EITI at crossroads

Jonas MobergGeorge Washington University

May 2010

www.eiti.org

I. the resource curse

1997

December 1999

Petrol is the best vector of corruption

Petrol is the best vector of corruption

 “

2010examines how the world's poorest societies make the least of their natural resources

- Corruption- Link between resources and

conflicts- Link between resources and

human rights abuses- Dutch diesease

www.eiti.org

Governance failure Pressure/attention

Investigative reporting

Facilitation

Business case for action Negotiation

Implementation

Quality Assurance

Code/standard

II. Part of the remedy and a place to start

Award of licenses

&contracts

Regulation&

monitoring of operations

The EITI provides a forum for dialogue and a platform for broader reforms

Revenuedistribution

& management

Implementation of sustainable development policies

Government Spending

Companies disclose

payments

Government discloses receipt

of payments

Independent verification of tax & royalty

payments”EITI report”

Oversight by aMulti-Stakeholder

Group

How the EITI works

Implementing Countries

o 31 Implementing Countries across Africa, Asia, Latin America, Middle East and Central Asia

o 48 major international oil, gas, and mining companies

o 80 institutional investors with collective assets of over $16 trillion

o 100s of civil society groups and networks – e.g. Publish What You Pay, Open Society/Revenue Watch Institute, Transparency International

o Supporting Countries, including Japan, Australia, Canada, France, Germany, the Netherlands, Norway, the UK and the US

EITI in 2010

46 of the world’sleading oil, gas andmining companiesSupport the EITI

EITI Implementing countries31 countries

Supporting countries and organisationsincluding the World Bank, AfDB and ADB

Civil society organisationshundreds, often through Publish What You Pay

Supporting institutional investors

16trillion US in Management

Supporting companies45, including most of the world’s largest

EITI International Secretariat

Oslo

The EITI Board

EITI

Chart of original media articles mentioning “Extractive Industries Transparency Initiative” from 1 Jan 2008 – 31 Dec 2009:

Dr Peter Eigen, Chairman of the EITI, interviewed by Jonathan Charles on the BBC news programme HARDtalk, November 6, 2009.

Norway, first OECD reporting country

Liberia 2nd report: 4 sectors

Ellen Johnson SirleafPresident of Liberia

“The Liberia EITI is one of the institutional pillars of integrity anchoring and sustaining the reform agenda of Liberia.”“By promoting better management and use of public resources and discouraging corruption, LEITI … is critical to poverty reduction and social development in Liberia.”

July 2009, when signing the new LEITI law

Peru 1st Report

- Covers 4 years, 2004-2007

-Reporting model that differs from other EITI reports: Companies decide disclose data in an aggregated or disaggregated manner

EITI reporting

• 16 reports published (28 in Jul 09, 44 in Mar 10, Madagascar has produced a pilot report).

• 11 countries have reported for the first time.• The number of both reports* and reporting

countries *(excluding Azerbaijan) has almost doubled.

• The proportion of reports with disaggregated figures have increased, from 20% (5 out of the first 28) to 50% (8 out of the last 16).

 -

Why governments implement the EITI

-Enlightened self-interestTo prevent corruptionTo build trust amongst communitiesTo attract foreign direct investmentTo attract leading companies To gain international recognitionTo improve credit rating

- Encouragement from the international community Development community promoting good governanceIMF and others wishing to see improved fiscal managementEnergy security through transparency

- Encouragement from industryLicense to operateLong-term investment depends on a sound business

climate

EITI

The EITI has been politically endorsed by many Governments and in many forums

The AU, EU, UN, G8, G20,..

III. Does we know if it works?

Challenges: - Causality- Alternatives - Output/impact- Time

”Emerging anecdotal evidence”

• It can be a platform for long-term reform• From transparency to accountability • To fight corruption – maybe• To build trust and confidence

- definetely

Lessons

• Depth – implementation quality• Width – continued progress with large

emerging economies

Looking ahead

IV. Challenges

Companies disclose

payments

Government discloses receipt

of payments

Independent verification of tax & royalty

payments”EITI report”

Oversight by aMulti-Stakeholder

Group

1.Rules and Validation

2.Improvedreporting

4. Civil societyparticipation

6.Impact

5. Outreach/expansion

3. Incentivising

V. Multi-stakeholder governance

www.eiti.org

Governance failure Pressure/attention

Investigative reporting

Facilitation

Business case for action Negotiation

Implementation

Quality Assurance

Code/standard

Multi-stakeholder governance

• ”voluntary” and mandatory- evolution

• Focus• Something for everyone• High transaction costs – must learn

more • Not a panacea• Requires leadership

EITI Other Publications

...and video.

Jmoberg@eiti.org