Building accountable institutions and combatting corruption in the extractive sector is particularly challenging in countries with a legacy or backdrop of conflict. According to participants in the Transparency Matters seminar Finite resources and fragile states, reforms can take place even in fragile environments, provided that reformers and civil society are protected.
Fragile states are countries which experience a nexus of challenges, including conflict, poor governance, high levels of extreme poverty and exposure to adverse events, for example climate impacts. Such countries often host substantial natural resources which, if managed well can be used to benefit citizens. If managed poorly, however, they can fund private or illicit gain.
In this context, the EITI is a generator of transparency, enabling citizens to “follow the money” which is fundamental to addressing corruption and sparking debates on planning. According to EITI Board Chair, Helen Clark, while resources can be driver of either of development or conflict, peace is needed “to be on right side of ledger”.
The event’s participants stressed the need for tailoring reforms, based on a deep understanding of context. In the case of Afghanistan, there are many challenges to reforming the extractive sector: geography, specifically the landlocked nature of the country; instability and tension between different sections of society; high levels of corruption; the presence of illegal mining; and complex bureaucratic processes which tended to discourage investment. Former Minister of Mines, Petroleum and Industries of Afghanistan, Nargis Nehan, also highlighted the challenges of being a female leader in an environment where women taking on such roles was still unprecedented.
Reforms implemented in response to these conditions started with a roadmap for sector development, which clarified the roles of all parties, as well as a reform strategy for key institutions. The legal framework was laid with development of a hydrocarbons law, and there was a division of responsibilities with the regulatory authorities to ensure the presence of an independent body to regulate the sector. The Ministry of Mines and Petroleum established a Transparency Portal providing public access to all mining contracts concluded over last 10 years, and a review of previous contracts was undertaken to address and resolve legacy issues. Memoranda of understanding were signed with civil society groups, so that they could freely engage with the Ministry and provide their feedback.
This striking list of achievements was possible in a challenging environment, where there was little culture of attracting investors, a lack of institutions and a fragmented social fabric. EITI implementation in Afghanistan prioritised trust-building, for example by ensuring that governance structures represented all ethnicities. Mechanisms for channelling revenues provided for money from resources to be paid back to communities, based on the belief that lack of participation would drive community support for illegal mining.
Looking beyond Afghanistan, Helen Clark highlighted the role of international partners and of the EITI. The EITI’s Validation process – ongoing assessments of countries’ progress in meeting the EITI Standard – offers concrete recommendations to inform the pathway to reform and strengthen institutional, legal and regulatory frameworks related to extractive sector governance. Civil society space remains a critical aspect of Validation. The EITI is based on the concept of partnership between government, civil society and private sector. Where this process is not productive, or trust has broken down, civil society will call on the EITI to take measures.
The role of civil society and the need to protect reformers is critical.
The role of civil society and the need to protect reformers is critical. While civil society is fundamental for holding government to account, their role can be tough, and civil society organisations may be under-resourced.
When former Minister Nargis Nehan left her role in 2019, she hoped that some of her legacy would remain and that successors would be able to continue her work. While she stressed that she will not engage with the current regime until women are regarded as equal partners, she highlighted that the Transparency Portal has remained online and that many officials have remained in their roles. While in office, Nehan’s stated ambition was “to make sure the doors and windows of the ministry are open to civil society, in such a way that they will remain open after I leave.”
The EITI is grateful to Norad for hosting this event and to both Bjørg Sandkjær, State Secretary for International Cooperation at the Ministry of Foreign Affairs in Norway, and Norad’s Director for Climate and the Environment, Stig Traavik, for their opening remarks and support.