What is EITI's role in a growing transparency world?

"In a world of Dodd-Franks and the European directives, does EITI still even have a role?" asks Open Oil's Johnny West.

When the Extractive Industries Transparency Initiative (EITI) started in 2002, it was virtually the only transparency game in town. There was the Kimberly process, and a few other specialised mechanisms but nothing like the EITI's combination of broad scope and global scale. But now that transparency has been “mainstreamed”, as they say, and a variety of other initiatives exist, how does that affect the EITI? A radical version of that question, which one sometimes hears muttered, is this: in a world of Dodd-Franks and the European directives, does the EITI still even have a role? It's getting crowded out there!

The answer is an emphatic yes.

Data + people

First, the EITI has unique positioning and brings a broad constituency. It has members and supporters everywhere from corporate headquarters in Texas to activists in the Niger Delta, to a clutch of ministries across 40 countries. That social capital has taken a decade to nurture. It doesnt always make for smooth decision-making but it is what allows the EITI to evolve and adapt to a changing governance agenda. The EITI is not just a data set, it is data plus people.

Second, when it comes to data sets, it is not just about volume or detail. It is true that the European directives on Transparency and Accounting, and the original concept of Dodd-Franks, could in the future yield larger data sets with a high degree of disaggregation than EITI reconciliation reports. But there are key aspects of scope which are still uncertain. Although Russian and Chinese energy companies have some instrument listings in North America and Europe, for example, it is not clear if new reporting requirements will extend to them, or even if these companies would choose to delist to avoid exposure. For over 20 EITI implementing countries, there are also the national oil comapnies (NOC), now covered extensively in the new EITI Standard, but unlikely to be widely exposed to compliance with any of the new legal requirements in the OECD countries.

Third, in the open data paradigm that is now entering the international public policy space, how data sets from the EITI and other initiatives such as the Open Govrenment Partnership and Open Contracting interact with each other is going to be as key as the content, what is actually in those data sets. In this new world, messy is normal and a little bit of overlap between initiatives and data sets is almost inevitable, because of the pace of development and the growing number of actors. It may well be that the Open Contracting initiative in some countries eventually gets some contracts out there before or at the same time as the EITI implementing countries who choose to embrace contract transparency as part of the new standard. Or that the Open Government partnership triggers releases of some financial data that overlaps with the EITI. But in a big data world, this kind of duplication at the edges, while definitely something to be watched and managed, may no longer be the killer bogeyman it has traditionally been in public funding initiatives.

"Networked" data

In the future, occasional overlap between the EITI's information set and others is going to matter far less than if the data have been properly "networked", so that for the end user – the publics of the world – they appear to be one seamless set. Architectural issues such as whether the reporting of data has been standardised and the data are in interactive formats and under fully open licenses will be key to the real value the EITI offers, not just an interesting technicality to be left to the nerds.

Work here is only just beginning. In some cases, the standards don't exist. There is still, for example, no classification system, or taxonomy, applied to government revenue streams from extractive industries that is in wide public use. In other cases, open standards are just emerging and should be embraced. For example, in the case of beneficial ownership Open Corporates have established a namespacing convention which uniquely identifies any company in the world based on its incorporation records in the government registry of companies. By integrating into this system, the EITI can ensure that all multi-stakeholder groups (MSG) who implement some version of beneficial ownership produce data that can be aggregated, interlinked and compared. The resource contracts database developed by the World Bank Institute, Revenue Watch Institute and Vale Columbia Center (VCC) can be developed and evolved into the natural adjunct to any MSG implementation of contract transparency.

But the linkages are even more important at the policy level. And the breadth of scope in the new EITI standard offers more opportunity to connect to vital public concerns.

Take the issue of fuel subsidies. Of all the issues around natural resource management, it is perhaps the price of fuel that arouses the fiercest political debates in many of the EITI countries. Fuel subsidies represent a policy crisis in upwards of 40 countries around the world, costing an estimated $700 billion a year, which everyone from governments to the Bretton Woods institutions to activists worried by the environmental effects is seeking to solve. The new EITI standard folds in payments to and from NOCs, who are normally deeply integrated into the complex pathways of material and money flows in any scaled subsidy system, and therefore has the potential to contribute to debate on this issue.

A couple more examples

New provisions on publishing licenses and cadaster information could offer a unique contribution to debates on community rights by offering actual geocodes to enrich discussion on exactly who is being affected by what where. Similarly, the option on beneficial ownership offers a chance for MSGs to trailblaze on issues of corporate governance, an issue that is particularly relevant to large middle income countries like Brazil and Mexico that are now on EITI's outreach list, where a large local private sector is established.

All three issues – subsidies, community rights, corporate governance – have committed constituencies in many countries, who are both different to each other and who lie beyond those concerned purely by transparency and governance for their own sake. The new standard now embodies potential entry points to all of them.

Which brings us back to positioning and social capital. In these connections to broader issues, what EITI can bring is the fact that it is a global standard sanctioned by government, but formally including business and civil society. Its very structure is the embodiment of a concept of sustainable development, in other words. Anyone can – and people do – produce data on these and other issues. But the EITI information on such sensitive subjects is not just another report. It is data plus people.

In short, the growing world of transparency and governance is much more opportunity than threat to the EITI, as long as it remains outward-facing, and proactive in the search for linkages.

Johnny West is the founder of OpenOil, a Berlin-based consultancy which seeks better outcomes of extractive industries.