At the Fifth EITI Global Conference

Six EITI implementing countries were designated EITI compliant following the subjection of their national processes to international validation. These are: Norway, Central African Republic, Niger, Nigeria, Kyrgyz Republic, and Yemen. This brings to eleven, the number of countries so far designated compliant by the EITI international board. The first five countries were: Azerbaijan, Liberia, Ghana, Mongolia, and Timor-Leste.

The number of countries that remains on the EITI candidate list are twenty-four. These are: Cameroon, Cote d’voire, Democratic Republic of Congo, Republic of Congo, Gabon, Guinea, Kazakhstan, Madagascar, Mali, Mauritania, Peru, Sierra Leone, Tanzania, Zambia, Afghanistan, Albania, Burkina Faso, Chad, Indonesia, Iraq, Mozambique, Togo, Guatemala, Trinidad and Tobago.

Ghana re-affirmed its commitment to transparency and accountability in managing its natural resources

In a speech delivered by Ghana’s Minister for Lands and Natural Resources, Hon. Mike Hammah, on behalf of the President, Ghana stressed its commitment to improving the governance of its natural resources through increased transparency in revenue receipts, their management, and utilization, and its resolve to extend the principles of transparency and accountability across the entire value change of natural resource extraction.

The Minister said, Ghana commitment to date is reflected in the fact that it has since the inception of the initiative in 2003, published six EITI audit reports spanning 2004 to 2008 and the seventh report is currently being prepared. He also disclosed that, Ghana has proactively extended the EITI to the sub-national level, blazing the trail in that process to deepening the initiative in a way that touches the lives of host communities who are directly impacted by the activities of extractive sector companies.

He intimated that Ghana’s EITI reports have informed some institutional and policy reforms taking place in the mining sector currently. These he said, include the review of the fiscal regime under which the mining industry operates, and the development of guidelines for the utilization of mineral royalties at the sub-national level.

The Minister also disclosed Ghana’s intent and preparations towards extending the EITI to the oil and gas sector. He said, “…a new and an expanded Multi-stakeholder Group has been inaugurated to oversee the implementation of the initiative in the oil and gas sector”, adding that, “through the EITI reporting process, the revenue accruing to government from oil and gas will be documented and publicly disclosed”. This, he explained, will lead to greater scrutiny of how the oil revenues are being used.

Ghana, as indicated earlier in the Minister’s speech, signed on to the EITI in 2003 and has since produced six reports. The country was designated EITI-compliant on October 19, 2010 after undergoing international validation of its process.

World bank challenges stakeholders to increase impact of the initiative

In a statement to the 5th Global EITI Conference in Paris, World Bank’s Managing Director, Sri Mulyani Indrawati stressed the need to protect the gains of EITI, empower civil society, and take bolder steps for more results. The Bank re-affirmed its commitment to helping countries implement the initiative and urged stakeholders to deliver more tangible results as a way of further consolidating the principles of transparency and accountability in resource-rich countries.

“Indeed, the long-term test for EITI success will be the extent to which it meets the expectations on its contribution to good management of natural resources for the benefit of all citizens, now and for future generations,” said Inddrawati. She urged resource-rich countries who have not yet joined the EITI to do so as soon as possible, not only because transparency counts, but more importantly because the potential for transparency is always there, and only needs to be unlocked by the voices and actions of all.

Liberia recounts its lessons from the implementation of the Initiative

Liberia became the second EITI compliant country in the world in October 2009, barely two years after it was admitted as a candidate. The country passed a law, the Liberian Extractive Industries Transparency Initiative Act in July 2009 to become one of only a handful of countries to give legislative backing to the quest for transparency and accountability in the natural resource sector, and to make company payments and government revenue disclosures mandatory. Liberia has also set the pace in making contract / licensing transparency in mining, oil and gas, agriculture, and forestry mandatory.

A report launched by Green Advocates, a Liberian civil society group, at the 5th Global EITI Conference in Paris, recounts the achievements and challenges of the Liberian EITI (LEITI).

Guinea Source help for the review of its mining code

At the invitation of President Alpha Conde, George Soros, founder of the Open Society Foundations and his team spent four days in Guinea in the run up to the Paris EITI Conference. They were joined by Paul Collier, the author of “The Bottom Billion”.

The purpose of the invitation was to discuss how George Soros, through his foundations could support Guinea’s ongoing review of its mining code. Alpha Conde is reported to have outlined his government’s commitment to the rule of law, and to enhance the governance of the county’s natural resources. The President reportedly hinted that a new mining code that will include a commitment to EITI and a prescribed standard of conduct that inhibit corruption is being prepared. All existing contracts are to be reviewed. Contract holders and the countries to whose jurisdictions they belong will have to comply with the principles of EITI and a requirement to co-operate with the state’s agencies in criminal investigations.

