How EITI implementing countries see the results of their processes.
Measuring the impact and learning the lessons of the EITI is critically important to its future success. While various performance indicators track impact at the international level, the most tangible results are seen in each country. These results are as diverse as the 48 countries that implement the EITI.
Each year EITI implementing countries are required to produce an activity report that both tracks results – especially against the country’s workplan – and reflects on what works and what doesn’t. These annual activity reports contain concrete examples of how the EITI is improving the governance of the extractive sector. This piece highlights some of the ways that countries are using the EITI to strengthen systems and inform policy.
Improving data collection and accessibility of information
Integrating data collection into core government and company reporting systems is key for improving efficiency and reliability. Liberia has developed an online data repository to strengthen the collection of revenue figures from companies and government institutions. EITI reporting is streamlined in Kazakhstan for extractive companies through the online EITI data portal called EGSU.
Making data accessible and useable is essential to informing policy. The open data portal in the United States allows the public to study the use of natural resources on federal lands. Sierra Leone has developed an online repository to provide the public with payment information in the extractive sector. With the finalisation of Mali’s mining cadastre, updated company information is now available with a couple of clicks.
Opening up the EITI for a wider audience
Informing citizens on how their natural resources are managed is fundamental to strengthening public debate. To make a difference, information in EITI Reports needs to be communicated in a way that is understandable for the general public. Burkina Faso has translated a simplified version of the EITI Report into six local languages and a comic book presents EITI findings in Indonesia. Mauritania has established EITI focal points in designated mining regions and a network of young journalists covering the extractive industries. EITI communications officers, graphic designers and representatives from the EITI multi-stakeholder group in the Philippines gained valuable skills to develop narratives from the latest EITI report and translate these into easy-to-understand visualisations at the data visualisation bootcamp.
Improving revenue allocation
Although the EITI has evolved over the past decade, revenue collection and allocation are still at the core of the EITI process. Over USD 300 million has been collected in education tax from oil companies in Nigeria. In addition, the national petroleum company remits funds to the government account from the Nigeria Liquefied Natural Gas Company’s dividends. Peru is bringing transparency closer to its citizens. The regional Government of Piura is pioneering a subnational EITI which allows citizens to verify whether their local government receives what it is due. Revenues in Tanzania from PanAfrican Energy Tanzania Limited are now being paid to the Kilwa region where the gas is extracted instead of to the municipality in Dar es Salaam where the company’s main headquarters are located. This correction was made after the 2009/10 EITI Report showed the misallocated revenue flow.
Identifying beneficial owners
Another aspect of extractive industries transparency and accountability is to identify the real owners - the ‘beneficial owners’ – of the companies that have acquired rights to extract oil, gas and minerals. More often than not, the beneficial owners are hidden behind a chain of corporate entities. Providing information about the owners allows the public to understand the ultimate beneficiaries of extractives deals and several EITI countries are participating in a beneficial ownership pilot.
The Democratic Republic of the Congo listed the legal owners of 40 privately held companies in its 2012 Report. The next step is to ascertain the beneficial ownership underneath this legal ownership. The United Kingdom is developing a public beneficial ownership register, Niger has produced an inception report for beneficial ownership, and Mongolia has disclosed information on beneficial owners in their 2013 EITI Report.
“From Reports to Results”
EITI Reports are an important tool for bringing transparency to extractive sector governance in implementing countries. However, in the long term, extractive industry transparency should become an integral part of how governments manage the extractive sector.
Ghana’s 2013 EITI Report provides improved information on how the 10% of mineral royalties, intended for regional governments, are being used by the local governments. Having identified that the local districts were not receiving the revenue due to them, reforms were implemented to monitor these transfers and how they are spent. Information on the State’s participation and how it allocates contracts to companies are being included in Guinea’s the new petroleum code and Honduras is introducing EITI clauses in the mining code and in hydrocarbon contracts. The Tax Authorities in Cameroon are using data from EITI Reports in preparing its audit missions. Parliamentarians in Papua New Guinea are being briefed on the EITI and law makers in the Kyrgyz Republic are focusing on making amendments to the Subsoil Use law in order to make EITI reporting obligatory.
As the examples above show, EITI implementing countries have made strides in making the EITI more accessible, relevant and part of governance systems. EITI data is increasingly informing debate and reforms. At the 7th EITI Global Conference in February 2016, stakeholders from all EITI countries will have the opportunity to exchange experiences, showcase achievements at the National Expo and express their views on the policies and strategies of the EITI.
More examples of impacts can be found in the annual activity reports on the EITI country implementation pages.
A selection of EITI Annual Activity Reports.