Sharing practice, building systems

Blog from Day 2: Opening Up Ownership Conference

Fifteen workshops, over a hundred speakers, more than 400 experts from more than fifty countries, more than 100,000 people engaging with the EITI online and trillions of dollars on the line. Welcome to the EITI’s Global Conference on “opening up ownership” – day two.

Sharing practices, building systems
Imagine you were tasked with setting up a beneficial ownership register in your country. Of course, for many of the participants in the conference this is not just hypothetical; but for the sake of argument, imagine that this is your task. Where do you start? Are there emerging standards and commitments that you can build on? How do you address complex ownership chains and difficult corporate structures? What links should you make to asset declarations of politically exposed persons and how would you go about this? Wouldn’t it be nice if there were ways that you could work together with civil society to improve beneficial ownership disclosures? Surely this is a way to start.

But then what? You probably need to establish a legal and regulatory framework of some kind, and you certainly will wish to learn from other countries about their experiences of how to build a beneficial ownership register. But what do you do about publicly listed companies? And once you have this information out, how are you going to make use of the data and analyse it?

Once you’ve come this far you may think that the difficult stuff is out of the way. But what about ensuring reliable data and setting appropriate sanctions? Will you not need to reach out to companies and provide guidance to help them report correctly? And if you’re going to be doing all of this work, shouldn’t the data be openly available and in accordance with standards for disclosure formats?

As participants in the conference learned during this second day of workshops, beneficial ownership disclosure is not easy.  Although the challenges are similar across countries, the solutions that they arrive at are very different.

So what did we learn?
Whatever solutions are found, they need to be enforceable. As EITI Head Jonas Moberg put it, “we need to ensure that any registers prevent, not protect, corruption”. They will also, out of necessity, require inter-ministerial cooperation, legal reforms and often difficult discussions to address challenges posed by vested interests. Importantly, the data needs to be used and useful, or all of this work will be in vain.

Practical solutions to political problems
Beneficial ownership disclosure is a win-win for industry, civil society and government.   As more than one speaker said over the last two days, this is one of those challenges where, unless either everyone is part of the solution, or so many loopholes will remain that our efforts will be for naught. Beneficial ownership disclosure needs to begin with a strong political commitment from governments across the world. During this second day of the Conference, we heard commitments from the Governments of Armenia, Dominican Republic, Guatemala, Indonesia and Ukraine.

Scratching the surface
As the first event of its kind, the EITI’s Global Conference on Opening up Ownership: Sharing Practices and Building Systems helped to get the conversation going.  We at the EITI are most grateful to our Indonesian hosts for the opportunity to do so in Jakarta. It has been excellent to learn from Indonesia’s experiences. If there’s one thing we have learned, however, is that there is still a long way to go for beneficial ownership disclosure to be the global norm. EITI countries are leading the way by committing to disclose the beneficial owners of companies in the extractive sector by 2020, and this Conference helped its participants move one step closer towards that goal. There is still much work that needs to be done.