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Guidance note

Establishment and governance of multi-stakeholder groups

EITI Requirement 1.4

Guidance for multi-stakeholder groups (MSGs) on the establishment and governance of MSGs

Applicable EITI Standard
2019
February 2022

Summary

The multi-stakeholder approach is central to the principles and operations of the EITI, and it is reflected in how the EITI is governed and implemented. EITI implementing countries establish a multi-stakeholder group (MSG) – comprised of representatives from government, companies, and civil society – to oversee EITI implementation. Although the mandate of the MSG varies across countries, it is the main decision-making body. It is responsible for setting objectives for EITI implementation and monitoring the disclosure of data in accordance with the EITI Standard, and it ensures that the data and analysis stemming from EITI reporting contributes to public debate and informs decision-making.

The EITI MSG is a crucial decision-making space for stakeholders to influence and shape decisions on natural resource governance in their country, and thereby provides opportunities for participation from a wide range of actors. EITI implementing countries should ensure that MSG nomination, selection and renewal procedures are in place to ensure inclusive participation and representation of all interested stakeholders. Doing so will help create conditions for a broader and more inclusive management of natural resources for the benefit of all citizens.

The MSG mandate must be clearly defined for a country to be accepted as an EITI implementing country and is critical for EITI implementation. While the MSG is mandated to determine the rules and procedures regarding its own work and decision-making, the EITI Standard contains minimum requirements related to the role, rights and responsibilities of the MSG that can help ensure efficient MSG oversight of the EITI implementation process. 

This note provides guidance on how to establish and manage an effective EITI MSG, and Annexe A provides key considerations for developing Terms of Reference (ToRs) that establish the scope, roles and responsibilities of the MSG.


Overview of steps

Steps Key considerations Examples

Step 1:
Conduct outreach to stakeholders

  • Are invitations to participate in the MSG transparent and open?
  • Are outreach efforts being made to a wider group of stakeholders that have an interest in extractive sector management?
  • Are marginalised or remote groups being considered?
  • Mexico
  • United States

Step 2:

Nominate MSG members

  • Does the MSG have adequate and inclusive representation of key stakeholders (encompassing geographic and production areas, diverse civil society, key government agencies, key industry actors, gender balance)?
  • Do constituencies autonomously and independently nominate their representatives?
  • Are senior government officials represented?
  • Armenia
  • Ghana
  • Guinea
  • Nigeria

Step 3:

Agree Terms of Reference (ToRs) for the MSG, including decision-making procedures 

  • Are the agreed ToRs clear and understood by all constituencies?
  • Do the ToRs cover all issues of MSG governance (i.e. role, responsibilities and rights, approval of work plan and oversight of implementation, internal rules and procedures)?
  • Ecuador
  • Madagascar
  • Philippines
  • Zambia

Step 4:

Consider establishing a legal basis for the MSG 

  • What are the potential legal barriers to EITI implementation?
  • What legal instruments are available?
  • Liberia
  • Madagascar
  • Mauritania
  • Nigeria
  • Peru
  • Ukraine

Step 5:

Consider establishing a national secretariat to support the MSG

  • What kind of support does the MSG require from a EITI national secretariat?
  • What are the roles and responsibilities of the national secretariat? Are these included in the MSG ToRs?
  • Ecuador
  • Uganda

 


How to implement Requirement 1.4

Step 1: Conduct outreach to stakeholders

In establishing the MSG, the government must ensure that the invitation to participate in the group is open and transparent (Requirement 1.4.a.i). In practice, the invitation to participate in the EITI process is often made in the early stages of preparing for implementation. It generally begins with the government announcing its intention to implement the EITI and inviting relevant industry and civil society stakeholders to participate in the process.

In some cases, an informal working group or interim MSG is formed to oversee the country’s EITI candidature process. This typically involves conducting outreach to stakeholders, establishing procedures for nominating MSG members, forming MSG constituencies and developing the MSG ToRs and work plan. Special attention should be given towards including women’s organisations, indigenous groups and historically marginalised groups throughout the process of establishing an MSG. Some countries have found it useful to commission stakeholder assessments, political economy studies, feasibility studies and legal reviews as part of the preparations for EITI candidature.

CASE STUDIES

Mexico: Reaching out to stakeholders and forming an MSG

Mexico conducted a thorough outreach process by raising awareness and consulting stakeholders from government, industry and civil society. The process was supported by external organisations with expertise in civil society engagement and policy-making.

The MSG’s government constituency included representatives from key ministries who agreed to rotate leadership of the constituency. The industry constituency included the state-owned enterprise PEMEX, the hydrocarbon companies’ association AMEXHI and the mining companies’ association CAMIMEX. The civil society constituency was formed on the basis of a thorough selection process coordinated by a steering group composed of three leading organisations and facilitated by a third party, Colaboración Civica. The process included several preparatory meetings and open applications.

