The original version of this article, by Jill Shankleman, appeared on the United States Institute of Peace’s International Network for Economics and Conflict blog.
The Extractive Industries Transparency Initiative
(EITI), launched in 2002, now has 35 participating countries
that have committed to publish annual, independently verified reports on all mining, oil, and gas payments made by companies to governments and all revenues received by governments from these extractive industry companies. The EITI is based on the premise that making public reliable information about extractive industry payments will make corruption and theft of “resource rents” more difficult and will enable informed debate amongst citizens and politicians about how to use resource wealth
. While initially some governments could object to joining on the grounds that EITI was “a bad boys’ club,” Norway is now a fully engaged member; the United States has just announced that it will participate
; and Australia stated it will pilot-test the system
The participants in EITI also include Liberia, East Timor, Sierra Leone, and Côte d’Ivoire, which, as post-conflict states, depend more than most on effective management of their resource wealth to establish the foundations for sustained economic growth. Citizens, journalists, and government officials in all the EITI countries now have access to some information on what extractive industry companies are paying to the government and what the government is receiving.
However, examination of country EITI reports reveals several shortcomings in reporting. What do the reports tell us beyond the headline numbers (i.e., total revenues and the size of any discrepancy between what companies report paying and what governments report receiving)? What do they tell us about revenue trends or about the significance of these revenues in total government receipts? How many countries have a pattern similar to Tanzania whereby the largest contribution documented in their first report was through companies collecting payroll taxes on behalf of the government? What is the value of “social investments,” training levies, or research and development contributions made by extractive industry companies? Where, and to what extent, do oil, gas and mining companies make payments to local governments?
Continue reading on the International Network for Economics and Conflict blog.
Jill Shankleman is a senior scholar at the Woodrow Wilson Center and former senior social and environmental specialist at the World Bank.
Video Credit: “Transparency Counts,” courtesy of vimeo user EITI International.