EITI launches 2019 EITI Standard
EITI launches 2019 EITI Standard
At the opening of the 8th EITI Global Conference in Paris, outgoing EITI Chair Fredrik Reinfeldt formally launched the 2019 EITI Standard:
This is one of the most significant achievements of the outgoing EITI Board. It has involved a huge consultative exercise and, as with previous versions, in line with the EITI way, it draws on practice in the implementing countries. As such it is a reaffirmation of the commitment of the 52 countries. It focuses more on systematic disclosure of extractives data as a default rather than EITI reports. It also contains new requirements on contract transparency, the environment and gender. This topic will be covered in more detail in some of the other sessions of this Conference.
The 2019 EITI Standard represents a further evolution in transparency. The focus is on making disclosure and open data a routine part of government and corporate reporting, providing information to stakeholders in a timeframe and format that can support its widespread use in analysis and decision making. It now requires contract transparency for new contracts from 2021 plus new requirements on environmental reporting and gender.
Overview of the 2019 Standard
An overview of the changes is available here. The most significant changes include:
Contract transparency. In many EITI implementing countries, contracts signed by the state and by companies establish the fiscal terms that determine how much tax is paid for resource extraction. These contracts are often confidential, hindering informed public debate on whether the country is receiving a fair return. The 2013 Standard was a landmark in encouraging contract transparency and requiring a clear policy on contract disclosure, and was effective in putting the issue on the table for discussion at the national level. The majority of EITI implementing countries have taken steps to publish contracts and promote public debate. The 2019 Standard requires disclosure of contracts signed after 1 January 2021. Multi-stakeholder groups (MSGs) will be expected to integrate contract disclosure into their EITI work plan
State participation and commodity trading. Of the USD 2.5 trillion dollars in oil, gas and mining payments covered in the EITI Reports published to date, around half flows through national oil companies. The EITI Board agreed to strengthen the disclosure requirements regarding state participation, transactions related to state-owned enterprises and quasi-fiscal expenditures. Working together with commodity traders, the EITI also improved its requirements regarding the disclosure of “first trades”, i.e. the sale of the state’s share of production or other revenues collected in-kind.
Environment. The environmental impact of the extractive industries is a focal point of public debate. The 2019 EITI Standard has reiterated that the EITI should cover material environmental payments by companies to governments, and encourage disclosures of contextual information related to environmental monitoring.
Gender. The 2019 Standard requires MSGs to consider gender balance in their representation and disclose employment data by company, gender and occupational level. It also addresses gender considerations in the dissemination of EITI data, and encourages MSGs to document how they have taken gender considerations and inclusiveness into account.
Mainstreaming transparency. The 2019 EITI Standard continues to shift the focus from publishing EITI Reports toward encouraging systematic disclosure, opening up new opportunities for MSG discussion and oversight. The Global Conference is showcasing progress in this area.
Background and development of the global EITI Standard
Since its inception, the EITI Standard has evolved to meet the needs of stakeholders and to further the realisation of the EITI Principles. In the lead up to the EITI’s previous global conferences (held every three years), the EITI Board has considered opportunities to strengthen EITI implementation and to improve the governance of the EITI Association.
The most ambitious step was the agreement of the 2013 EITI Standard ahead of the 6th Global Conference in Sydney, Australia. In its early years, the EITI focused almost exclusively on reconciling company disclosures on tax payments and government disclosures on revenues. The 2013 EITI Standard introduced a wide array of new reporting requirements regarding laws, contracts, license allocation, state participation, trading of commodities on behalf of the state, social payments and transfers.
The 2016 EITI Standard focused on clarifications and improvements, and was adopted by the EITI Board ahead of the 7th Global Conference in Lima, Peru. It reflected three important changes: (1) a new requirement on beneficial ownership reporting, (2) changes to allow for “mainstreamed” EITI implementation, and (3) the introduction of an improved Validation system for measuring implementing country performance. Since its implementation, the majority of EITI countries have completed Validation against the 2016 Standard. Most are addressing corrective actions needed to meet the EITI’s requirements and wider recommendations aimed at making the EITI’s work more meaningful and effective.
The lessons from Validation led the Board to focus again on clarifications and improvements. At the 41st Board Meeting in Dakar, the EITI Board agreed to clarify requirements that had already been under discussion since Lima, to address precedents established in Board decisions, and to further reflect the EITI’s focus on encouraging systematic disclosure. A working group mandated by the EITI Board developed 13 proposals for consideration. The Board agreed the changes in Principle in Kyiv, and affirmed the changes at the 43rd EITI Board Meeting in Paris.
Learn more about the EITI Global Conference here.