a country have challenges with respect to resource revenue transparency
(weak capacity, perceptions of corruption, conflict, etc) and risks associated with
what may be described as a resource curse;
• Does the country have a government that is welcoming and eager to discuss EITI
implementation including meaningful engagement with civil society
organisations; and
• Is the country strategically important, such as a major emerging economy or in
an otherwise strategically significant region?
Looking ahead, a major focus of outreach work is strengthening engagement with
emerging economies, particularly China and Indonesia. Further outreach work is
needed in Brazil, Mexico, South Africa and India. At all times, the Secretariat
maintains a close working relationship with other supporting governments and
organisations, and seeks to respond effectively to outreach opportunities that arise.
Cooperating with governmentand companiesAs the fastest growing consumer ofenergy and mineral commodities,China is a major actor in naturalresources markets. The ChineseGovernment and its state-ownedcompanies have followed a strategyaimed at meeting with its mountingenergy and mineral commoditiesneeds. China has implemented thisstrategy in varied ways, from traditionalforeign investments to providinginfrastructure development inexchange for natural resources. TheChinese Government has issued cleardirectives for its companies to ensurethat they are socially responsiblecorporate actors. In June 2008 inAomori, Japan, China, together withKorea, India and the G8, signed adeclaration endorsing the EITI. TheEITI Secretariat, together with partnerorganisations and supportinggovernments such as the UnitedKingdom, Norway and the RevenueWatch Institute, will continue its effortsto engage Chinese authorities andcompanies to advance the agenda oftransparency, especially in thosecountries that are key to China’s needs.Chinese companies are alreadyreporting within the EITI framework incountries such as Gabon and Mongoliaand the Secretariat remains committedto working with Chinese stakeholdersto further this collaboration.
CHIN
A
EITI Chairman Peter Eigen meets with Iraqs Deputy Prime Minister and Minister of Oil
31
Engagement in the world’s largest oilproducing regionAn estimated 66% of global oil reservesare in the Middle East and North Africa.There are considerable efforts in theregion to improve security of energysupplies, increase transparency, andto open up markets for inward andoutward investment. To date, Yemen isthe only EITI Candidate Country in theregion, though the Government of Iraqofficially committed to becoming anEITI implementing country. In Iraq,the significant security and politicalchallenges, as well as regional tensions(especially around the oil sector) andlow government capacity, will make theinitiative both more difficult, but alsomore important, to implement. Iraq hastherefore been a particular focus of theEITI's outreach efforts. Peter Eigen andthe International Secretariat held talkswith Deputy Prime Minister, BarhamSalih, and Minister of Oil, Husaynal-Shahristani, in Baghdad in November2008. The hosting of the 2009 EITI Global
Conference by the Government of Qataris acknowledged as a major contributionto the initiative and Qatar Petroleum hasrecently become an EITI supportingcompany.
Within the North African countries,a key step in engagement with the EITIwas the Mediterranean Roundtable,co-hosted by the EITI Secretariat andthe African Development Bank (AfDB) inTunis in November 2008. It provided aplatform for senior government andcompany representatives from NorthAfrican countries (Morocco, Tunisia,Algeria, Egypt and Sudan) to meet withNorthern partners (France, Italy, Spain,Norway), to discuss the opportunitieswhich the EITI can bring for furtherenhancing resource management,economic growth, and secure energysupplies in the region. For most it wastheir first significant engagement in theinitiative, and many outlined concretefollow-up steps. The EITI InternationalSecretariat and the AfDB will supportand encourage these efforts.
Expanding membership in the regionAlthough not as dominant as in otherparts of Africa, natural resources are avery significant part of the economiesin Eastern and Southern Africa. TheInternational Secretariat has visitedBotswana, Ethiopia, Mozambique,Namibia, South Africa, Tanzania, Uganda,and Zambia to discuss the benefits ofthe EITI with the governments andstakeholders. With the support of theWorld Bank and African DevelopmentBank, many of these countries havemade considerable progress. Zambia,Mozambique, and Tanzania, all held
EITI launch workshops in 2008 and areexpected to complete EITI sign-up inthe coming months. The InternationalSecretariat has sought to establish theEITI among the standards and codesused in the African Peer ReviewMechanism (APRM). The Uganda APRMreport includes a recommendationto implement the EITI, and there wassignificant coverage of NEITI in the APRMreport for Nigeria. The Commission of theAfrican Union is now recommendingEITI implementation to its resource-richmember countries.
