The future shape of the EITI Standard

Strategy update.

The EITI Board has in recent months been considering the EITI in the next 3-5 years. Through this message we at the Secretariat are providing an update on the Board’s discussion, highlighting some keys areas of discussion, and addressing some concerns that have been reported to us.

The page dedicated to the future shape of the EITI will continue to be updated throughout the strategy discussions and will link to public consultations related to the issues being discussed.

One area of particular attention is Validation. There is already a consultation related to this, which closes 7 September. See more below.

Background 
Issues that the EITI Board is currently considering
1. Mainstreaming
2. Informing policy debate and dialogue
3. Clarifying the EITI Standard
4. Validation
Timetable for agreeing any improvements and consultations

Background

When the Board met in April in Brazzaville, it considered the paper “EITI in the next 3-5 years”. The paper reflected on many issues that the EITI ought to consider in the next 3-5 years. This included issues like how to increase impact, how to mainstream the EITI in government systems and corporate reporting, how to better inform policy dialogue, how the EITI Standard could be clarified and finally how validation could be improved.

 The minutes from the Board discussion are available here. These are some snapshots: 

 “The Board recognized the importance of mainstreaming the EITI into national systems…”

“The Board cautioned against making changes to the Standard but encouraged clarifying the provisions where needed, clearer nomenclature for country status, and ensuring greater flexibility in the application of the Standard by focusing on the progress that countries make towards meeting the requirements.”

Following the Board meeting, the chair Clare Short concluded: “The adoption of the EITI Standard in 2013 was a significant step forward. It took the EITI from being a set of rules about reporting, to a governance standard creating a platform for wider governance reform. Drawing on the first generation of EITI reports under the Standard, we concluded in Brazzaville that progress is promising in many countries.

However, it was also obvious that some aspects of our procedures need fixing if we are to assist countries to use the EITI to improve governance of the sector. It is not the case that we need major changes to the Standard. With a number of tweaks we could have an instrument that avoids creating bureaucracy, that leads to embedded transparency and an improved system of assessing impact and validating progress. I am glad that we had an opportunity to discuss these things. The Board members agreed on the need to continue the strategy discussion.”

Issues that the EITI Board is currently considering

1. Mainstreaming

The EITI Board is considering increasing the focus on mainstreaming and integrating extractive sector transparency in government and company reporting systems.  There is no doubt that the EITI Reports have and continue to be an important tool for bringing about transparency to how the extractive sector in implementing countries are governed. To date more than 244 fiscal years of data have been made available through EITI reporting. However, in the long term, extractive industry transparency should not be confined to the EITI and expensive reconciliation exercises, but become an integral part of how governments manage their sector.

Rather than simply relying on the EITI reporting mechanism to bring about transparency, governments implementing the EITI could to a greater extent make the information required by the EITI Standard available through government and corporate reporting systems such as databases, websites, annual reports, portals etc. EITI reports would then be less about compiling data, and more about summarising and analysing data that is already in the public domain. In some cases there might already be reporting mechanisms in place that the EITI can build on. In other cases such systems may not exist and need to be built, or are incomplete and require improvements. Non-reporting related aspects of the EITI, such as oversight by the multi-stakeholder group would still be maintained, not least given the important role that the MSG plays in trust building, discussing the trends that emerge from routine disclosures, and furthering the conversation about transparency and accountability.

To this end, the EITI is:

  • Establishing a mainstreaming pilot with the objective of testing different approaches to more mainstreamed transparency.
  • Considering revisions to the EITI Standard that would further enable implementing countries to refer directly to existing public information about the extractive sector where this is available, comprehensive, reliable and consistent with the requirements of the EITI Standard (Requirements 3, 4, and 5); and revisions to the provisions on adapted implementation (Requirement 1.5).
  • Revising the guidance note for scoping studies encouraging countries to undertake context analysis and baseline assessments of gaps and opportunities to strengthen existing government and company reporting systems.

2. Informing policy debate and dialogue

Another issue that is being considered is how the EITI can better support public debate, policy dialogue and reforms in implementing countries. One of the assumptions underpinning the EITI is that transparency will enable public debate about how the extractive sector is managed, which again may influence policy dialogue and reform towards better governance. Despite more than 200 fiscal years of EITI reporting, EITI data is still not generating debate in many countries. Only in some cases have the findings of EITI reports contributed to reform.

In order to address this, the Board is considering how EITI data can become more timely, accessible and used.  It is also looking at how to build capacity of stakeholders to analyse and interpret EITI data and how governments and MSGs can be incentivised to follow up on recommendations from EITI reporting and validation.

To this end, the EITI is:

  • Considering revisions to the EITI Standard regarding timeliness of non-revenue information (Requirement 2) as well as follow up on recommendations resulting from EITI Reports, including ensuring that recommendations are to a larger extent directed at improving sector management (Requirement 7.1).
  • Improvements to the use and quality of annual activity reports.
  • Increasing the focus on linking the EITI to public policy analysis and reform. To this end, the International Secretariat is working with partners on and developing a policy on open data and encouraging the development and adoption of open data standards.

3. Clarifying the EITI Standard

The EITI Board has agreed that it is not desirable to undertake any substantive revisions of the EITI Standard in 2015. However, the early lessons learnt from implementation of the Standard shows that some minor refinements and revisions may be needed, manly to clarify ambiguities and inconsistencies. It also includes reviewing whether the current layout of the EITI Standard with its seven requirements is comprehensible.

To this end, the EITI is:

  • Considering refinements to the EITI Standard seeking to address ambiguities or inconsistencies detected in the first two years of implementing the Standard.
  • Reviewing the outcomes of the beneficial ownership pilot.
  • Updating the Terms of Reference for Independent Administrators, reflecting lessons learnt from the first batch of EITI Reports.

4. Validation

Many stakeholders have expressed concern that Validation is unlikely to provide fair assessments. While the bar for achieving compliance should not be changed, there are concerns that the current Validation system does not adequately consider the diversity of implementing countries or take into account progress over time. There are also concerns about nomenclature and other terminology.

Thus, the EITI Board agreed at its 29th meeting in Brazzaville to consider developing proposals for a stronger Validation system and alternative nomenclature. It also agreed to consider whether the current Validation firms provide an adequate assessment of implementation efforts and value for money, or whether alternative means of conducting Validation should be explored. For further information, see our consultation on Validation.

Timetable for agreeing any improvements and consultations

The Board will next meet in Berne, Switzerland, on 22 October to consider more detailed proposals for improvements of the EITI Standard and the Validation system. Final proposals will have to be considered by the Board when it meets in December. Any revisions to the EITI Standard could then be announced at the EITI Global Conference in Lima in February 2016.

The Secretariat is also aware of a number of different conversations, training seminars and meetings at which it is suggested how the EITI can evolve and improve. It is welcome that so many discussions are already taking place - not least in the 48 implementing countries - about how to improve the EITI Standard. It is great that for example representatives from  French-speaking countries implementing the EITI recently met in Cote D’Ivoire, with the EITI chair Clare Short joining via Skype for a session about the strategy.

As soon as the Board has agreed to consider some concrete improvements, there will be further consultations on all suggested refinements to the EITI Standard. These consultations are likely to begin in early October.

EITI Stakeholders are at any time encouraged to be in touch with Board members and the Secretariat if it has comments on how the EITI Standard can be improved. Comments can be submitted to Dyveke Rogan (Drogan@eiti.org) or Jonas Moberg (Jmoberg@eiti.org).

Jonas Moberg