It appears from the above that, Guinea intends to also legislate the principles of EITI. The Government plans to retain the Revenue Watch Institute and the International Senior Lawyers Project to provide legal advice.

The Dodd-Frank Wall Street Reform Act and the Resource Transparency Agenda

In July 2010, the U.S. Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, a legislation that included a provision requiring oil, gas, and mining companies registered with the U.S. Securities and Exchange Commission (SEC) to publish how much they pay to foreign countries and the U.S. government. The SEC is expected to adopt rules to regulate and enforce the disclosure provision by March 2011. However, according to the U.S.-based Centre for Global Development, the new law leaves the playing field far from level. It contends that, the Extractive Industries Transparency Initiative remains the most effective vehicle to establish this internationally consistent standard.

While 41 of the world’s largest oil, gas, and mining companies adhere to the EITI standard, which gives countries the choice of whether to aggregate revenue flows in EITI reports or to report company payments individually, many still oppose company-by-company reporting. Those who oppose company-by-company reporting argue that, it will put them at a competitive disadvantage.

Indeed, many of the large natural resource companies based in China, Russia, and India will not have to disclose their payments, leaving the field lopsided.

According to the Centre for Global Development, an internationally consistent standard requiring company-by-company reporting will ultimately benefit most investors by compelling all companies, including those from Russia, China, and India to provide transparency on an equivalent basis. EITI, the Centre argues, provides the best opportunity to establish such level playing field. The Centre therefore urged stakeholders in all EITI implementing countries to work towards mainstreaming company-by-reporting in their requirements.

What is EITI?

The Extractive Industry Transparency Initiative (EITI) idea was first proposed by the British Prime Minister, Tony Blair, at the World Summit on Sustainable Development in Johannesburg in 2002. Its essence is borne out in the belief that the citizenry of most natural resource-dependent countries have failed to reap the full benefits of the extractive sector because of perceived corruption and mismanagement of revenue from the sector. The EITI process therefore seeks to open up the extractive sector to public scrutiny, and to ensure that the dividends from the sector are publicly accounted for, and distributed in an equitable and just manner. In order words, EITI aims at improving natural resource governance in resource-rich countries through the full publication and verification of company payments and government revenues from oil, gas and mining. It has the long term objective of promoting sustainable development, reducing poverty, and eliminating conflict and social tension in communities affected by extractive industry activities.

EITI is a Government-led process, with civil society playing a watch-dog role, and ensuring that the set goals are met.

The 5th EITI Global Conference in Paris which took place from 2-3 March 2011 brought together leaders from governments, companies and civil society organisations to discuss ways the Extractive Industries Transparency Initiative (EITI) has led to improvements in their countries.

At the Conference, Ms Clare Short, former UK Minister for International Development, was ushered in to succeed Mr Peter Eigen, founder of Transparency International, as the Chair of the EITI Board.

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Speakers included:

•• RICHARD BOUCHER, Deputy Secretary General, Organisation for Economic Cooperation and Development
•• HE FRANÇOIS YANGOUVONDA, BOZIZÉ, President of Central African Republic
•• PAUL COLLIER, Professor, University of Oxford
•• PETER EIGEN, Chair, Extractive Industries Transparency Initiative
•• PRAVIN J. GORDHAN, Minister of Finance, South Africa
•• HE ARMANDO GUEBUZA, President of the Republic of Mozambique
•• MO IBRAHIM, Chair and Founder, Mo Ibrahim Foundation
•• SRI MULYANI INDRAWATI, Managing Director, The World Bank
•• HE JAKAYA KIKWETE, President of Tanzania
•• HUGUETTE LABELLE, Chair of the Board of Directors, Transparency International
•• HE ROZA OTUNBAYEVA, President of Kyrgyz Republic
•• HE HENRI DE RAINCOURT, Minister for Cooperation, France
•• KEITH SKEOCH, Chief Executive Officer, Standard Life Investments
•• HE WAHIDULLAH SHAHRANI, Minister of Mines, Afghanistan
•• CLARE SHORT, Chair-candidate, Extractive Industries Transparency Initiative
•• GEORGE SOROS, Founder, Open Society Foundations
•• NOBOU TANAKA, Executive Director, International Energy Agency
•• SIMON TAYLOR, Founding Director of Global Witness
•• HE FAUSTIN ARCHANGE TOUADERA, Prime Minister of Central African Republic
•• HE STEVEN VANACKERE, Deputy Prime Minister and Minister of Foreign Affairs and Institutional Reforms, Belgium
•• PETER VOSER, Chief Executive Officer, Royal Dutch Shell
•• HE OMAR ZAKHILWAL, Minister of Finance, Afghanistan
HE ERNESTO ZEDILLO, Chair, Natural Resource Charter