Working Together

EITI Progress Report 2019

Government: from commitments to action

The EITI tracks and assesses government’s progress on commitments and recommendations.

A key strength of the EITI is its emphasis on government commitment, which is necessary for the EITI to realise its value as a tool for disclosure, analysis and reform.

Governments lead EITI implementation. Whilst the most successful EITI countries are those with a strongly committed government, the commitments need to be translated into action.

EITI reporting frequently uncovers gaps in compliance and disclosure, which can exacerbate corruption risk. The recommendations from EITI reporting often lead to tangible improvements in administration and financial management. Through regular implementation support and Validation, the International Secretariat and Board assess if these recommendations have been implemented and identify corrective actions relevant for multi-stakeholder groups and governments.

Linkages to open government and open data

Many implementing countries link their EITI process to wider government work on open government and open data. There is often a close link between the EITI and commitments made through the Open Government Partnership (OGP). Currently there are 134 OGP commitments relevant to EITI Requirements. These include EITI implementation, revenue transparency, beneficial ownership, contract transparency, open data and e-government. In May 2018 the EITI and the OGP signed a memorandum of understanding (MoU) to strengthen these linkages and collaboration.

Ukraine's transparency law

On 18 September 2018, Ukraine passed Law 2545-VIII ‘On ensuring transparency in extractive industries’. The legislation achieved a broad base of support and sets out legal principles for the collection, disclosure and dissemination of data. It was hailed by campaigners as a milestone for transparency and accountability in the country’s oil, gas and mining sectors.

Safeguarding civic space and public debate

Civil society engagement is essential in translating greater transparency into greater accountability.

Guaranteeing civil society’s free and active engagement in extractive sector governance is a fundamental feature of EITI implementation. 

Yet it is clear that civic space is shrinking worldwide, including in some of the 52 EITI implementing countries. In some countries, the EITI’s multi-stakeholder process is a rare pocket of freedom in an otherwise repressed environment. This space is protected through the EITI Civil Society Protocol. Validation of this protocol seeks to document and assess freedom of expression, operation, association and access to decision-making of civil society representatives in their activities related to extractive sector governance.

This is no easy task. For example, self-censorship by activists is challenging to identify if they are reluctant to talk about it for fear of reprisal. The effects of restrictions are often hard to pin down and measure. Yet Validation seeks to ensure that all countries are measured by the same yardstick. Consistency upholds the EITI’s credibility, but it also means that each Validation decision taken by the Board builds precedence that affects future Validations.

National media, community organisations and think tanks are some of the primary users of EITI data. They draw on information disclosed through the EITI and recommendations from EITI reporting to hold governments and companies to account.

Using the EITI to hold companies accountable in the Philippines

Philippines EITI is helping indigenous communities monitor whether extractive companies are complying with their obligations. Companies operating on indigenous land are required by law to have contracts with the communities. The EITI collects data about the companies’ contributions and presents it to the communities, which have a chance to verify it. Companies participate in the process, which fosters dialogue about benefits from the sector.

Building trust through corporate integrity

In 2018, the EITI Board set milestone expectations for what it means to be an EITI supporting company, clarifying and strengthening previous guidance.

The EITI works closely with companies to build trust in resource-rich countries around the world, improve investment climate and ensure private and state-owned firms operate with the same level of transparency. 

Over 60 companies support the EITI, including global oil, gas and mining majors, commodity traders and financial investors. Revised disclosure expectations for supporting companies anticipate that they will publish comprehensive information on taxes and payments made to all EITI implementing countries. In addition, these companies will disclose all taxes and payments made to all governments, regardless of whether they are made to EITI implementing countries. Where this guidance is not followed, companies are expected to state the reason.

By engaging in multi-stakeholder dialogue and adopting a transparent disclosure policy, EITI supporting companies establish a common fact base about the important economic and social contributions they make. Disclosure builds trust between companies and communities and strengthens companies’ social license to operate. It also enables companies to contribute to building a more secure and predictable investment climate, improving governance and disclosure norms and strengthening institutions at national and sub-national levels.

By being open about the terms of our contracts with governments, everyone can see what we are contributing to our host societies and how we are more than just a miner.

Simone Niven
Group Executive Corporate Relations, External Affairs
Rio Tinto
 

Rio Tinto is the first major mining company to support the public disclosure of their mining contracts and licenses

By supporting contract transparency, the company is joining ranks with Total, as well as oil companies Kosmos Energy and Tullow Oil. In doing so, the company underlines that its mining operations bring benefits to the countries where they operate. Publishing its contracts with governments has created opportunities to engage openly with possible business partners, members of the community, and regional governments.

Diverse participation, shared benefits

Natural resources belong to all citizens.

Yet in many countries, there is uneven access to the benefits generated from extractives. The EITI is promoting greater engagement and diversity in decision making.

Making extractives work for women

Oil, gas and mining activities impact women and men differently. Evidence suggests that while the benefits of extractive industry projects are captured primarily by men, women bear a disproportionate share of the negative social, economic and environmental impacts.

The EITI contributes to strengthening revenue collection from the extractive sector. This increases the potential for governments to provide public services that promote gender equality and facilitate women’s entry into the workforce. The 2019 EITI Standard will require countries to disaggregate extractive sector employment data by gender, role and project. This will shed new light on the challenge of equal employment in the oil, gas and mining industries.

The 2019 EITI Standard will also strengthen the right to equal participation in natural resource governance. Multi-stakeholder groups will be required to consider gender balance in their composition, and to address the specific challenges women have in accessing information.

Hearing indigenous voices

Indigenous communities are often highly affected by extractive activities but have little say over how resources are governed. This is changing in some EITI countries. With its new encouragements to include information on environmental impact, the 2019 EITI Standard will trigger new disclosures that indigenous communities have long advocated.

A seat at the table for indigenous communities in Guyana EITI

One of the seats in Guyana’s multi-stakeholder group is reserved for a representative of indigenous peoples. Until oil production begins, gold mining represents a large part of the country’s extractive sector. Local civil society groups have undertaken EITI outreach in indigenous communities affected by mining.

As a result, the communities are now monitoring water quality in local rivers.