SUB
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AM
ERICA
Strong support from companies,growing interest from governmentsLatin America is rich in minerals andenergy resources and continues to bean important region in global naturalresource markets. Brazil’s newlydiscovered deep-waters oil reservoirsare deemed to be one of the worldlargest oil fields. At present, Peru is thesole EITI implementing country in theregion, while Colombia and Trinidadand Tobago have expressed theirinterest in joining the EITI. Bolivia alsodemonstrated its support throughbacking the passage of a UNresolution by the General Assemblydeclaring support for the EITI. At thesame time, countries such as Boliviaand Ecuador have gone through asignificant reshaping of theirinstitutional frameworks and energysectors making EITI engagementdifficult at this stage. Venezuela hassought to follow an independentpolicy and it is yet to considerassociating with internationalinitiatives such as the EITI. Manycompanies with considerableoperations in the region are strongsupporters of the EITI, includingPemex and Petrobras, which serveon the International EITI Board.
32
MiningDeepening the EITI
At present, 14 Candidate countries are implementing the EITI in the mining sector,
while 58% of the companies supporting the EITI are from the mining industry. The
EITI methodology makes no distinction between mining and hydrocarbons, though
the economic significance of the oil and gas sectors can often overshadow the
mining sector in some countries. In fact, a consultation with mining stakeholders in
2006 showed that they felt the mining sector to be lagging behind in the EITI. Later,
the International Advisory Group, recognising this, recommended that “the EITI
should paymore attention to the specific context of themining sector”. The EITI
International Secretariat has worked with more than 20 stakeholders in identifying
and discussing those specific issues that distinctly affect the mining sector. The first
output from these consultations is the publication Advancing the EITI in theMining
Sector, to be launched at the EITI International Conference in Doha, Qatar. This
volume compiles valuable lessons from ten case studies and discussions from civil
society, companies and implementers on how to improve the application of the
EITI process in the mining sector.
The case for the EITI in the mining sector continues to be strong. The EITI is a
platform to address how revenue management, both at local and national level, is
conducive to growth and sustainable development. The EITI, together with other
initiatives such as the Global Reporting Initiative (GRI), the Kimberley Process, and
the Voluntary Principles (VPs), reinforces efforts to alleviate the negative
environmental and social impacts of mining.
We are deeply committed to the value of
productive partnerships, and the EITI
can serve as a platform for building trust
within civil society that governments,
companies and local authorities are
working together to ensure that mining
revenues contribute to broader-based
social and economic benefits.ANTHONY HODGE, PRESIDENT, ICMM
“
33
In Newmont’s first engagement withEITI in Ghana in 2003, communitystakeholders and local authorities notedin passing the importance of the EITI’sprimary aim in publishing the amount ofroyalties paid by mining companies tocentral government. However, they veryquickly moved on to the need for anopen, transparent and efficient systemof knowing how much was due to bereturned to the local communities, whenand how it would be paid, and what itwould be used for. Subsequently Ghana
became a leader in implementing asub-national template and reportingsystem within its EITI programme.Newmont is now working with civilsociety organisations, local governmentand traditional authorities in the BrongAhafo region where the companyoperates to make the local reportingas robust and as open and efficient asour system for reporting nationalgovernment payments.NEWMONT MINING CORPORATION
Indonesia is the world’s most populousextractives-rich state. It has bothsignificant mining and oil and gassectors. The process of consideringadherence to the EITI has been anextended and patient one. Differentstakeholders, especially in thegovernment, have led the discussionsabout what the EITI could bring toIndonesia. Initial concerns thatdeveloped countries were not fullyimplementing (as opposed tosupporting) the EITI have beenovercome, as the governmentconcluded that the EITI is in itselfa useful tool for Indonesians.Reform-minded officials have led thedeliberations reaching this conclusion,and an official announcement isexpected in the near future. No doubtmuch remains to be done in Indonesiato implement the EITI, but bringingIndonesian stakeholders togetherto make it work will undoubtedlybenefit the nation, including itspoorest citizens.