United States: Conducting outreach to establish an MSG

In establishing the EITI MSG in the United States, the US government, with the help of a neutral facilitator, conducted extensive public outreach to identify relevant stakeholders in the country and understand how to form a representative and inclusive MSG. The process involved public listening sessions in areas hosting extractive activities and companies, a webinar to engage stakeholders remotely, workshops and a public comment period.

Step 2: Nominate MSG members 

The MSG must be comprised of appropriate stakeholders (Requirement 1.4.a.ii), including but not necessarily limited to:

  • Relevant government entities, which can also include parliamentarians.
  • Industry, including private companies and state-owned enterprises.
  • Civil society, including independent civil society groups and other groups such as unions and media outlets.

All stakeholders should be adequately represented. The concept of adequacy may be relevant where there is significant diversity of geographical areas and commodities produced. However, constituencies do not necessarily need to be equally represented numerically. Some countries that have numerous and diverse extractive companies, government agencies involved in revenue collection, or civil society groups working on extractives governance have applied a weighting system to determine the number of representatives from each constituency. Where a country has many interested stakeholders, the MSG can include full members as well as alternate members to maximise inclusion while ensuring efficiency in decision-making.

Each stakeholder group must have the right to appoint its own representatives (Requirement 1.4.a.ii). In addition, the government is required to ensure that senior government officials are represented on the MSG. In many countries, civil society coalitions and companies select their own representatives to join the MSG, for example by caucus or through an industry association. Sometimes public notices are issued requesting nominees. 

Gender representation

Government, industry and civil society constituencies all have a responsibility to consider adequate gender representation on the MSG in accordance with the EITI Standard. MSGs may wish to track gender composition of members and alternates on a regular basis to report on progress towards gender inclusion. MSGs could also identify and document the limitations in achieving gender balance and outline key steps needed to overcome them. The EITI’s guidance on gender provides further examples of how MSGs can improve gender representation in EITI implementation.

Examples

Diversity and inclusion in MSGs

Nigeria

To guarantee regional diversity, Nigeria’s NEITI Act 2007 Section 6(v) provides for the representation of geo-political zones and regions in the MSG. Of the 15 MSG members, six are selected from different political zones.

Armenia

In Armenia, the civil society constituency is composed of one representative from the scientific community, one from a regional civil society group and three from national civil society groups.

Ghana

Ghana’s MSG guarantees two seats for subnational representatives. In 2021, the MSG included members from the Ellembelle District, representing oil and gas communities, and the Tarkwa Nsuem Municipal Assembly, representing mining communities. The MSG has also considered including traditional authorities (chiefs) into its subnational representation.

Guinea

In 2021, the civil society constituency in Guinea amended its ToRs to include a formal requirement that a third of MSG representatives be women.

Step 3: Agree Terms of Reference for the MSG, including decision-making procedures 

Consensual decision-making is a core element in multi-stakeholder processes, and the MSG should agree and specify procedures for decision-making in the ToRs (Requirement 1.4.b.vi). The ToRs should at a minimum include: provisions on the role, responsibilities and rights of the MSG (Requirement 1.4.b.i-iii); the approval of work plans, EITI Reports and annual progress reports (Requirement 1.4.b.iv-v); and internal governance rules and procedures (Requirement 1.4.b.vi- viii).

Collaboration and cooperation to reach general agreement among all MSG members on all decisions is a fundamental part of the EITI process. The EITI Standard requires an inclusive decision-making process throughout implementation with each constituency being treated as a partner (Requirement 1.4.b.vi). Experience with implementation shows that where decisions are taken without consensus, stakeholders could lose trust in the EITI process and implementation may be jeopardised. 

In agreeing procedures for decision-making, the MSG may wish to specify voting rules. Where the MSG decides that voting rules are needed, it is recommended that resolutions are adopted by a qualified majorityHideIn general, a qualified majority is a majority in a vote that reaches a pre-set threshold value larger than 50% and, often, follows rules on a minimum of votes from each of the constituent parts of the decision body. A qualified majority is often required instead of a simple majority for reaching a decision on important matters. and include support from all the constituencies. This is essential to ensure inclusive decision-making, including in cases where stakeholders have unequal numerical representation on the MSG. The MSG is also advised to agree quorum rules. 

See Annexe A for considerations and guidance on developing MSG ToRs. 

Case studies

Zambia: Establishing clear selection and decision-making processes

In 2019, Zambia’s Validation found that the invitation to participate in the MSG was open and transparent, stakeholders were being adequately represented and the MSG ToRs were being followed. The ToRs and the MSG selection process were clear and understood by the MSG members, and decision-making was conducted in an inclusive way that treated each constituency as a partner.

Source: Republic of Zambia (2011), “Terms of Reference of the Zambia EITI Council (ZEC)”.

