Transparency is on the move – the revised EITI standard – Tearfund's Policy Blog

May 23, 2013 by Melissa Lawson

This week the EITI biennial conference is being held in Sydney – an opportunity for extractives companies, governments and civil society to strengthen their efforts to enhance transparency and tackle the ‘resource curse’.

Currently it feels like each day we are taking steps towards transparency –  on Tuesday the French and British development Ministers called for transparency to become the norm rather than the exception, and only yesterday Prime Minister David Cameron and President Hollande announced that the UK and France will be joining the EITI.

For those involved in the EITI, this week is momentous.  The revised EITI standard, as being agreed in Sydney, will be implemented in the 39 member countries.  ‘The revised standard encourages more relevant, reliable and usable information, as well as better linkages to wider reforms’.

Tearfund has been calling for these changes, drawing upon the findings from our research in Peru.  The Peru case (see previous blog) shows that these revisions are essential in order to make EITI information useful to communities.  In particular:

  • Project-by-project reporting:  The research found that this is critical in order that communities have information that is relevant for their lives – this revision is therefore supported.
  • Contract transparency:  The research in Peru highlighted that the main other demand from communities is to know the terms and conditions of contracts – with concerns that many of the contracts have not been negotiated in the interests of the country but the result of underhand political deals.  Therefore the ‘encouragement’ on contract transparency is welcome, but doesn’t go far enough.
  • Presenting the context In Peru, the lack of contextual analysis and lack of links with other initiatives severely undermines the potential impact of the EITI reports.  The revision is therefore crucial, but in time must go further so that EITI reports also link to other kinds of information in order for the full picture to be seen (e.g. on local government budgets and environmental laws).

Women in vinchos community. Credit Graham Gordon

But the EITI itself isn’t enough – voluntary initiatives can only go so far.  The UK has been actively involved in working through the European legislation which complements the US Dodd-Frank law, meaning these laws cover about two-thirds of the world’s oil, gas and mining companies.  But we need a global mandatory reporting standard for extractive industries.

The movement in the direction of transparency can’t be allowed to stall.   The G8 this year provides a perfect opportunity to continue to build on the progress made.  G8 countries need to commit to a global mandatory reporting standard for extractive firms – and to implement the necessary domestic legislation.

The Prime Minister has outlined that this will be on the agenda of the G8.  But the question remains to be seen whether the G8 outcomes are ambitious and whether other G8 countries agree to a global reporting standard.

Our work is far from done.  We need to keep moving forward in order to make a difference to the millions of people living in resource-rich countries, but who live in abject poverty.