The EITI conducted an assessment of 62 companies in the mining, oil and gas and commodity trading sectors that commit to the Expectations for EITI supporting companies. These cover nine areas that aim to strengthen corporate disclosures and accountability practices.
By upholding the Expectations, many EITI supporting companies are at the forefront of promoting transparency and good governance in the extractive sector worldwide. In 2021, over 60 EITI supporting companies in the mining, oil and gas and commodity trading sectors were assessed on their progress in meeting the Expectations for the first time. These were subsequently strengthened and clarified, and companies underwent a second assessment against the revised expectations this year.
The assessment serves to highlight good practices and identify opportunities for further progress. It involved a rigorous process with desk research to identify all relevant controlled subsidiaries, data collection and review of public company disclosures, initial assessments, company feedback and internal quality assurance before individual assessments are finalised by the International Secretariat.
The results demonstrate that the majority of EITI supporting companies are meeting most of the Expectations, with many setting leading examples for corporate disclosures and accountability practices. Opportunities remain for companies to demonstrate adherence to the expectations, particularly on declaring support for beneficial ownership transparency and support for contract transparency, and on clarifying how companies use beneficial ownership data of joint venture partners, contractors and suppliers in their due diligence processes.
A summary of results is provided below.
Individual assessment results
Results of assessment of companies’ progress in meeting the Expectations for EITI supporting companies
Publicly declare and publish support for the EITI and the objective of the EITI Association to make the EITI Principles and the EITI Standard, the internationally accepted standard for transparency in the oil, gas and mining sectors.
Almost all EITI supporting companies meet this expectation, having published a statement of support for the EITI and the objective of the EITI Association on their company website or in other company reporting. These statements varied in content, often highlighting companies’ particular areas of interest. Three companies partially meet this expectation because their statements are either outdated or not published, and a further two companies do not meet the expectation.
Make comprehensive disclosures in accordance with the EITI Standard in all EITI implementing countries where the company or its controlled subsidiaries operate. Where not disclosed in other company reporting, publicly disclose a list of controlled subsidiaries operating in the oil, gas or mining sectors in EITI implementing countries.
The vast majority of the 51 supporting companies that have operations in EITI implementing countries provide disclosures in accordance with the EITI Standard. However, three of these only partially meet this expectation because they do not provide comprehensive disclosures in line with the EITI Standard in all implementing countries where their subsidiaries operate. Two of these companies are state-owned enterprises, which are subject to different requirements under the EITI Standard. Furthermore, all supporting companies have published a list of controlled subsidiaries, where applicable.
Publicly disclose taxes and payments to governments at a project-level in line with the EITI Standard in all non-EITI implementing countries where the company operates unless disclosure is not feasible. Where not feasible, the country-specific legal or practical barriers to disclosure should be publicly explained.
Where applicable, 89% of supporting companies meet this expectation. Fifty companies disclose taxes and payments to governments in non-EITI countries where they have operations in the oil and gas and mining sectors. Four companies partially meet this expectation, having disclosed taxes and payments to governments in some, but not all, non-EITI countries where they operate. Two companies did not disclose this information at a country level.
Fewer companies, however, disclose taxes and payments to governments in non-EITI countries disaggregated by project (64%). Six companies do not disclose this data at a project level. The companies not providing disclosures by country, or by country but not by project, are generally headquartered in jurisdictions which do not require such disclosures. These results demonstrate that companies, alongside other EITI stakeholders, have an opportunity to champion reforms that institute project-level reporting requirements.
While this expectation does not apply to some companies, including commodity trading companies, supporting commodity traders disclosed certain taxes and payments to governments where feasible, and outlined plans for additional future disclosures.
- Vale’s Tax Transparency 2021 Annual Report details taxes and royalties paid in jurisdictions where the company has a presence, by the level of government in each country and at a project level.
- BHP’s Economic Contribution Report includes information about taxes and payments to governments in non-EITI implementing countries, and further disaggregates this data by project and by suppliers, employees, shareholders, investors, and social investments.
- In addition to publishing payments and taxes to countries where it operates, Repsol also discloses payments for extractive production entitlements, license fees, and rental fees in non-EITI implementing countries through its 2022 Report on payments to governments on oil and gas exploration and production activities.
For companies buying oil, gas and/or mineral resources from the state in EITI implementing countries, disclose volumes received and payments made in line with the EITI Standard and the EITI reporting guidelines for companies buying oil, gas and minerals from governments, unless disclosure is not feasible.
Only 12 companies buy oil and gas from governments. Of these, seven fully meet the expectation with Equinor, Glencore, Gunvor, TotalEnergies, and Trafigura providing industry leading disclosures. Four companies provide partial disclosures of payments made to the state for trading activities, which are not fully in line with the EITI’s reporting guidelines. One company did not provide any disclosures of payments made to the state for trading activities.
A further three companies buy minerals from governments; however, the EITI has yet to develop reporting guidelines for these purchases. The expectation was therefore assessed as not applicable to these companies.
In line with the EITI Standard, publicly disclose audited financial statements, or the main items (i.e., balance sheet, profit/loss statement, cash flows) where financial statement are not available.
All supporting companies disclose their audited financial statements and meet this expectation.