GH
AN
A IND
ON
ESIA
“Advancing the EITI in the Mining Sector” is a report from consultations with mining stakeholders andwas launched in February 2009.
34
Genuine transparency must beassessed by the existence,completeness and accuracy ofpublished data and its full access toeveryone, anywhere and at any time.The successful implementation of theEITI is therefore heavily dependent onthe quality of communication.To achieve this, a dynamic website hasbeen set up for the EITI Madagascar to:• publicise the EITI Madagascar at
national, international, regional orcommunity levels;
• inform the widest possible publicabout the EITI;
• communicate reliable and timelydata on the activities of theextractive industry includinglicenses, types of minerals, quantityand quality extracted, miningroyalties, etc.;
• enable online discussion among allparties; and
• provide a tool for monitoring andevaluating participation in theprocess.
Much of this information and the WorkPlan EITI Madagascar (in French andEnglish versions) are available on thewebsite of Madagascar: www.eiti.mgRAMILISON HARIFIDY, MADAGASCAR EITI
Most national EITI programmes have their own websites. While many countriesimplementing the EITI have low levels of internet usage, a national EITI website canstill be useful in order to make information available to media organisations, provideinformation to international stakeholders who are interested in a country’s EITIprogress, and act as a public repository of key documents relating to a country’s EITIprocess. Links to these national websites can be found on the EITI Internationalwebsite www.eitransparency.org.
Communications
Creating disclosure of revenue streams is in itself meaningless unless there is public
awareness and understanding of what the figures mean. Effective communication
is therefore a crucial element of the EITI process, and a requirement in the EITI
Validation methodology.
This question of how to communicate the results of the EITI has become more
important as implementing countries are producing EITI reports and reaching a
more advanced stage of the EITI process. These countries have undertaken a range
of activities to disseminate the findings from the EITI.
Countries in the early stages of EITI implementation are also thinking strategically
about how to communicate in order to secure participation by all stakeholders and
to engage constructively with them. To make this happen, they aim to consult
widely and early on with all groups. In order to facilitate this process many EITI
countries have established a sub-group of their main multi-stakeholder steering
group to specifically focus on communications issues; developed a communications
plan; and appointed a person to work specifically with communications.
MA
DA
GA
SCAR
WW
W
The EITI has helped reduce the
distrust and hostility that existed
between the government, the
mining and forestry companies and
the affected communities in Liberia
… I therefore see Liberia’s EITI
communications strategy as part
of Liberia’s wider natural
conflict-reduction strategy.ELLEN JOHNSON-SIRLEAF,
PRESIDENT OF LIBERIA
“
EITI International websiteKeeping stakeholders constantlyinformed is a key challenge andresponsibility of the InternationalSecretariat. Our website,www.eitransparency.org, waslaunched in November 2007, havingbeen hosted by the World Bank forthree and a half years. The site receiveson average over 7,000 visitors amonth. This is testament to how muchpeople rely on it for clear information,guidance and news about the EITI.The Resource Centre menu leads to acomprehensive list of our mainpublications as well as a researchlibrary about revenue transparencyand extractive industries. In late 2008,we developed French and Russiantranslations of all the major pages.
