Extractive Industries Transparency Initiative

The Extractive Industries Transparency Initiative (EITI) was developed as a voluntary global standard for improved transparency in the distribution of profits from oil, gas, and minerals industries. Revenues from the extractive industries provide a significant proportion of government income in more than 50 developing countries that are home to some 3.5 billion people. Effective and accountable governance of such revenues ought to lead to economic growth, development, and poverty reduction. However, all too often, poor governance has led to an increase in poverty, corruption, and conflict. To help tackle this problem, the EITI was created. A unique feature of EITI is that it is a multi-stakeholder partnership between governments, nongovernmental organizations (NGOs), and extractive sector companies.

At the heart of EITI is a straightforward idea, which is that payments made by extractive industry companies to a host government should be published. Similarly, the revenues received by that government should also be made transparent and any discrepancies with company payments investigated and, if they cannot be reconciled, made public. Such transparency is a necessary condition for good governance and helps empower NGOs and other civil society organizations to hold governments accountable for the use to which such revenues are put.

The idea of companies publicly declaring their payments to governments was first proposed in 1999 by a British NGO, Global Witness, in the context of their work on Angola. Peter Hain, then UK Minister for Africa, took up this suggestion and convened a number of meetings between NGOs and oil companies operating in Angola. However, no consensus emerged because the companies argued that their contracts with the Angolan government prohibited the disclosure of information without the consent of their partners, one of whom was the Angolan State Oil Company. Nevertheless, two of the oil companies present (Shell and BP) recognized the contribution that good governance of oil revenues could make to the sustainability of their operations, and subsequent meetings took place with Global Witness and other NGOs. The UK government joined these discussions, as did two mining companies (Anglo American and Rio Tinto), leading to agreement on the core elements of EITI. The initiative was subsequently launched by then UK prime minister Tony Blair at the 2002 World Summit on Sustainable Development in Johannesburg, South Africa.

Following the launch, it was crucial to broaden the base of support for the initiative and to define the details of its scope and operation. Accordingly, the UK Department for International Development (to whom the UK government had entrusted EITI) convened a series of multi-stakeholder meetings to develop a set of agreed principles and criteria for EITI and, subsequently, detailed reporting requirements. This then led to the first 2003 EITI Plenary Conference at Lancaster House in London, hosted by Tony Blair and attended by 140 delegates representing 31 governments, 12 NGOs, 18 companies, and 4 intergovernmental organizations (including the World Bank and the International Monetary Fund). The conference expressed support for the EITI principles and agreed to an action plan that included pilot projects in Azerbaijan and Nigeria. Subsequent plenary conferences were held in 2005 (London), 2006 (Oslo), and 2009 (Doha) attracting, each time, an increased number of delegates.

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