Extractive Industries Transparency Initiative
Logo of EITI
|Motto||Seeing results from natural resources|
|Formation||17 June 2003|
|Purpose||Financial transparency and improved governance in the extractive industry|
|English, French, Russian|
Chair of the Board
Head of the International Secretariat
The Extractive Industries Transparency Initiative (EITI) is an international organisation which maintains a standard, assessing the levels of transparency regarding countries’ oil, gas and mineral resources. This standard is developed and overseen by a multi-stakeholder Board, consisting of representatives from governments, extractives companies, civil society organisations, institutional investors and international organisations.
EITI Standard is implemented in 51 countries. It consists of a set of requirements that governments and companies have to adhere to in order to become recognised as 'EITI Compliant'.
The Chair of the EITI is Fredrik Reinfeld, former Prime Minister of Sweden. The previous chairs have been the Rt Hon Clare Short, former UK Secretary of State for International Development and Peter Eigen. The EITI International Secretariat is located in Oslo, Norway and is headed by Swedish former diplomat Jonas Moberg.
The “Extractive Industries Transparency Initiative” (EITI) was first launched in September 2002 by UK Prime Minister Tony Blair at the World Summit on Sustainable Development in Johannesburg, following years of academic debate, as well as lobbying from civil society and companies, on the management of government revenues from the extractive industries. In particular, the EITI is an answer to public discussions on the “Resource Curse” or the “Paradox of Plenty”. NGOs such as by Global Witness and “Publish What You Pay”, as well as companies such as BP pushed the UK government to working towards an international transparency norm.
The organisation was founded at a conference in London in 2003. The 140 delegates from government, companies and civil society agreed on twelve principles to increase transparency over payments and revenues in the extractive sector. A pilot phase of the EITI was launched in Nigeria, Azerbaijan, Ghana and the Kyrgyz Republic. The management of the Initiative continued to lay with the UK Department for International Development.
The second EITI Conference on 17 March 2005 in London established six criteria based on the principles. These set out the minimum requirements for transparency in the management of resources in the oil, gas and mining sectors, laying the foundation for a rule-based organisation. This conference also established an international advisory group (IAG) under the Chairmanship of Peter Eigen to further guide the work of how the EITI is to be set up and function. More countries, companies and civil-society organisations joined the initiative. The International Monetary Fund and the World Bank endorsed the EITI.
The report issued in June 2006 by the international advisory group recommended the establishment of a multi-stakeholder board and an independent secretariat, and these were set in place at the third EITI conference held in Oslo, Norway on 11 October 2006. Oslo was chosen as the new location for the secretariat.
In the following years the body further fleshed out the criteria, turning them into a set of 23 requirements, known as the EITI Rules . These were adopted as the EITI Board was renewed in on 2 March 2011 at the fifth conference in Paris, France. Clare Short was appointed as the new Chair of the Board.
Structure and Funding
The EITI is organised as a non-profit association under Norwegian law. It has three institutional bodies: The Members’ Meeting, the EITI Board, and the International Secretariat. The Members’ Meeting governs the EITI and convenes alongside the EITI conferences, which are held every two to three years. The board is the executive body and is supported by the secretariat.
The EITI Board meets three times a year and is composed of three groups: countries, companies and civil society. The membership of the board reflects the multi-stakeholder nature of the EITI. The board has seven committees to assist on selected issues on a more regular basis.
The funding of the EITI is two-fold. Countries can ask for financial assistance from a trust fund managed by the World Bank for the costs associated with implementing the EITI Standard in their country. This fund is supported by 15 donor partners. The operation of the EITI is carried out by the secretariat and funded by supporting governments, companies and civil society.
The EITI Standard
The EITI Standard is an international standard that ensures transparency regarding countries’ oil, gas and mineral resources. The EITI Standard provides the requirements and guidance on how to report activity in the oil, gas and mining sectors and ensures that this information is available to the public. The Standard also covers areas such as license transparency, transit and state oil sales.
Any country with extractive industry sectors can adhere to the EITI Standard. Countries implementing the transparency standard include OECD states such as the US and Norway, as well as countries in Latin America, Africa, Central and East Asia.
In total 51 countries apply the transparency standard to the management of their natural resources.
When a country intends to join the EITI Standard, is required to undertake four sign-up steps before applying. These include a clear statement of the government’s commitment, developing a work plan that sets objectives for what the country wants to achieve with the EITI, and establishing a multi-stakeholder group together with companies and civil society.
Once the application of the country has been accepted by the board, the country is called a “candidate”. It then has two and a half years to fulfil the seven detailed requirements of the EITI Standard. The candidate country then undergoes a comprehensive examination called “validation”. If it passes the assessment, it is declared “compliant” by the board.
Twenty-nine countries are considered "Compliant countries":
The following 17 countries are "Candidate countries":
The Democratic Republic of Congo, which was suspended as a Candidate country in 2013 for insufficient reporting, independent audits and monitoring, was given Compliant status in July 2014. Other countries, such as Germany, France and Australia have shown interest in implementing the EITI.
Around 90 companies involved in oil, gas, and mining support the EITI. Supporting companies publicly endorse the EITI and can contribute to covering the cost of the international secretariat of the EITI.
The EITI is furthermore endorsed by over 95 institutional investors with total assets under management of more than US $16 trillion.
Extractive companies are involved on the national level in countries implementing the transparency standard. They are part of the stakeholders and are required to hand over numbers on payments as part of the reporting process under the EITI standard. Company advocacy has resulted in several countries beginning EITI implementation.
Campaigning organisations have criticised the organisation for the lack of sanction possibilities. Business representatives have commented that the EITI board is captured by civil society organisations. The EITI has been seen as insufficient to bring full transparency to payments in the extractive industries, since it does not cover countries active in commodity trading. The body's credibility was questioned after it permitted an Ethiopian application for membership in 2014. EITI has also been criticised for ignoring the violations of human rights in Azerbaijan, and for not reacting sufficiently strongly to the harassment of Azerbaijani civil society groups that are part of EITI's multi-stakeholder approach.
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