35
Good communications is central tothe EITIExternal communication is critical forwidening and deepening supportfor the EITI internationally. Strongcommunications has multiple benefits.First, it raises awareness andunderstanding of the initiative.Second, it guides and improves onimplementation. Third, it assures creditto those stakeholders who are activelysupporting the process and providesan incentive for others to do so.The EITI International Secretariathas developed a three-yearcommunications strategy to achievethis. It is intended to bring an overallvision to our communication work andhelp us to set priorities. We set out ourmessages, stakeholders, audiences,communication materials and channels,priorities, resource implications,risks/mitigations, and some successcriteria. The International Secretariathas brought together an EITICommunications Advisory Group toadvise them on delivering this strategy.
EITI International NewsletterThe bimonthly EITI Newsletter has over1,000 subscribers who wish to followdevelopments in the EITI community.The Newsletter seeks to inform itsreaders about the key issues andchallenges facing revenue transparencyin the extractive sector and upcomingactivities, events and materials. Thenewsletter is produced in English andin French. To sign up to the newsletter,visit www.eitransparency.org
“Talking Transparency: A guide for communicating the EITI” was launched in February 2009. It is a tool for nationalEITI secretariats and other EITI stakeholders who are involved with communicating the EITI to a national audience.
36
Research
The activities of the EITI receive considerable attention in academic and
development circles. Initially, the innovative multi-stakeholder character of the
initiative was a key area of interest. It is the need to gauge its developmental
impact, however, that has now become the focus of researchers’ attention. The EITI
International Secretariat has used its small research budget to commission studies
on exploring the links between adherence to EITI principles and broader
developmental, governance and business climate indicators. Two studies looked at
how the EITI could be extended to small-scale mining operations and the
cooperation of Chinese companies in EITI implementing countries—the latter was
commissioned to the Centre for Chinese Studies at Stellenbosch University in South
Africa. Additionally, we have commissioned small pieces on the impact of EITI in
lending requirements, mapping-out companies in countries with significant mining
and hydrocarbon reservoirs, and on the implications of changing economic
conditions on the future of the transparency agenda. Similarly, the Secretariat
collaborates with numerous external research projects and academic interests in the
functioning and impact of the EITI. Universities in Paris, Gothenburg, Oslo, Princeton
and elsewhere are conducting research on EITI-related topics. The Secretariat
welcomes this great interest and will continue to work together with research
partners on improving the EITI model. Please visit www.eitransparency.org/research
to see more on the research activities of the EITI and its partners.
The EITI’s growing roleIn an EITI-commissioned paper,“Implications of the ChangedInternational Conditions for EITI”,Professor Paul Collier (author ofThe Bottom Billion: Why the PoorestCountries Are Failing andWhat Can BeDone About It) draws important linksbetween the EITI's guiding principlesand three main shifts in internationalattitudes: awareness of climate change,awareness of growing energy scarcity,and the geo-political implicationsof the current financial crisis. Heconcludes that "the financial crashhas considerably increased publicrecognition of the importance ofinternational cooperative regulation inasset markets … the EITI can surelybuild on this shift in public perceptionsby making the analogy". In short,he states that the need for moretransparency and open scrutinythroughout the natural resourcesmanagement chain has never beengreater. The full paper can be found atwww.eitransparency.org/research
37
EITI governance, management and administration
The EITI has evolved from an idea intoan initiative with detailed rules andprocedures. The governance of the EITIitself has also evolved: following theInternational Advisory Group’s reportingto the Global Conference in Oslo in 2006,the EITI International Board and EITIInternational Secretariat were bothestablished. Since 2006, the EITIInternational Board has further refinedthe structure and is proposing that thecurrent structure of the EITI Associationas a not-for-profit organisation underNorwegian law, be altered to includemember countries and supporters.As a result, a new and expanded EITIAssociation is set to be adopted at the
Doha Conference in February 2009.The new arrangements will provide
for the EITI to continue to hold a globalconference once every two years, bringingtogether all stakeholders. Alongside theseconferences, a smaller Members’ Meetingwith the three constituency groups –countries (implementing and supporting),companies (including institutionalinvestors) and civil society organisations –will take place, with all groups equallyrepresented. The main task of theMembers’ Meeting will be to appoint anEITI International Board for the next twoyears. Between the global conferences,the EITI International Board will continueto oversee the Initiative. The Board has
20 members, with the differentconstituencies being entitled torepresentation. The Chairman, currentlyPeter Eigen, should be independent.All implementing and supportingcountries are entitled to be membersof the EITI Association. It is up to therespective constituencies to agreeamong themselves their membershipof the Association and who they wishto nominate to the Board.
