The EITI is often described as a voluntary initiative. Some imply by this that it is somehow toothless. I am sure that the companies operating in EITI implementing countries find the EITI mandatory indeed.
The EITI is implemented by governments. And of course it is voluntary for governments to implement the EITI. Governments are sovereign and exercise the right to engage or not with any process.
However, in almost all implementing countries, the commitment to implement the EITI has been enacted or decreed in some way. In Nigeria and Liberia, for example, there are specific EITI laws. Future governments in those countries would have to repeal these laws should they wish to stop implementation. In other countries, such as Norway, Ghana and Sierra Leone, the minerals and mining or petroleum laws include specific clauses on EITI implementation. In other countries, there have been Presidential or Ministerial decrees, and in other Memorandums of Understanding. What is clear is that in every case there has been strong direction by the government for agencies and companies to comply with the requirements of the EITI. And if this has not been effective, a country will not be deemed EITI Compliant.
EITI and companies
Therefore, a company cannot decide whether or not to report according to the EITI in implementing countries. It is irrelevant whether a company operating in Timor Leste or the Democratic Republic of Congo has expressed its support for the EITI, or whether it is British, French, Malaysian or Chinese.
A company can, however, go further and support the EITI internationally. This support takes many different forms and is critical to us. It includes financial and political support and also, occasionally, technical support. This is voluntary. And with this voluntary support of the EITI, comes no reporting obligation. A company that supports the EITI and that operates in Sudan does not need to report payments in accordance with the EITI, as Sudan does not implement the EITI.
Furthermore, in some countries there are listings requirements about disclosure of payments and in others such are being prepared. While I do not wish to comment on the merit of such efforts, I simply conclude that these too have a voluntary dimension, as companies can decide whether they wish to be listed or not.
I think that the confusion comes down to the misunderstanding by some that the EITI is a corporate social responsibility standard. Whilst we welcome companies' support and consideration of it as part of their corporate responsibility, we must keep in mind that governments not companies implement the EITI.