Madagascar: Establishing processes, roles and responsibilities for MSG constituencies

Established by presidential decree in 2017, Madagascar’s MSG ToRs include calls for applications to be part of the industry and civil society’s constituencies. The roles of the MSG and national secretariat are clearly defined, as are processes related to working groups and observers. Constituencies appoint leads who are mandated to mobilise each constituency position after broader consultations. The ToRs also explain key terms such as Independent Administrator, EITI Champion, EITI, EITI Report and Validation.

Philippines: Establishing principles of engagement

The PH-EITI ToRs outline the mission and detailed objectives for EITI implementation as well as the principles for engagement between government, business and civil society stakeholders. These include integrity, inclusivity, commitment to consult, capacity building and empowerment. They also define the roles of the MSG as a whole and by each constituency and link the MSG’s work to national priorities.

Ecuador: Establishing constituency autonomy and independence

Ecuador’s MSG ToRs establish that representatives of each constituency are to be autonomous and independent. They also define the role of the MSG and the members’ rights and responsibilities. The ToRs include the obligation to declare potential conflicts of interest, define the observers’ policy and the functioning of selected working groups to ensure efficient MSG work, and regulate the functioning of a national secretariat to support the MSG.

Step 5: Consider establishing a national secretariat to support the MSG 

In the majority of EITI implementing countries, the government establishes a national secretariat to support the MSG in carrying out the day-to-day activities related to EITI implementation. The national secretariat is often housed within the line ministry responsible for EITI implementation. The financial and human resources allocated to the activities of the national secretariat vary considerably across countries. In some cases, two or three staff members are sufficient to support implementation, while in other countries national secretariats include up to 50 staff.

The EITI has no requirements related to the establishment and operation of national secretariats, but in many countries the MSG has found it useful to specify the role and responsibilities of the national secretariat in the MSG ToRs. In the absence of a dedicated national secretariat, some MSGs are supported by staff from the host government agency or ministry which provide secretarial and coordination support.

Case studies

Ecuador: Establishing the roles and responsibilities of the national secretariat

Ecuador’s ToRs provide for the establishment of a national secretariat and outline a clear division of functions and responsibilities between the MSG members, the MSG’s lead and the national secretariat. The national secretariat’s responsibilities include convening and documenting MSG meetings, submitting reports and studies for MSG approval, maintaining the national EITI website, coordinating and following up on the implementation of the EITI Ecuador work plan, coordinating a communications strategy and processing funding requests for EITI implementation.

Uganda: Leveraging the national secretariat for technical support

To support the MSG in developing and implementing a work plan that is aligned to national priorities and the EITI Standard, Uganda established a national secretariat with the requisite technical capacity. The Uganda national secretariat provides technical support and includes two economists, a governance specialist, a legal officer, a statistician and a communications officer. The MSG has established technical committees that work on various thematic issue

Absence of a national secretariat

As Mexico does not have an EITI national secretariat, the MSG is supported by staff in the government’s Secretary of Economy. In Cote d’Ivoire, the ToRs for the MSG establishes a “Technical Secretariat” but in practice this role is filled with officials from the host government agency. In Norway, staff in the Ministry of Petroleum coordinate EITI activities.


Mainstreaming multi-stakeholder consultation and oversight 

In cases where EITI disclosures are systematically disclosed via government and company systems, implementing countries may consider opportunities for multi-stakeholder consultation and oversight using representative bodies outside of the EITI MSG. Using alternative and established channels for consultations and oversight (e.g. fora such as parliamentary committees and other public bodies that engage with extractives governance) can allow the MSG to transition from overseeing EITI reporting to holding wider discussions about governance reforms, embedding transparency and accountability mechanisms in government systems, and informing public debates and policy-making. For countries considering mainstreamed implementation, the role of the MSG is likely to evolve and vary from country to country. As more data is disclosed systematically, MSGs might consider undertaking more analysis and use of the data provided. 

Integrating existing bodies into the consultation and oversight process of the EITI may be possible under certain conditions (see examples below). The approach should have the potential to increase stakeholder engagement and make strengthen constituencies’ participation. Such bodies must still maintain the same level of commitments, roles and responsibilities as set out in the EITI Standard. 

A mainstreamed approach to MSG oversight would also require a request for adapted implementation.  Where proposals for mainstreamed implementation do not retain conventional MSG oversight, care should be taken to ensure that the alternative processes for multi-stakeholder consultation and dialogue encompass: 

  • Opportunities for stakeholders to shape the scope and nature of extractives transparency; 
  • Opportunities for stakeholders to make recommendations for governance reform and be more involved in public policy processes;
  • That all stakeholders have an opportunity to shape decisions, be heard and contribute.   

