Mining perspectives on the EITI

A review of international and in-country experiences of the EITI from the perspective of supporting mining companies.

In 2013/14 the President of the International Council on Mining and Metals (ICMM) commissioned me to write a review of industry perceptions of the EITI. After extensive discussion of its findings in the industry the report was recently published.

I identified four strategic challenges for EITI:

  • adapting from holding the ring during years of plenty to helping stakeholders to manage the fiscal and employment consequences of falling commodity prices;
  • avoiding over-loading the Standard so that it becomes too ambitious for low governance capacity countries;
  • ensuring that home country payment reporting laws do not detract from the effort devoted to EITI with its crucial in-country accountability and dialogue processes; and
  • avoiding the, otherwise, welcome involvement of OECD countries distracting from the developmental focus of the initiative.

Support and appreciation for EITI remains strong amongst mining executives at both a corporate level and in-country and is perceived to have had four positive impacts. First, it is seen as having contributed to improved governance of resource revenues. Second, it has facilitated dialogue with governments and civil society and, thereby, built greater trust. Third, it has reduced the scope for corruption and, finally, it has increased understanding of the contribution which mining makes to host economies. There are, however, concerns and especially a view that, as a consensus-based initiative, all stakeholders need to act with respect and restraint and not try to use EITI for activities where the interests of the parties fundamentally diverge. Mining stakeholders hope to see EITI make a bigger impact in areas such as tracking sub-national revenue flows, improving the investment climate and increasing the visibility of how resource revenues are used.

The review also sets out recommendations on the future direction of EITI and for how the mining sector relates to it. Above all, it notes that whilst there are still many resource-rich countries where the adoption of EITI would be valuable, in those countries where it is already being implemented, industry representatives need to ensure they are actively involved in shaping its work.      

Read the full review.