Extractives transparency and its beneficiaries

EITI's Anders Kråkenes writes that the users of disclosed data are not always who you think.

From the Norwegian Petroleum Directorate's website

As the EITI has grown, it has evolved to reflect best practice in achieving the aspirations of the EITI Principles. To date, 35 countries have disclosed revenue data in EITI Reports, and more research and stories on impact of the EITI are emerging.

Consequently, our narrative on the "Benefits from EITI" is evolving. This includes new answers to the question of who benefits from “increasing the amount of information in the public domain”.

Who are the users of the data?

There is little doubt that civil society is a primary user of the data disclosed through the EITI. The many submissions to the EITI infographic competition earlier this year demonstrate this.

However, a primary user of such disclosed data is also the private sector.

As Aasmund Andersen wrote in a blog post earlier in the month: "Investors, rather than stakeholders, are the primary users of the public data for their decision-making and due diligence purposes".

Along the same lines, OpenCorporate's Chris Taggart argues that opening company ownership data (now encouraged by the EITI Standard) is good for business: "to take an informed decision about whether you want to do business with the company, work for it, or, in the case of the state, ensure that it does not engage in fraud or other criminal activities – in other words, [to know] who you are dealing with".

UK Prime Mininster David Cameron made a similar point at the opening session of the Open Government Partnership Summit in London. He argued that a wealth-creating market relies on easily accessible information for companies and customers, underpinned by the rule of law, the absence of conflict and corruption, strong property rights and institutions. He added that transparency enables the state to collect its due taxes and therefore keep them low, “No tax base – no tax case”.

These arguments match well with what we hear from the Norwegian Petroleum Directorate, which publishes the excellent Fact Pages, with extensive disclosure on Norway’s oil and gas sector. You can even access it using an app for your mobile device. In spite of having a citizen-friendly app, they have found that the majority of users are from the oil industry and the investor community. They report several benefits from this disclosure: when all companies have access to the same information, companies compete to offer the best technical solutions and people, instead of competing to have the most in-depth knowledge and capital.

Towards a clearer value proposition of transparency for business?

As shown by Aasmund and by the Norwegian Fact Pages, business can be an important user of data disclosed through the EITI. There are several conclusions to be drawn from this.

First, more work is needed to understand how the private sector makes use of the data disclosed through EITI, and how it can be made more useful and accessible.

Second, EITI multi-stakeholder groups in implementing countries can do well by identifying the private sector as a key user of the EITI data. This is of particular relevance as many multi-stakeholder groups are currently developing new work plans in line with the EITI Standard.

Finally, and returning to the aforementioned "Benefits from EITI". The findings discussed in this blog serve to support the assertion that transparency can level the playing field for extractive companies, which in-turn improves the investment climate.

Our understanding of the benefits of EITI implementation will no-doubt continue to evolve. In many cases, the benefits and beneficiaries will be different than what was first expected.

 

Anders Kråkenes is Communications Manager at the EITI International Secretariat, and has just started tweeting at @anderskraken.