Where these conditions are not met, adapted implementation requests to mainstream multi-stakeholder oversight will not be approved.
In addition to the above criteria, MSGs may also wish to consider stakeholders’ capacity to engage in extractives governance in their proposals for adapted implementation. Countries are encouraged to consider whether other institutions, bodies or mechanisms could be engaged in the multi-stakeholder approach. 

Regular disclosure of extractive industry data is of little practical use without public understanding of what the figures mean and debate about how natural resource revenues can be used effectively. Relevant stakeholders should be engaged in dialogue about EITI data and findings emerging from EITI implementation. Countries could consider alternatives ways of using existing bodies, fora or channels at both national and subnational levels to spur debate and analysis of EITI data.  
 

Examples

Opportunities to use existing bodies for consultation and dissemination of EITI data and findings

In Kazakhstan, there have been discussions about delegating the MSG’s responsibilities of disseminating and promoting use of data to public councils, which are comprised of government and civil society representatives and established by law at the regional and local levels. Although these councils do not adopt a multi-stakeholder approach, local stakeholders appear to consider them appropriate for the purpose of discussion and debate about EITI data.  

In Mexico, the hydrocarbon licensing and regulatory body CNH (Comisión Nacional de Hidrocarburos) established a consultative body with external members to advise on the commission on licensing, contracting and monitoring of contract obligations by operators.

In various Latin American countries, the national Open Government Partnership (OGP) bodies are addressing governance and accountability issues in areas interlinked with the EITI. In Mexico, OGP commitments related to beneficial ownership are monitored by stakeholders also active in EITI work. In Honduras, the Ministry of Transparency and EITI Champion and civil society organisations engaged in the MSG are also involved in other initiatives like OGP and the Infrastructure Transparency Initiative (CoST).  

In Norway, stakeholders agreed that various industry and civil society fora, conferences, parliamentary hearings and debates are better avenues for stakeholder input on natural resource governance than a designated EITI MSG. Norway’s request for adapted implementation, that does not include a designated EITI MSG, was approved by the EITI Board. 

In the Philippines, provincial multi-stakeholder bodies are tasked to oversee the governance of the mining sector. These bodies are consulted and participate in the EITI’s dissemination activities at the subnational level.

In Timor-Leste, a multi-stakeholder consultative council advises parliament on the management of the Petroleum Fund. The council is comprised of representatives from government, industry, civil society and parliament. It has a statutory role in overseeing and advising on the policies and practices regarding the management of the revenue from oil and gas, and could constitute an alternative platform for future EITI-related dialogue. 


Flexible reporting

The COVID-19 pandemic has posed new challenges for most EITI implementing countries, such as limitations on convening in-person meetings and disseminating information. In recognition of these challenges, the EITI Board agreed several measures to provide flexibility in EITI implementation and reporting,  including guidance on convening MSGs. 

In cases where MSGs are unable to convene meetings due to unexpected crises such as the COVID-19 pandemic, the EITI Board will take this into account during Validation when assessing whether the MSG approved key decisions relating to the EITI process. However, MSG chairs must demonstrate that they have taken “reasonable steps” to continue MSG activities, which could include:  

  • Circulating documents with sufficient notice prior to meetings or conference calls; 
  • Reaching out to MSG members by phone or online;
  • Providing sufficient time for MSG members to provide input to draft documents;
  • Requesting confirmation from MSG members from each constituency to approve decisions.

The approach approved by the Board on flexible reporting will be effective until the end of 2022. This allows countries to learn from lessons from implementing the EITI Standard through innovative ways during this time. Some early lessons have highlighted the increased engagement of MSGs in ensuring data is timely disclosed and disseminated. This, in turn, has improved the MSG oversight of the implementation of the EITI.

Case studies

Argentina: Adopting a flexible approach to reporting

EITI-Argentina adopted a flexible approach for its 2018 EITI Report. The MSG was directly responsible for the oversight of data collection, drafting and preparing the report, with assistance from an external consultant who fulfilled a limited number of functions normally assigned to the Independent Administrator. The MSG’s approach combined systematic disclosure and the collection and publication of missing data points in a shorter report. This was supplemented with information on how COVID-19 impacted the extractive industries in 2020. The adoption of the flexible approach provided an opportunity to the MSG to be more directly involved in the EITI implementation beyond its oversight mandate.


Source: EITI-Argentina (2020), Informe EITI-Argentina 2018
 

Zambia: Adopting a flexible approach to reporting

Zambia EITI adopted a flexible approach for its 2019 EITI Report, which includes a risk-based approach to reconciliation and the impacts of COVID-19. The MSG administered a questionnaire to assess the government relief measures for companies. In preparation for the 2020 EITI Report, the MSG decided to be more involved in the production of the report, without the support of an external Independent Administrator. This has given the MSG an opportunity to strengthen its oversight and scrutiny of EITI disclosures.


Source: Zambia EITI (2020), Zambia EITI Report 2019
 
Requirement
1.4