As the 5th Extractive Industries Transparency Initiative Conference closes in Paris, it’s been a fascinating few days. Drive for change by reformers throughout the Middle East meant that discussions about how to ensure revenues from oil and mining companies are spent on development which benefits the people rather than going to a tiny elite were far from purely technical or theoretical.
The President of the Kyrgyz Republic, one of the few women speakers, questioned from the podium why it was that Libyan assets had successfully been frozen by the West but nothing had happened with regard to assets from her country siphoned abroad by previous regimes.
In fact the most valuable feature of this conference was that the 1000+ speakers and delegates were looking wider and thinking bigger than just EITI.
EITI’s development over the last eight years has increased recognition that more transparency and accountability in the oil, gas and mining industries is essential to avoid corruption and mismanagement of natural resources. There has been real progress by some of the 35 countries in the initiative.
Some countries have published their first ever data about payments and civil society groups have a place at the table with the extractive companies and government officials. This week six more countries joined Liberia, Azerbaijan, Timor-Leste, Mongolia and Ghana in being recognised as EITI compliant states.
At the same time, the limitations of relying on a voluntary multi-stakeholder approach to disclose data about payments from oil, gas and mining companies have become clear.
There are huge variations in the quality of the reports produced by participating countries. In a few cases companies have simply not provided data. Other countries seem to have got stuck at candidate status. And the reach of EITI is limited — resource-rich countries such Cambodia and Angola have simply chosen not to join up. The last years have shown that EITI alone is too slow and too patchy to deliver the transparency and accountability that poor people in resource-rich countries need now.
The US government recognised the need for a more systematic approach last year, passing the Dodd-Frank Act in July 2010. Section 1504 requires that energy and mining companies registered with the SEC must disclose how much they pay to governments for each country where they operate.
Momentum for further laws to complement EITI’s approach is clearly growing – this week ministers from the US, German, UK and French Governments all stressed support for new disclosure requirements for extractive companies at EU level, building on the Dodd-Frank Act in the US. The European Commission confirmed it is also considering going further.
In this context, critical comments made by Shell’s Chief Executive about Dodd-Frank seemed particularly out of place. Arguing that all that’s needed is EITI or that legislation could in some way be counter-productive was seriously out of step with growing recognition that more action is needed to deliver transparency.
Country-by-country reporting is firmly on the agenda for the member states of the EU. The question is no longer if but when and how. In his concluding remarks, the French Minister promised that swift adoption of such regulation was a key priority. For millions of people around the world, reliable information about who is profiting from their natural resources can’t come soon enough.