Launched by Tony Blair in 2002, the Extractive Industries Transparency Initiative (EITI) is evolving from an interesting niche project into one of the centrepieces of global efforts to tackle the ‘resource curse’ and translate natural resource wealth into genuine development for producing countries. It now has 20 candidate countries, with various other states and dozens of companies, NGOs and other organisations voicing their support. The core of the initiative is a standard for companies to publish what they pay to governments, and governments to disclose what they receive, from oil, gas and mining.
But expectations from NGOs and civil society are also rising fast for the initiative to deliver tangible outcomes in various countries. At the same time, the EITI needs to listen to the views of the governments and companies, not just the NGOs, who sit on its board. Meanwhile, big, related global issues such as energy security are competing for the attention of international policy makers. Jonas Moberg, a former Global Compact advisor and Swedish diplomat, may require all his diplomatic skills to navigate such pressures. Critical Resource recently put to him the following questions.
Q: The issue of energy security has risen rapidly up the political agenda in many countries. Is the EITI part of the answer to global energy insecurity? If it is, why isn’t it more often trumpeted by politicians seeking to tackle the problem?
A: It is absolutely part of the answer and it is encouraging that politicians are increasingly recognising that energy supplies will be more secure and reliable with better governance and transparency in producing and transit countries. EU Energy Commissioner Piebalgs’ contribution at our recent regional meeting in Africa is a case in point. When the G8 Energy Ministers met in Hokaido Toyako earlier this year one of the first points they made in the Joint Statement was to welcome the efforts of oil and gas producing countries to implement the EITI. This was later reinforced by the G8 Finance Ministers when they met.
Q: While EITI candidate countries include numerous Sub-Saharan African states, many of the world’s major oil producers – including key Middle Eastern countries – have yet to sign up. Isn’t it critical that such countries join if the EITI is to achieve its goals?
A: The number of countries committed to implementing the EITI continues to grow. Most recently Norway, Botswana and Iraq announced their intentions to implement the EITI. We are delighted that Qatar is increasingly supporting the EITI and has agreed to host our next global conference, in Doha in February. The UN General Assembly unanimously adopted a resolution in September backing the EITI, and it is encouraging to see that a growing number of large emerging economies are expressing interest in the EITI.
That said, it is important to bear in mind that the EITI is implemented nationally, through a country-led process. It matters little for the EITI process in the Democratic Republic of Congo or in Kazakhstan whether or not Iran or Venezuela joins.
Q: The EITI was recently reported to have disqualified three countries from the initiative for falling short of its requirements. But is the problem of “free-riding” (by governments who claim to support the EITI but fail to take meaningful action) really a thing of the past? Doesn’t the EITI need to show even more teeth?
A: There are many things to be worried about – such as ensuring that we really are seeing the development of a high and global level playing-field – but I don’t believe we need to show more of our teeth. It is important to bear in mind that although the EITI as an initiative has been around for a little while, important parts of the methodology were only agreed in 2007. The EITI’s rules are now unambiguous. Two years after a country has obtained candidate status, it has to invite what we call validators, whose task it is to check that the EITI’s principles and criteria are being implemented. Most of our implementing countries obtained candidate status early this year and thus have until early 2010 before they have to validate.
Q: By the same token, are the companies which have endorsed EITI really doing enough? A recent Transparency International report suggested that “only a few” corporate supporters of EITI are “applying EITI transparency principles systematically across all countries of operation.”
A: Many of our corporate supporters also operate in countries that are not implementing the EITI, which in part explains the statement you are referring to. We are encouraged that a growing number of our supporters are transparent about their payments also in countries not yet implementing the EITI.
Q: The Nigerian president recently highlighted the issue of “blood oil”, or crude which helps fuel conflict. Is blood oil now as big a problem as was the issue of “conflict diamonds”, say, a decade ago? And could the EITI eventually serve a similar purpose as the Kimberley Process on conflict diamonds in stopping it?
A: Remember that it was at an EITI-meeting that the Nigerian president made this comment, pointing towards the EITI being part of the solution!
Q: Civil society’s freedom and involvement are central aims of the EITI, but the governments of several candidate countries have allegedly threatened and harassed campaigners advocating transparency. Shouldn’t the EITI pressure authoritarian regimes to protect civil society?
A: Civil society’s ability to operate freely is a core EITI principle. When it is brought to our attention that this may not be the case, we bring our concern to the attention of the government. Some times we do this publicly, some times not.
Q: Some in the mining industry have argued that the EITI was framed originally to address corruption in the oil and gas sectors, and that mining presents a different set of issues which the EITI is ill-designed to address. Does the EITI need to include elements more tailored to mining?
A: The EITI is a global minimum standard, which gains value and relevance when it is nationally implemented, adapted and developed. In Ghana, for example, it has been implemented well and, so far, only in the mining sector. To discuss some of the issues particularly relevant for the mining sector, we are together with companies like AngloAmerican and AngloGold Ashanti early next year publishing a guide to the EITI and the mining sector.
Q: EITI++ was announced by the World Bank in April 2008, with the aim of improving outcomes across the whole process of resource development, from negotiating contracts to spending revenues, rather than just on the reporting of revenues which is the EITI’s focus. But doesn’t EITI++ risk confusing external perceptions of EITI’s brand? And is it likely to have much hope of success given that its focus is so broad?
A: I believe that it is hugely welcome that a development institution like the World Bank is offering its partner countries further support in managing their natural resources. EITI++ has been the Bank’s working title for its new approach. Let us see what name the Bank and its partners will choose as this approach gains form and structure.