A call for concrete action on beneficial ownership – the EITI shows the way

EITI Chair Clare Short calls on G20 leaders to reaffirm support for the EITI at tomorrow's Leaders' Summit.

The EITI Chair Clare Short calls on G20 leaders to reaffirm their support for the Extractive Industries Transparency Initiative (EITI) at their forthcoming Leaders' Summit in Brisbane. At the G20 summit in St Petersburg in September 2013, the leaders expressed support for EITI as a means to battle corruption.

Short said: 
“The extractive industries are key drivers of economic development in many countries. For example, government revenues from the oil, gas and mining sectors often far exceed aid flows. If we are serious about development and job creation, we have to do more to ensure that these sectors are governed responsibly.

The G20 and G8 focus on tackling corporate secrecy in recent years have been welcome and continued leadership is required in turning political commitments into practical reality. Transparency about company and government payments is important for accountability, but tells citizens little about who owns extractive companies and ultimately benefits from the companies’ activities. In many cases, the identity of the real owners – the ‘beneficial owners’ – of the companies that have acquired rights to extract oil, gas and minerals is unknown, often hidden behind a chain of corporate entities. This opacity can contribute to corruption, money laundering and tax evasion in the extractive sector.

The EITI’s pioneering work on beneficial ownership is an important contribution towards tackling this challenge. In the Democratic Republic of Congo, 140 extractive companies have committed to publish who their real owners are by the end of the year. Another ten EITI countries are following suit by demanding the extractive companies that operate in their countries to disclose their ownership details through the EITI reporting process or through registers that will be made public. While there will of course be difficulties along the way, this collective effort is a noteworthy first step from countries that have limited capacity to take on this global challenge but that also stand to lose the most from continued opacity.

Already we see several EITI implementing countries making big strides on these issues. The EITI Standard also addresses other issues such as license and contract transparency  to ensure that the wealth from a country’s natural resources benefit all its citizens.” 

For more information: 
https://eiti.org/files/document/factsheet 
https://eiti.org/pilot-project-beneficial-ownership