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| Report on EITI Conference in Doha, Qatar, 16th - 18th February 2009 | ||
The fourth EITI Conference was held in Doha, Qatar from 16th-18th February, 2009. The Extractive Industries Transparency Initiative (EITI) is a ground breaking initiative that promotes public disclosure of revenue flows from the oil, gas and mining industries to governments in countries that depend on natural resources. Improved transparency in revenue flows will reduce the risk of corruption, improved accountability and inform public debate on the best use of public money. 2. The Conference marked the transformation of EITI from a start-up initiative to a global transparency standard. 3. The Conference was attended by over 500 participants from 80 countries and International Organisations. Amongst the International Organisations in attendance were the World Bank, African Development Bank, IMF and the United Nations Agencies. It was also attended by the representatives from the private sector, NGOs and Civil Society Groups. Ghana’s representation at the Conference was from Government, private sector and civil society. The composition of the delegation was as follows: 4. The delegation made a statement on behalf of Government emphasizing the new administration of H.E President Atta Mills’ commitment to the EITI principles of transparency and accountability. The statement also outlined Ghana’s achievements to date in EITI implementation. It also used the opportunity to inform the Conference of Ghana’s readiness for validation (full text of Ghana’s Conference statement is attached for your information). The delegation also made presentations at two separate side events on “Advancing EITI implementation at the Sub-regional level” and “Ghana and GTZ cooperation on EITI implementation”. 5. The delegation also took part in a Civil Society side event on the “Ghana’s big test : oil’s challenge to democratic development” the side event was organized by Oxfam America and Integrated Social Development Centre (ISODEC). 2.0 OBJECTIVES OF THE CONFERENCE 5. The Conference provided the opportunity to take stock of the benefits and progress of the EITI, find common solutions for challenges and chart next steps for advancing the growing global initiative. The specific objectives of the conference were to: OPENING STATEMENTS 6. During her opening statement the President of Liberia, H.E Ellen Johnson-Sirleaf, stated that, “without strong political will in implementing countries, no EITI programme can be expected to succeed”. She noted that the EITI has helped to move Liberia away from the corruption and misallocation of natural resources that helped to fuel decades of civil war in her country. 7. Qatar's Minister of State for Energy and Industry Affairs, H.E. Dr Mohammed Saleh Al-Sada, reiterated Qatar's strong support for the EITI and announced that Qatar Petroleum will become an EITI supporting company. 8. The EITI Chairman, Peter Eigen, emphasised the importance of protecting and respecting civil society in its efforts to combat corruption and hold governments and companies to account. 9. He underscored the importance of all EITI implementing countries to be validated. The validation process he noted is expected to help instill discipline in implementation and in upholding the EITI Criteria. He said the simplicity of the EITI’s objectives—publication of extractive industry payments and revenues—is the reason for its popular appeal. However, pursuing it properly requires great cooperation from the extractive companies. The initiative also places a greater responsibility on implementing countries, particularly on the capacity of their revenue administration. In the view of the Chairman, EITI reports can provide meaningful accountability only if all extractive companies participate and if all material revenue streams are reported. 10. George Soros the founder and Chairman of Revenue Watch International (RWI) stated that countries implementing the EITI have a competitive advantage over those outside the initiative in attracting greater investment in the current global climate. The high standards of accounting and reporting inherent in the EITI will help ensure greater openness and a more level playing field in the business environment. Royal Dutch Shell CEO, Jeroen van der Veer, also reminded the participants of why the EITI is in the interests of businesses who want to behave transparently and honestly. CONFERENCE HIGHLIGHTS 11. There was a general consensus at the Conference among stakeholders that the current global economic downturn makes the EITI more important than ever. The steep reduction in international prices for oil, gas, metals and minerals translates into a sharp decline in government revenues in commodity dependent economies. The fundamental changes taking place in the international investment climate reinforce the need for transparency, as companies and investors have become increasingly risk-averse. 12. There were several statements and presentations by political leaders and civil society groups. The statements reaffirmed political and civil society commitment to the EITI Principles. Most of the Statements agreed that transparency in the publication of revenues received by governments and of payments by companies to governments, alongside other efforts to improve public financial management, continues to be an important step in increasing accountability and encouraging the effective use of these revenues and should be pursued vigorously. 