The EITI was formed in London in June 2003, when 140 delegates from governments, companies, industry groups, international organisations, civil society organisations and investors agreed the EITI Principles, establishing the EITI as a multi-stakeholder organisation and underpinning its mission.
The momentum for the EITI came in part from a growing body of research, which described how the potential benefits of oil, gas and mining activity were not being realised and mapped their association with increased poverty, conflict and corruption. Transparency and public dialogue were identified as an important starting point for remedying this “resource curse”.
Extractives governance was increasingly a matter of public interest in the years leading to the creation of the EITI. In 1999, the civil society organisation, Global Witness, launched a report that examined the opaque mismanagement of oil in Angola and attracted considerable attention. Coining the slogan “publish what you pay,” the report called on companies to adopt “a policy of full transparency [in] Angola and in other countries with similar problems of lack of transparency and government accountability”. This led to the birth of Publish What You Pay (PWYP) in 2002, a civil society group that advocates for transparency in the extractive sector.
The UK government saw an opportunity to develop an initiative built on the notion of equal transparency from governments and companies. Prime Minister Tony Blair introduced the idea of the EITI in a statement intended for the World Summit on Sustainable Development in Johannesburg in September 2002. In 2003, the UK Department for International Development (DFID) convened a meeting of civil society, company and government representatives who agreed that a reporting standard should be developed.
By setting a framework for concrete action, I firmly believe that the initiative can make a significant contribution to ensuring that the proceeds from mining and energy industries are used for development.
In its early years, therefore, the EITI focused on publication of extractive payments by companies to governments, revenues received by governments from companies and their reconciliation.
Responding to calls from the G8 and others to provide technical support to governments adopting transparency policies, a World Bank Multi-Donor Trust Fund (MDTF) was established in 2004. It disbursed almost USD 60 million in technical and financial assistance to EITI programmes in over 40 countries before being replaced by the Extractives Global Programmatic Support (EGPS) facility in 2016. The EGPS continues to support countries’ efforts to implement the EITI under its revenue transparency component.
A multi-stakeholder group, the EITI International Advisory Group (IAG), was established in July 2005 to make recommendations about the future of the EITI. This led to the formation of the international EITI Board, which held its first meeting in December 2006 in New York.
A further recommendation of the IAG was to introduce Validation, an assessment mechanism to ensure comparability across countries in the implementation of a global set of requirements and to provide constructive recommendations on their implementation. From the outset, multi-stakeholder governance was enshrined in this process.
In 2007, the EITI International Secretariat was established in Oslo, with the support of the Norwegian government.
By September 2006, more than 20 resource-rich countries had committed to implement the EITI, including Azerbaijan, Ghana, Nigeria, Norway and Peru. Azerbaijan and Nigeria were regularly reporting their extractive industry revenues and payments. A further three countries – Gabon, Guinea and the Kyrgyz Republic – had produced EITI Reports. Others were embarking on their publication. In May 2007, Nigeria became the first country to adopt national legislation, in the form of the NEITI Act, which mandated implementation of the EITI. By 2009, 30 countries were implementing the EITI, reporting a total of USD 200 billion in fiscal revenues.
EITI is a rare coalition that has made great progress in a relatively short time. EITI will succeed by promoting clear rules for transparency: establishing a process to monitor EITI implementation in different countries; and rewarding those nations that fully implement the initiative.
By 2013, various international institutions routinely cited their association with the EITI as evidence of their own commitment to good governance. The EITI’s reporting requirements were reflected in legislation in the US, EU, Nigeria and Liberia, the World Bank’s International Finance Corporation’s standards for extractive projects, and several country-level disclosure policies that addressed aspects of extractives governance such as contract publication.
The EITI Standard as it exists today evolved from the EITI Criteria.
At the second EITI Global Conference in March 2005, EITI stakeholders and implementing countries agreed the need for a consistent approach to the EITI Principles. This led to the creation of the EITI Criteria, which were introduced in the EITI Source book. The criteria focused on the publication of extractive payments by companies to governments, as well as revenues received by governments from companies.
While the EITI Criteria were a starting point for disclosure, they did not outline specific rules around the regularity and timeliness of reporting and the maximum period for meeting the criteria.
To address these gaps, the EITI Board issued versions of the EITI Rules at the EITI Global Conferences in 2009 and 2011. These introduced requirements for implementing countries. The 2011 edition included provisions around the timely and regular publication of data.
In 2011, an independent evaluation highlighted innovations from EITI implementing countries. However, the report concluded that the EITI’s narrow focus prevented it from delivering on the EITI Principles. The EITI Board and other stakeholders recognised the potential for countries to use the EITI as a platform to strengthen natural resource management.
The 2013 EITI Global Conference saw the launch of the EITI Standard 2013, which expanded the scope of EITI reporting beyond fiscal revenues and established the global benchmark for extractive transparency. It sought to make reports more understandable, relevant and accurate, and condensed the previous 21 requirements and policy notes into seven requirements. It also introduced more frequent and nuanced validations to incentivise continuous progress beyond compliance.
The EITI Standard 2016 was launched at the 2016 EITI Global Conference. It included new provisions and encouraged countries to build on their existing reporting systems and practices for EITI data collection. It also sought to bring greater transparency and accountability to all aspects of natural resource management, including tax transparency, commodity trading, beneficial ownership and licensing.
A revised Validation system in 2016 aimed to better recognise efforts to exceed the EITI Requirements and set out fairer consequences for EITI countries that had not yet achieved compliance.
The new EITI Standard encouraged countries to disclose data in open format to enable better access, usability and analysis of EITI disclosures. It also encouraged the systematic disclosure of data, drawing on existing online sources rather than developing separate systems for data collection.
The EITI Standard 2019 was launched at the 2019 EITI Global Conference following extensive consultations with the EITI’s constituencies – including implementing countries, supporting countries, supporting companies and civil society organisations.
This iteration of the EITI Standard represented a further evolution in extractives transparency. New provisions focused on making disclosure and open data a routine part of government and corporate reporting, to provide information to stakeholders in a more timely, relevant and accessible form, that supports its use in analysis and decision making. The EITI Standard 2019 required implementing countries to publish new contracts from January 2021 onwards, and introduced new requirements on environmental reporting, gender reporting and commodity trading.
The EITI has evolved from its beginnings as a set of rules focused on revenue collection into a global standard for the good governance of mining, oil and gas resources.
The standard raises expectations for good governance of the extractive sector, and now encompasses beneficial ownership, contract transparency and commodity trading as well as the gender and environmental impact.
The focus of EITI reporting has moved from compiling data to building systems for open data and making recommendations for reforms to strengthen extractive sector governance.
EITI data supports policy and public dialogue on post-pandemic recovery and on management of the economic implications of the energy transition. The EITI plays a critical role in addressing corruption, a persistent challenge in the extractive sector that reduces the level of domestic resources from the sector available for development.
Safeguards on civil society space are monitored through Validation, and the expected results of EITI implementation include building trust among stakeholders, facilitating national reforms, and improving investment climate.