EITI is at a crossroads
PARIS (TrustLaw) – The Extractive Industries Transparency Initiative (EITI), a standard designed to stamp out corruption in the oil, gas and mineral industries, works to persuade companies to publish what they pay and governments to disclose what they receive.
Eleven countries are now EITI compliant, meaning they publicly report reliable revenue figures. Thirty-five countries are part of the EITI process and are moving towards compliance.
The EITI, however, is at a crossroads and campaigners say it must extend its geographical reach and strengthen its remit in order to stay relevant.
Here are some of the issues facing the EITI:
- Campaigners argue more countries must sign up to the initiative, particularly developed countries like the United States, Australia, Canada and Australia. Brazil, Russia, India and China, rich in resources and growing fast, should also be persuaded to sign up to the EITI.
- Campaigners want Europe, Africa, Asia and other regions to pass laws that would force companies in the extractive industries to publish what they pay to foreign governments on a case-by-case, project-by-project basis, following the lead of the United States. The Dodd-Frank Wall Street Reform and Consumer Protection Act passed into law in July last year and will require U.S.-listed mining and energy companies to disclose all payments fully. Oil companies, which also sit on the EITI board, oppose unilateral mandatory legislation along the lines of the Dodd-Frank Act, however.
- The EITI should extend its remit beyond the reporting of financial transactions to include the disclosure of contracts between companies and countries and the allocation of exploration and production licenses, campaign groups like Global Witness and ONE argue.
- The EITI’s sphere of influence should be extended to ensure it has a real impact on the ground, giving the public access to information on how resource money is spent by governments to ensure it is working to reduce poverty and promote development, campaigners say.
- The EITI should cover other industries, beyond oil, gas and minerals, for example, forestry, fisheries and agriculture. Liberia has pioneered the expansion of the EITI to forestry and farming.
- Civil society should be supported and empowered to hold governments to account and local campaigners must be allowed to speak out about corruption without fear of harassment, abuse or arrest, campaign groups say.
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