13. Participants warmly welcomed the encouraging progress that had been made by several countries since the last Conference in Oslo, Norway in October 2006 to improve transparency in the management of oil, gas and mining revenues – noting in particular the validation of Azerbaijan and production of EITI reports in Liberia, Guinea, Kyrgyz Republic, Ghana, Cameroon, and Nigeria. They commended the support given to EITI by companies, investors, civil society organizations, international organizations and by other governments. 14. Ministers from the governments of Mozambique, Ethiopia and Mauritania all officially declared their commitment to become EITI implementing countries and outlined the steps they are undertaking to achieve EITI Candidate Country status. Tanzania became the 26th EITI Candidate country (with Norway, as the first OECD country to implement the EITI, having gained Candidate status just before the Conference). 15. Japan announced that it will become an EITI Supporting Country. The Japanese Ambassador to Qatar stated that Japan will seek to assist in expanding the initiative's presence in the Asia-Pacific region. With Japan now coming on-board as supporting country all members of the G7 group of industrialized countries now support the EITI. 16. The statements urged the international community to support the efforts of implementing country governments either through the EITI Trust Fund or by directly assisting the governments and civil society organizations of implementing countries with technical and financial assistance. They called on governments (including those of major emerging economies) to lend political support and leadership to EITI. It also called on all companies, investors, civil society organizations, regional associations and international institutions that were not already supporting EITI to do so. 17. It was noted that adequate funding was important to the future of EITI and called on stakeholders to ensure that this was provided. 18. The EITI Progress Report 2007-2009 was launched by the Head of the EITI International Secretariat, Jonas Moberg. Many EITI stakeholders and implementing countries i.e Ghana EITI Secretariat contributed to the writing of the report which outlines the key developments of the EITI since the last EITI Global Conference in Oslo, Norway .Three other EITI publications on how to advance EITI implementation and support were also launched, they are: an EITI Guide for Legislators and an EITI Communications Guide on how implementers can effectively communicate the EITI, and a publication on Advancing EITI in the Mining Sector. 4.1 The New EITI Board 19. The EITI Members’ Association was established under Norwegian law, thereby incorporating the whole EITI global structure, including the Board and International Secretariat. Under the new Articles of Association, a new Board was elected. 20 The EITI implementing countries represented on the new board are, Azerbaijan, Niger, Cameroon, Kyrgyzstan and Nigeria, while Ghana and Liberia were selected to serve in an alternative capacity (attached is the list of the new Board Members). 21 Also represented on the Board are extractive companies of British Petroleum (BP), Chevron, International Council on Mining and Metals and Pemex with Exxon Mobil, Royal Dutch Shell and Petrobras as alternates. 22 The next Board meeting is scheduled for 14-15 May in Washington D.C. All Board members and alternates are expected to attend. 4.2 Azerbaijan Validated 23 Azerbaijan became the first country to have passed an EITI Validation, the EITI quality assurance mechanism to assess whether the country has met the requirements of the EITI standard. The EITI Board declared Azerbaijan EITI Compliant at the EITI Conference in Qatar after passing the Validation. As a result of the recommendation of Validators the Government of Azerbajain has agreed to make some changes to the form and substance of its EITI process within six months. 24. It would be recalled that the International EITI Secretariat/Board since 2007 directed that implementing countries and the companies operating in them should be required to have their progress validated on a regular basis; and companies that commit at the international level should complete an additional self-assessment. For that purpose an EITI Validation Guide was developed and a list of independent and credible validators established. EITI implementing countries are therefore to make the necessary arrangements to have their implementation validated. 25. Independent validation would ensure that EITI criteria are being met. The validation process is however based on in-depth consultation with all stakeholders in a country, especially civil society. 26. EITI Compliance means that a country’s government has worked with the private sector and civil society groups to produce regular, audited reports of payments to the government by oil, gas and mining companies. This data enables citizens to monitor such payments, which have been corrupted or wasted in many countries in the past. 27. EITI Compliance is a powerful signal to the world that the country is committed to openness. 