The EITI International Secretariat willcontinue to operate as a not-for-profitorganisation under Norwegian law, nowas part of the new Association.
EIT MULTI-DONORTRUST FUND
(administered bythe World Bank)
Civil societyorganisations
Implementing andsupporting countries
EITI CONFERENCE
(every 2 years)
(Key decision-making body forEITI – meets about 3 times a year)
EITI BOARD
INTERNATIONALSECRETARIAT
(based in Oslo)
STAKEHOLDERS
Companies andinvestors
Including Members’ Meetings
38
The EITI Board 2006-2008
Dr Peter Eigen, Chair
Implementing Countries
Prof Humphrey Assisi AsobieChairman of NEITI, Nigeria
Madikaba CamaraMinister of Finance, Guinea
Alternate: Bolat AkchulakovVice Minister, Ministry of Energy and MineralResources, Kazakhstan
Kairat DjumalievHead, Energy and Mineral Resources Dep.,Office of the Prime Minister, Kyrgyz Republic
Shahmar MovsumovExecutive Director, State Oil Fund, Azerbaijan
Alternate: Alfred Bagueka AssoboHead of EITI Tech. Sec., Ministry of Economyand Finance, Cameroon
Fidéle NtsissiDirector of Cabinet, Gabon
Alternate: Dr Akoto OSEIDeputy Minister for Finance and EconomicPlanning, Ghana
Supporting Countries
Stephen GalloglyDirector for International Energy andCommodity Policy, State Dep., United States
Alternate: Sonja LitzDirector Governance and Anti-CorruptionGroup, AusAID, Australia
William KingsmillActing Director, Policy & Research Division,DFID, United Kingdom
Alternate: Kamilla KolshusSection for Human Rights, M. of Foreign Affairs,Norway
Jean-Pierre VidonAmbassador, Fight Against Organised Crime,Ministry of Foreign Affairs, France
Alternate: Ingrid Gabriela HovenFederal Ministry for Economic Cooperation &Development, Germany
Civil Society Organisations
Anton ArtemyevKazakhstan RevenueWatch
Alternate: Radhika SarinCoordinator, PublishWhat You Pay
Bennett FreemanOxfam America/Oxfam International
Alternate: Michel RoyInternational Advocacy Director of SecoursCatholique
Gavin HaymaGlobalWitness
Alternate: Gilbert MaoundonodjiCoordinator, GRAMPTC
Dr Carlos MongeGrupo Propuesta Ciudadana
Alternate: Kalia MoldogazievaDirector, Human Development Centre Tree ofLife – Kyrgyz Republic
Christian MounzeoCoordinator PWYP Congo/Pres. RencontrePour la Paix les Droits de l’Homme – Congo
Alternate: Ingilab AhmadovDirector of the Public Finance MonitoringCentre in Baku, Azerbaijan
Companies
Pedro E. AguirreCoordinator, Pemex
Alternate: Mr Milas Evangelista de SousaPetrobras
Edward BickhamVice President External Affairs, Anglo-American
Alternate: Olivier LoubièreCorporate Business Ethics Advisor, AREVA
Dr John KellyCoordinator, Planning and Issues UpstreamPublic Affairs, Exxon Mobil
Alternate: Stuart BrooksManager, International Relations, Chevron
Dr R. Anthony (Tony) HodgePresident, International Council on Mining andMetals
Mike WilkinsonVice President Sustainable Development, Shell
Alternate: Jean Francois LassalleVice President of E&P Public Affairs, Total
Karina LitvackHead of Governance & Socially ResponsibleInvestment, F&C Asset Management
Alternate: Julie McDowellHead of Socially Responsible Investing,Standard Life Investments
The EITI Board at their meeting in Oslo
39
The EITI Secretariat
Adil MammadovState Oil Fund of Azerbaijan Republic,AzerbaijanE: [email protected]
Alfred Bagueka AssoboEITI Cameroon, CameroonE: [email protected]
Robert MoïdokanaTechnical Secretary, Central African RepublicE: [email protected]
