The EITI value chain

Strengthening governance along the extractive industries value chain

The EITI Standard requires countries and companies to disclose information on the key steps in the governance of oil, gas and mining revenues:

Here is a short overview what the value chain steps cover:

  • Legal framework, distribution of licenses and contracts
    This section sets the stage of how the sector is governed, particularly in relation to the rights to extract.  
     
  • Exploration and production
    This covers information on what exploration activities are under way and how much the country produces and exports. Learn more here.
     
  • Revenue collection  
    The major companies disclose what they pay to the government in tax, royalties, signature bonuses, etc. The government discloses what it receives. The figures are broken down by company, project and revenue stream.  
     
  • Revenue allocation
    Once revenues are collected from companies, they need to be recorded in government accounts. Usually, most of the revenue goes to the central government. Sometimes it goes straight to or is transferred to the subnational government or to special funds or projects.
     
  • Social and economic spending
    This covers some of the ways the extractive sector is contributing to social and economic development.  Companies disclose where funds have been mandated to be spent on social projects. The government is asked to publish information about the role of the extractive sector in the economy. How many people are employed in the sector? How important is the contribution of the sector to the economy? This allows citizens to understand the importance of oil, gas and mining in their country. 

Outcomes and impact

The multi-stakeholder group is tasked with making sure that the information on the sector is made known to the population and fosters public debate. It also assesses the impact of the EITI and whether recommendations from the process have been implemented and transformed into reforms to improve the sector. This is covered in Requirement 7

Other topics

There are certain topics that can be found in the value chain that have grown in importance and we have dedicated thematic pages to explain how the EITI Standard contributes to these. They are: