Addressing corruption risks through EITI implementation

Corruption¹ remains a significant challenge in many resource-rich countries. The extractive sector is particularly vulnerable due to the high value of the resources and substantial revenues involved. Complex value chains, transactions and business relationships add to the difficulty of oversight, while extensive state control and the involvement of political elites further blur the lines between public and private interests. These factors contribute to corruption risks across the entire extractive value chain, manifesting as opaque licensing, cost and price manipulation, tax evasion and misappropriation of revenues, among others. 

The EITI aims to mitigate these risks through its disclosure requirements and multi-stakeholder approach. The 2023 EITI Standard introduces various anti-corruption objectives and requirements to support implementing countries’ efforts in identifying and addressing corruption. EITI reporting highlight aspects of the sector that are prone to corruption, exposes governance practices vulnerable to abuse and provides valuable data to support anti-corruption efforts. Through transparency, the EITI can shed light on suspicious transactions and deals, while its multi-stakeholder process promotes public debate, monitoring and advocacy, advancing global anti-corruption norms and policies.²

This note provides a step-by-step approach to help EITI multi-stakeholder groups (MSGs) define the EITI’s role in mitigating corruption, in line with the 2023 EITI Standard. It includes resources and tools for identifying, assessing and addressing corruption risks and offers case studies illustrating practical applications from EITI implementing countries. Annexe B provides examples of how to apply the steps in specific areas of extractive sector management.

MSGs are encouraged to consider their national context in implementing this guide. Key factors to consider include types of corruption risks, actors, legal frameworks, institutional capacity and resources. Based on these, MSGs may adopt various roles, from information disclosure and analysis to supporting advocacy, collective action and capacity building. By tailoring efforts to the national context, MSGs can use transparency to effectively reduce corruption risks. 

To begin, the MSG should identify the most significant corruption risks in the extractive sector, considering how the EITI could help address these risks while aligning with national anti-corruption efforts. The MSG can draw on EITI disclosures and tools to identify stages, commodities, sub-sectors, policies and practices along the value chain particularly vulnerable to corruption. To ensure successful implementation and sustainability, the MSG should actively engage anti-corruption actors from the outset and throughout the implementation cycle.

Note: The time needed for this step depends on MSG capacity, priorities and resources. To undertake this step, the MSG could consider conducting an anti-corruption workshop (1-2 days). Undertaking a detailed assessment, using tools such as the MACRA/NRGI frameworks (see box below), could take up to three months. Where feasible, the MSG could consider establishing a dedicated anti-corruption working group to further sustain efforts.

The MSG may consider the following steps:

1. Identify stages of the value chain most prone to corruption. The MSG could define the scope of its work by identifying potential corruption risks across the extractive value chain and prioritising areas for action. These priorities should be informed by prevailing corruption issues within the sector and country.³ For example, investment booms in mining may heighten risks in contract and license awards, including bribery, collusion and favouritism. In the oil and gas industry, high revenues associated with extraction, transportation, export and trading can increase the risk of price manipulations and other revenue-related corruption.  

The EITI Standard offers a tool to identify risks in the sector’s value chain (see more under Step 1.4 below). The MSG can draw on EITI disclosures to identify stages, commodities, projects, sub-sectors, policies and practices along the value chain particularly vulnerable to corruption.  

In addition to the EITI Standard, the MSG may wish to draw on tools such as Transparency International’s Mining Awards Corruption Risk Assessment (MACRA) Tool and the Natural Resource Governance Institute’s (NRGI) corruption diagnostic tool to identify specific corruption risks. National audit reports, independent investigations and publications by anti-corruption agencies, civil society organisations and media can also offer complementary insights into the corruption risk landscape.

After identifying corruption risks, defining objectives and developing an activity plan, the MSG’s next step is effective implementation. This involves carrying out planned anti-corruption activities while remaining adaptive and innovative to address real-time corruption cases. The MSG should prioritise "quick wins" to sustain momentum, while gradually tackling more complex and high-impact activities. Combining discrete, low-profile reforms with high-visibility public initiatives can deliver meaningful progress while demonstrating tangible results. Adopting this balanced and dynamic approach ensures that the MSG’s efforts remain relevant and impactful in addressing national issues.

The MSG could consider leveraging existing strengths of EITI implementation, for example convening actors, supporting investigations, facilitating debate, conducting analysis, advocating for reforms or building stakeholder capacity. Flexibility to adjust its role and activities allows the MSG to respond effectively to context and emerging issues, maximising its anti-corruption efforts.

Note: The time needed for this step depends on MSG capacity and resources. Some activities may take a single day (e.g. during an MSG meeting), while others may span months or years, depending on complexity.

Activities to consider: 

1. Disclose relevant information. EITI disclosure requirements provide a foundation for identifying anomalies that can support investigations and broader anti-corruption efforts. (see Annexe A). Often, complementary data is needed to fully assess corruption risks. Under Requirement 7.1.c(iii), the MSG can request, disclose and assess additional data from companies and authorities not typically included in EITI reporting, such as information on asset declarations of politically exposed persons (PEPs) or corporate filings to stock exchanges. Expanding the scope of EITI reporting to cover additional risk areas, such as service contracting or the renewable energy sector, can also be beneficial. Where feasible, the MSG may disclose or submit data to directly support ongoing corruption investigations. 

2. Analyse disclosures and provide recommendations. Publishing EITI Reports and undergoing EITI Validation should yield actionable insights. Under Requirement 7.3, the MSG should recommend improvements for extractive sector policies. For example, the MSG can assess deviations from licensing procedures (Requirement 2.2.a(iii-iv)) and analyse beneficial ownership data and contracts to provide recommendations on regulating contractual obligations by different corporate owners. EITI Validation reports also provide corrective actions and strategic recommendations that may provide entry points for the MSG to address corruption risks.  

The MSG can further support investigations by triangulating production, exports and revenue data; analysing financial disclosures, beneficial ownership information, contracts; and comparing audits reports and Validation assessments to identify anomalies. Such analysis can help uncover smuggling, discrepancies in revenues and subnational transfers, unusual licensing timelines, conflicts of interest among PEPs with stakes in extractives projects, and mismatches between contract terms and corporate behaviour.  
 
Resources such as NRGI’s briefing on using EITI disclosures for anti-corruption (as well as its earlier report)⁹ can guide such analyses, which could be included in the EITI Report or a separate study. 

6. Respond to emerging corruption risks and cases. The MSG is encouraged to provide a narrative of whether it has considered publicly known corruption cases in the sector that are of national relevance and to document its discussion, response and recommendations (Requirement 1.5.e).  
 
The MSG can draw on EITI Reports and Validation, which often reveal discrepancies, governance weaknesses and red flags that signal potential corruption. The MSG should proactively address these in line with annual work plans (see Step 2) to foster a culture of continuous oversight.  
 
Media coverage and public allegations may also expose corrupt practices. Occasionally, stakeholders may report misconduct directly to the MSG. In such cases, the MSG is encouraged to take prompt actions to remain responsive to real-time issues.

The MSG may consider the following steps:

• Initial briefing: Invite relevant members or external experts to brief the MSG on the case.
• Assessment and decision: Determine the level and type of MSG engagement, considering the case’s relevance to the sector, alignment with MSG objectives and potential reputational risks. Based on this assessment, options include issuing a public statement, monitoring or taking direct action. 
• Public statement: The MSG chair may release a statement advocating for transparency and adherence to national laws and global standards.
• Monitoring and documentation: The MSG may assign a team or committee to track the case and document it in the EITI Report or as a separate study.
• Direct action: The MSG may raise awareness, recommend preventative measures, engage stakeholders or inform reforms to address regulatory gaps (see Step 3.1).

To streamline this practice, the MSG could codify these steps into a standard response procedure, emphasising the use of EITI data to address cases effectively. 

7. Consider potential implementation pitfalls and solutions. In implementing anti-corruption activities, the MSG should be aware of potential challenges and plan measures to address them: 

• Timing: Clear timelines and resources provide direction and can help avoid delays. The MSG should align timelines with opportunities in national reform processes, such as legislative approvals, strategic development plans or international anti-corruption commitments.  
• Resources: Insufficient financial and technical resources can hinder implementation. The MSG should ensure adequate funding, seeking support from national and international partners when needed.  
• Reporting burden: Government entities and companies may need to report under various global standards and national frameworks, which may affect the quality of engagement in anti-corruption efforts. Various frameworks, such as the Initiative for Responsible Mining Assurance (IRMA) Standard for Responsible Mining, OECD’s Due Diligence Guidance for Responsible Supply Chains of Minerals and Global Reporting Initiative (GRI) standards, provide valuable tools to address corruption. Understanding the similarities and differences among these standards allows the MSG to streamline efforts, avoid duplication and integrate complementary disclosures into EITI reporting.

A monitoring framework enables the MSG to link its overall objectives (Step 1), anti-corruption activities (Step 2) and actual results achieved (Step 3). By outlining activities, expected outcomes and regularly reviewing outputs, the MSG can strengthen implementation, demonstrate value and garner support. 

The time needed for this step depends on MSG capacity and resources. Routine monitoring should be conducted at least annually, though more frequent checks are encouraged to ensure implementation is on track.

Key steps to consider:  

1. Align monitoring with EITI processes. The MSG should align its monitoring framework with EITI processes to streamline preparation for Validations, annual work planning and progress reporting. This alignment makes it easier to monitor progress on anti-corruption efforts. Key processes include: 

Step 1: Identify corruption risks in license allocation and contracting

• Conduct a corruption diagnostic analysis and/or consult relevant stakeholders to identify vulnerable stages (e.g. application, review, negotiation, approval), commodities or practices (e.g. opaque negotiation, short application to award dates, staffing deficits) in the licensing process.
• Discuss and agree on how EITI Requirements 2.1, 2.2, 2.3 and 2.4 can help address these risks.

Step 2: Agree objectives and develop an activity plan

• Set objectives for addressing corruption (e.g. to ensure fair competition by enhancing the integrity of lithium licensing and contracting procedures).
• Review the license register to identify corruption risks (e.g. unusually short or long licensing timelines) and prepare a policy brief to address governance weaknesses (e.g. ambiguous technical criteria and discretionary policies).
• Facilitate discussions among licensing officials on using beneficial ownership data in license allocations.
• Engage regulatory bodies (e.g. minerals, petroleum or anti-corruption commissions) to align priorities and define roles.
• Invite relevant agencies to participate in the MSG as a member or observer
• Sign a memorandum of understanding (MOU) with the anti-corruption agency for annual updates on potential cases for investigation.

Step 3: Implement activities

• Secure adequate funding for activity implementation.
• Carry out activities likely to achieve the greatest impact.
• Invite the mining or petroleum authority to provide an update on an ongoing cases and establish a working group to monitor cases.

Step 4: Monitor results

• Consider including the following indicators in the monitoring framework:
  • Input: Number of license process analyses conducted by the MSG.
  • Output: Number of recommendations directed at specific actors or agencies.
  • Outcome: Adoption of recommendations to inform regulatory reforms.