Koffi N’DriCabinet du Ministre de l’Economie et desFinances, Côte d’IvoireE: [email protected]
Jean-Pierre MutebaPresident Technical Committee, DRCE: [email protected]
Francisca Tatchouop BelopeDirectora General – Jefe de Gabinete Ministeriode Hacienda y Presupuestos, Equatorial Guinea
Fidèle NtsissiCoordinateur ITIE, GabonE: [email protected]
Franklin AshiadeyMinistry of Finance and Economic Planning,GhanaE: [email protected]
Mamadou DiabyEITI Guinea, GuineaE: [email protected]
Bolat AkchulakovMinistry of Energy and Mineral Resources,KazakhstanE: [email protected]
Kairat DjumalievKyrgyz RepublicE: [email protected]
T. Negbalee WarnerHead of the LEITI Secretariat, LiberiaE: [email protected]
Ramilison HarifidyMadagascar EITI, MadagascarE: [email protected]
Sidi Mohamed ZouboyePermanent Secretary, MaliE: [email protected]
Sidi Ould ZeineMauritaniaE: [email protected]
Shar TsolmonMongolia EITI Secretariat, MongoliaE: [email protected]
Abdoul Aziz AskiaITIE Niger, NigerE: [email protected]
Haruna SaeedNEITI, NigeriaE: [email protected]
Jose LuisCarbajalPeruE: [email protected]
Florent Michel OkokoMinistere de l’Economie, Republic of CongoE: [email protected]
Genoveva CostaMinistério dos Recursos Naturais e MeioAmbiente, São Tomé and PríncipeE: [email protected]
Kenei LaminMinistry of Presidential Affairs, Sierra LeoneE: [email protected]
Manuel de LemosSecretariat of State for Natural Resources,Timor-LesteE: [email protected]
Mohammed Al-NajarYEITI, YemenE: [email protected]
Jonas Moberg, Head of Secretariat
Eddie Rich, Deputy Head/Regional DirectorImplementation and Outreach inAnglophone/Lusophone Africa and MiddleEast, and Stakeholder relationsE: [email protected]
Samuel R Bartlett, PhD, Regional DirectorImplementation and Outreach in Asia,and ValidationE: [email protected]
Tim Bittiger, Regional DirectorImplementation and Outreach inFrancophone AfricaE: [email protected]
Sofi Halling, InternE: [email protected]
Leah Krogsund, Executive SecretaryContact with Head of Secretariat,Jonas Moberg, and Board logisticsE: [email protected]
Anders T KråkenesCommunications ManagerRequests for interviews, media enquiries,website, publications, use of logoE: [email protected]
Christine NowakChairman’s Office ManagerContact with Chairman of the EITIE: [email protected]
Francisco Paris, PhD, Regional DirectorImplementation and Outreach in Latin America,Caribbean, China and Equatorial Guinea, andMiningE: [email protected]
Ingvill Rørvik, InternE: [email protected]
Pablo Valverde, Conference ManagerThe 4th EITI International ConferenceE: [email protected]
National EITI CoordinatorsThe National EITI Coordinators met in October 2008
40
How we are funded
The funding of the internationalmanagement of the EITI reflects itsmulti-stakeholder support. AboutUS $3m a year covers the salaries andassociated costs for a team of six to ninestaff, a small Chairman’s office, Boardmeetings, travel and conference costs,consultants, and communications.This budget is raised from all thesupporters of the EITI according to afunding formula. The principles ofthe funding formula are as follows:
1The private sector and supportingcountries share the principle
responsibility for the internationalmanagement costs of the EITI with thesupport of civil society organisationsand the host government, Norway.The companies and supportingcountries should pay the same.