28. The next year will be crucial for the success of the EITI because most of the other 24 EITI Candidate countries must also undergo Validation. Ghana has officially, written to the International EITI Secretariat indicating its readiness for validation. AWARDS 29. Liberia was presented with an award for the rapid progress the country has made towards implementation of the EITI. Azerbaijan received an award for having come further than any other country and becoming the first EITI Compliant country. Kazakhstan received a special prize for its efforts to raise awareness of the EITI across their huge country. CHALLENGES FOR EITI The scope of revenue transparency needs to be extended 30. The EITI, for all its strengths, does not cover all the aspects of the extractive industries where transparency is needed. It was recommended by delegates that the collaboration of EITI stakeholders in governments, industry and civil society, which has been very productive to date, should now be expanded to take in the transparency of contracts between companies and governments and transparency of access to oil and mineral concessions. Transparency of government spending is also vital. Broadening and Deepening the EITI 31. The global financial crisis is creating a backlash against anything that looks like an attempt by rich countries to preach standards of governance to others which they do not apply themselves. The EITI has already been seen in this light in some quarters, with some justice, because almost all of the countries that implement it are in the developing world, while wealthy consumer countries can claim credit for supporting the EITI in various ways but do not have to implement it themselves. 32. It was noted that in today’s globalized world, no international initiative can succeed without the active participation of the large emerging market economies. There is therefore, the need to convince emerging market economies like China, India, Brasil etc. that joining the EITI is in their interest. Some of the emerging market economies are themselves large producers of oil, gas and minerals, and as such stand to benefit from the accountability framework offered by the EITI. Others are home to the extractive companies operating abroad, and they therefore have responsibility to make sure those companies behave in the best interest of the countries in which they operate. 33. Out of 48 countries the IMF considers rich in natural resources, only 24 are currently EITI candidates. It is therefore not only emerging markets that are missing. Of the 24 candidate countries, only 10 have produced any sort of EITI report. The Conference urged more countries to become candidates and more candidate countries should produce reports, and those reports should be timely. 34. The Conference admits that one of the critical challenges the EITI faces is its inability to convince many of the emerging economies especially China of the benefits of EITI. Perhaps they could be given a greater sense of ownership with certain changes to the EITI governance structure, such as modifying the distinction between supporting and participating countries the Conference noted. In this connection, the Conference welcome Norway’s decision to both implement and support EITI. Other supporting countries were challenged to explain publicly how their accountability and transparency arrangements substantially achieve the EITI’s objectives, short of implementing EITI. Thus, EITI could become a useful tool not only for developing but also for all countries, including emerging market countries. 35. It was the concern of the Conference that the apparent disparity between developed and developing countries is damaging to the EITI and gives some countries a reason not to join the initiative. So countries like the United States, Britain, Canada, Australia and other EITI Supporting countries with significant oil, gas or mining industries should follow Norway’s example and implement the EITI themselves. Future EITI Supporters should pledge to do the same. These countries need to implement EITI to prove that it is not a global double standard. Implementation would cost little for such countries and the reward for the global cause of transparency would be great. 6.0 CONCLUSION 36 In the six years since its launch, the Extractive Industries Transparency Initiative (EITI) has made significant progress towards setting a global standard for revenue transparency in the oil, gas and mining sectors. Many of the countries in the world in which the extractives sector plays a significant economic role have signaled their intention to increasing transparency over payments and revenues in line with the EITI Principles and Criteria and the Initiative is encouraging them to take meaningful steps to meet their commitments. EITI has succeeded so far through the efforts of resource rich country governments themselves, working with extractive industry companies, national and international civil society, investors, other supporting governments and international organizations. 37. The level of interest and participation in the EITI continues to expand with pledges from new companies and countries to support the initiative, testifying to the growing consensus that the EITI yields genuine benefits in terms of improved financial management, accountability and business climate. 38 Delegates agreed to meet again in two years time. |
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