Publicly declare and publish support for beneficial ownership transparency and publicly disclose beneficial owners in line with the EITI Standard, recognising that listed companies will disclose the name of the stock exchange(s), include a link(s) to stock exchange filings where they are listed and otherwise do what is required by applicable regulations and listing requirements.
All but two supporting companies disclose their beneficial owners, either directly or according to applicable stock exchange regulations and listing requirements. While the remaining two companies partly disclose beneficial owners, the full information could not be located. However, around 44 companies (71%) have yet to publish a statement of support for beneficial ownership transparency, and few companies provided an explanation for not publishing such a statement.
- Anglo American, BHP, Glencore, Newmont, Repsol and Rio Tinto were signatories to a public Statement by companies on beneficial ownership transparency in 2021.
- Africa Oil Corp, Centerra Gold, Chevron, Equinor, FreeportMcMoRan, Neptune Energy, Pertamina, Repsol, South32 and Trafigura have provided leading statements of support.
Engage in rigorous due diligence processes and publish an anti-corruption policy setting out how the company manages corruption risk, including how the company collects and takes risk-based steps to use beneficial ownership data regarding joint venture partners, contractors and suppliers in its processes.
All supporting companies publish an anti-corruption policy in some form. However, these vary greatly and are not always comprehensive enough to be deemed as fully meeting this expectation. Policies range from standalone anti-corruption polices to inclusion of anti-corruption provisions in codes of conduct and various other business integrity and due diligence policies.
While all companies had anti-corruption policies, very few of these policies specifically set out how the company collects and takes risk-based steps to use beneficial ownership data regarding joint venture partners, contractors and suppliers in its processes, in line with this expectation. As such, a third of companies were assessed as only partially meeting this expectation.
- BHP’s “Our Code” states that employees should “always understand the identity, role and interests of the person or business who you are dealing with (including the beneficial ownership of companies” and “never [d]eal with a party that refuses to disclose its true identity (including details of company beneficial ownership)”.
- Eni’s website describes how its due diligence efforts include the reconstruction of the ownership structure through the identification of all subjects who hold directly or indirectly, individually or collectively, shares/quotas of the potential counterparty.
- Equinor’s Integrity Due Diligence (IDD) process includes collecting information to understand who their counterparties are (including risk-based verification of beneficial owners), their values and how their business is conducted.
Publicly declare and publish support for governments’ efforts to publicly disclose contracts and licenses that govern the exploration and exploitation of oil, gas and minerals in line with the EITI Standard, and contribute to public disclosure of contracts and licenses in EITI implementing countries consistent with government procedures.
Forty-three (73%) of applicable supporting companies published a statement of support for contract transparency, including seven of the 11 supporting companies that do not operate in EITI implementing countries. Sixteen companies have not published a statement of support for contract transparency, however many are working to publish a statement in due course. Most subsidiaries of supporting companies operating in implementing countries are contributing to public disclosure of contracts and licenses.
- In recognition of ICMM’s commitment in 2021 for member companies to disclose mineral development contracts entered into from January 2021, the International Secretariat assessed ICMM companies as meeting this first aspect of Expectation 8. Some ICMM companies, including Glencore, Hydro, and Vale have publicly endorsed contract transparency.
- In its statement of support for contract transparency, Alcoa states that it “supports enhancing the transparency of mineral revenues” and that the company “will disclose contracts with governments related to minerals development, where they are not subject to a confidentiality undertaking and encourage governments to allow such disclosure.”
Publish a commitment and/or policy on gender diversity in the oil, gas or mining sectors and support reporting by EITI implementing countries under the EITI Standard by disclosing employment in the sectors disaggregated by gender.
Most companies (56 of 62) publish a commitment or policy on gender diversity in line with this expectation. Two of these policies are not comprehensive and therefore only partially meet the expectation, while the policies for four companies could not be located. Most companies (57 of 62) also disclosed employment data disaggregated by gender. However, disclosures from two companies were minimal and do not cover all employment, and therefore only partially meet the expectation. Three companies did not appear to provide such data.
- As part of their commitments to gender diversity, several companies including Antofagasta Minerals, Boliden, Ivanhoe Mines, and Sibanye Stillwater have committed to increasing the diversity of their global workforces to be 25-30% female by 2025.
- Boliden publishes gender employment data by further disaggregated by type of contract, region, age, turnover rate, and training hours on its website.
- Vale publishes gender employment data by functional category, gender identity, age group, education and race.
The EITI strives to create a race to the top, with EITI supporting companies in the lead of corporate transparency and accountability. The assessment responds to EITI stakeholders’ desire to raise awareness about the Expectations, to highlight industry-leading disclosure practices, and to promote company progress in fully meeting the Expectations. The process successfully focused companies’ attention on the Expectations and prompted many companies to enhance their disclosures to align with them.
However, there is still work to be done, for example to boost further uptake of the EITI reporting guidelines for companies buying oil, gas and minerals from governments among supporting companies and the broader commodity trading sector.
The individual company results of the assessment will be published soon. Moving forward, the EITI International Secretariat will work with supporting companies and provide targeted recommendations on how to make further progress in achieving the expectations. It will also continue to conduct assessments of company progress in meeting the Expectations for EITI supporting companies every three years, as mandated by the EITI Board last year.