2The costs of the Validation are tobe met by the governments of
the countries being validated.
3The Board will ensure that no singleconstituency or single stakeholder
dominates the level of funding.
Based on these above principles, thecharts below show how the costs ofthe EITI international managementhave been, and are due to be, funded.A considerable effort went intowidening the funding base in2008. We received funding from35 organisations and countries,up from 19 in 2007. Furtherwidening is planned for 2009.
These efforts are funded from awide range of sources, including theimplementing country governments,the World Bank-administered Multi-donor Trust Fund and other multilateralagencies, and bilateral developmentagencies.
The EITI also receives a considerablenumber of EITI off-budget and in-kindsupport, such as the funding of ameeting of all the National Coordinators
in Oslo in October 2008, the translationof the Business Guide, three trainingseminars for the multi-stakeholdergroups from implementing countries,and much of the preparations for theDoha Conference.
Private sector 40%Oil and gas companies 26%Mining companies 13%Institutional investors 1%
Supporting countries and NGOs 40%Supporting Countries 37%NGOs 3%
Government of Norway 20% Staff and associatedcosts 48%
Office, administration andBoard meeting costs 10%
Sources of funding Allocation of funding
1. These figures are indicative only. Audited accounts and budgets are available on www.eitransparency.org
2. These figures do not cover the considerable costs of funding the EITI at the national level. In Nigeria, for example, the NationalSecretariat has around 20 people. In other countries, it is much smaller.
Implementationsupport 18%
Outreachsupport 9%
EITI conferences 9%
Communications 3%
Contingency 3%
Drilling DownA civil society guide to the EITI(by RWI)www.eitransparency.org/civilsocietyimplementation
EITI Business GuideHow companies can supportimplementation of the EITIwww.eitransparency.org/document/businessguide
Implementing the EITIApplying early lessons from thefield (by theWorld Bank)www.eitransparency.org/document/implementingtheeiti
EITI Guide for LegislatorsHow to support and strengthenresource transparencywww.eitransparency.org/parliament
Talking TransparencyA guide for communicating the EITIwww.eitransparency.org/communication
EITI Source BookA guide to assist countries that areimplementing the EITIwww.eitransparency.org/document/sourcebook
EITI Rule Bookincluding Validation Guide
Advancing the EITI in theMining SectorA report from consultations withmining stakeholderswww.eitransparency.org/mining
FACT SHEETS are shortdocuments explaining elementsof the EITI policy:
EITI Fact Sheetwww.eitransparency.org/document/factsheet
How to support the EITI –Extractive Companieswww.eitransparency.org/companyimplementation
How to support the EITI –Non-Extractive Companieswww.eitransparency.org/companyimplementation
How to support the EITI –Countrieswww.eitransparency.org/supporters/countries
EITI Endorsementswww.eitransparency.org/document/endorsements
Validation Fact Sheetwww.eitransparency.org/eiti/implementation/validation
EITI publications
Further guidance
This publication brings together theEITI’s requirements for implementingthe EITI. It includes the EITI Principles,Criteria, The EITI validation guideand policy Notes issued by the EITISecretariat, conveying decisionstaken by the EITI Board. It does notchange earlier agreed policies.www.eitransparency.org/document/rulebook
The EITI International Secretariat would like to thank all those who contributed to the
making of this report. From leaders such as President Johnson-Sirleaf of Liberia,
George Soros of the Open Society Institute, and World Bank Vice President, Africa
Region, Obiageli K. Ezekwesili, to EITI national coordinators, company supporters,
civil society partners, and supporting and implementing country governments.
It is the committed efforts of these stakeholders that provide the foundation and
the momentum necessary to make the EITI the global standard for transparency in
the extractive industries. This report contains contributions from over 40 countries,
companies and civil society organisations from around the world and serves to
illustrate the progress EITI’s candidate countries have made with implementation and
validation during the last two years. Input into the progress report has contributed to
the wider discussion of the global challenges and opportunities now facing the EITI.