sharing in governance of extractive industries
Written by Marianne Stigset
The good governance of natural resources has undergone an openness revolution since the EITI was established over a decade ago. The information being disclosed along the extractive industry value chain is becoming increasingly timely, accurate and granular, yet challenges remain in the form of shrinking civic space, corruption and under-used data. This was the conclusion of the roundtable discussion on Emerging Trends and Strategic Priorities in Extractive Industries Governance hosted by the EITI in Oslo this week, which gathered 60 representatives from the extractives industry, civil society, the investor community, government agencies and the diplomatic corps.
"In spite of significant achievements on transparency, not least the momentum towards increasing beneficial ownership transparency and open data, corruption is continuing on a large scale,” said Heidi Hegertun, director for the Oil for Development programme at the Norwegian Agency for Development Cooperation (NORAD). “Many of our partner countries rank low on Transparency International’s Corruption Perceptions Index. We also see limited interest or resistance from some of these countries in joining the EITI. The enabling environment for transparency and accountability in such countries is limited, and the working conditions are difficult, putting limits on our ability to provide broad capacity building and achieving results.”
Transparency - the talk of the town
Her views were echoed by Bjørn Otto Sverdrup, senior vice president for corporate sustainability at Equinor, who pointed to “a lot of lack of compliance in many countries and a lot of corruption with a new level of sophistication.” He added that this was why the EITI’s work on beneficial ownership was of great importance. However, Sverdrup also emphasised that “more companies are talking about transparency than ever before.”
This is a trend the EITI too has observed. Notably, the EITI’s supporting companiesvoluntarily drafted and signed up to a set of expectations in 2018 to enhance their commitment to greater transparency. These commitments included full tax transparency, promotion of contract transparency in countries of operation, beneficial ownership disclosure and due diligence down the procurement chain. The EITI plans to take this work further in 2019.
“We will work with partners on deepening transparency in the role and operations of state-owned companies, not least in how they buy and sell oil and other commodities to private traders,” said EITI Executive Director Mark Robinson. “Equinor is helping us with this work. We are also increasingly looking at deepening contract transparency, in which EITI implementing countries are encouraged to publicly disclose contracts and licenses that provide the terms for exploitation of a country’s oil, gas and minerals resources.”
Smart, relevant and timely data
The EITI seeks to disclose information across the extractives value chain from the issuance of the license to how much revenue gets generated and where this money goes. Many EITI implementing countries have made strides in making the data more accessible and relevant, which in turn is informing debate and reforms. Sierra Leone has developed an online repository to provide the public with payment information on the extractives sector, while EITI reporting is streamlined in Kazakhstan for extractive companies through an online EITI data portal. However, the information generated can be difficult for people to assess and utilise to its full potential.
“We have an opportunity to build on this extensive body of information and reduce the huge amount of work this entails for everyone involved, to focus increasingly on more accessible, relevant and timely data,” said Robinson. “We can do this by generating and using real time data that can be made accessible in a comprehensive form, both online and in summary form.”
Active civil society is key
A key enabler in ensuring that the data generated by the EITI is used to hold governments and companies accountable, is an active civil society and a free media.
“A strong civil society, active and competent media and effective control institutions are key elements in the efforts to tackle corruption,” Hegertun noted.
Yet confronting corruption is becoming increasingly dangerous for media and civil society alike around the world, said Guro Slettemark, Transparency International Norway’s General Secretary.
The EITI is premised on the collaboration between governments, companies and civil society, making the organisation a unique multi-stakeholder platform. “We want to ensure that the space for civil society to thrive and operate as an equal partner is protected,” said Robinson.
Venturing into newer territory
Going forward, the EITI will also be venturing into newer territory, by exploring how its work relates to gender, and to social and environmental impact, said Robinson. The organisation is developing more guidance on how to report on the environmental aspects of the extractives sector. There are currently 28 countries that include environmental reporting as part of their EITI implementation. For example, Trinidad and Tobago’s recent EITI report includes a section on onshore oil spills and its impact on human health and fishing.
“Our challenge is to manage the extractive sectors in ways that help transform the economies of producers for the better and help them end poverty – while doing so in ways that contribute to climate adaption and mitigation, preserve the environment, and respect the rights of local communities,” said Hegertun.
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