EITI implementation deep dive and stakeholder engagement

EITI Berlin Board Meeting Blog: Day 1

The EITI continues to pioneer new aspects of transparency across the world. EITI Board members and around 150 stakeholders gathered today in Berlin for the 40^th EITI Board meeting to discuss progress made by the EITI implementing countries, civic space to advocate on extractives governance, contract transparency and conflict minerals. The Board took a deeper look at major oil, gas and mining countries: Nigeria and the Democratic Republic of Congo.

EITI changing the way business is done in the Democratic Republic of Congo

A decade of implementation has established the EITI as a space for dialogue between key stakeholders in the Democratic Republic of Congo. High-level government representation in the MSG makes the EITI an effective participative governance mechanism, whereby resolutions agreed by state and non-state actors become effectively government policy. In the DRC, there are 53 different revenue streams being collected by more than 15 different government agencies. A highly complex and inefficient fiscal regime requires significant technical capacities to monitor and enforce.

Ongoing reforms such as the new mining and hydrocarbon codes, seek to address these challenges. In June 2013, the DRC did not have a complete list of companies operating in the country. The EITI has played a key role in improving the license register. There is now a relatively up-to-date online cadastre for the mining sector, but not for the hydrocarbon sector. Hydrocarbon licences were published for the first time in DRC EITI Reports. Additionally, a clear government policy for contract transparency was adopted in 2011. Since that time, 142 documents for over 100 contractual agreements have been published.

Deep dive into EITI implementation in Nigeria

‘The EITI has been a force for good in Nigeria’ noted Waziri O. Adio, Executive Secretary of the Nigeria EITI (NEITI).

EITI implementation in Nigeria has led to the recovery of over USD 3 billion in revenues and over USD 20 billion identified for recovery. NEITI aims to ensure a greater impact of extractive resources on citizen’s welfare, in a bid to reverse the resource curse. The body, established by law in 2007, has influenced sector reforms, policies and laws. It opened up a previously opaque sector, energised debate and demand for accountability and contributed to making sector reform an election issue. NEITI intends to go a step further in opening up the NNPC (Nigeria National Petroleum Company), the state-owned oil company, and changing the tax and regulatory environment in Nigeria.

Nigeria’s implementation of the EITI was assessed by the Board in 2016. The Board congratulated Nigeria then, noting that it had made meaningful progress in implementing the EITI Standard. At the Board session, it was noted that Validation helped to ensure standardisation in publications, improved reporting on the oil, gas and mining sectors and identified gaps for future work within the country. Waziri Adio, encouraged the Board to place greater emphasis on the impact of the process in future country evaluations.

Breaking new ground – The Netherlands joins the EITI and will begin disclosures on its gas sector

The EITI Board today approved the Netherlands application to join the EITI. The Netherlands has been closely involved with the EITI since its inception, and has now made the transition to being both a ‘supporting country’ to an ‘implementing country’. The Netherlands EITI multi-stakeholder group was formed in 2017, and aims to “provide each member of Dutch society with transparent and verified information about the money flows between the extractive industries and the government in the context of the extractive industry value chain, in order to contribute to a well-informed debate about the extractive industry value chain in the Netherlands”.

What’s the deal? Improving contract transparency in EITI implementing countries

In 2013, the EITI Standard started to encourage contracts to be disclosed. Contracts are legal documents that governments enter into on behalf of their people. The EITI believes that citizens should have the right to know the terms and conditions of these contracts. Today, 29 EITI countries —over half of all implementing countries— have disclosed at least some contracts. In total, more than 800 contracts have been published by EITI countries. And companies are also engaging on the issue. 16 EITI supporting companies have now made statements supporting publication in some form, including seven out of the ten companies on the EITI Board.

The EITI organized a side event on contract transparency in collaboration with NRGI, OXFAM, Open Contracting Partnership and OpenOil. Governments and companies are increasingly agreeing to publish contracts. By providing a space where citizens, companies and governments can share experiences and lessons learned across stakeholder groups and national boundaries, EITI has helped these actors share concerns and potential benefits, and discuss possible approaches and ways of achieving contract transparency. 

Read EITI Chair Fredrik Reinfeldt’s address on contract transparency here.

Opportunities, Challenges and Risks on the global market-place for raw materials

Cobalt left other metals in the dust this year, driven by demand from electric carmakers such as Tesla. Half of the world’s cobalt production comes from the Democratic Republic of Congo. There is considerable pressure for greater transparency on revenue payments by cobalt traders to governments. This session focused on Competence Centres for mining and raw materials at the German Foreign Chambers of Commerce and Industry. These Centres compile current trends and challenges on international raw materials markets, including on cobalt in the DRC. These Centres were created in response to the new EU-Directive on conflict minerals, the OECD Due Diligence Guidelines and existing voluntary supply chain management systems of raw material companies.

And a word to our hosts…

Oliver Wittke, Parliamentary State Secretary at the Federal Ministry for Economic Affairs and Energy, opened the 40^th EITI Board meeting. Germany has been a long-time supporter of the EITI since 2003, and has contributed politically and financially to the development and outreach of the EITI Standard in developing countries and emerging markets worldwide. Germany became an EITI member in 2016.

While generally regarded as a resource-poor country, Germany has relatively large deposits of lignite, potash and rock salt as well as rocks and soils for the construction industry. Oil and gas are extracted, mainly in North Germany and the North Sea. The EITI Chair, Fredrik Reinfeldt commended Germany’s efforts to expand EITI implementation to cover issues like subsidies and environmental impacts.

We are grateful to our generous hosts.