Blog / March 9, 2016

A new era for transparency – moving on from Lima

Standing amongst over a hundred passionate and angry civil society activists a few days ago, I was struck by how far the grassroots movement for greater transparency from oil, gas and mining companies and governments in resource rich countries had come. We were in the Peruvian capital, Lima, together with thousands of government, company and civil society representatives for the three yearly international conference of the Extractive Industries Transparency Initiative (EITI), a global transparency standard spanning over 50 countries.

This can appear at first glance to be a dry and lifeless subject.  Yet as I heard shouts of ‘we will not be silenced’ from the near on 100 civil society activists it was abundantly clear that it is anything but. The activists had taken the difficult but principled stance to boycott a key meeting of the EITI’s highest governing body following attempts to bypass them during key decisions over the scheme’s future governance structure. It was incredibly empowering to see how dedicated people were to the fight for transparency and accountability. After all, they have seen first-hand the damage that corruption does in their home countries.  

Activists at EITI conference in LimaSo what happened?  Well, since its conception, over 13 years ago, the EITI has operated on the basic idea that natural resources such as oil, gas and minerals belong to citizens. For them to have a say in how they are used, civil society, as the representative of citizens, has a right to know detailed information on revenues raised from those resources. It should also play a central part in the decision making processes which decide how the oil, gas and mining sectors in their countries should be run. That is how governments and the companies that are licenced to exploit get held to account for their decisions.

In Lima, tensions ran high as civil society from around the world protested against interference with their fundamental right to act with this kind of independence, but this time by the people running the EITI.  They were angry at attempts by the scheme’s Secretariat and previous Chair, Clare Short, to bypass the well-established and respected process for civil society nominations to the International Board by parachuting in an additional, illegitimate candidate.

Unfortunately, this kind of interference with basic rights is a common issue for civil society operating in the EITI’s 50 plus countries. That explains their anger at the same issues playing out on the international level, in a forum designed to protect their need to have a say. Conceding this ground would have set a terrible precedent; an EITI without independent civil society oversight lacks any way to hold governments and companies to account and reduces the scheme to an ineffectual audit process which perhaps, ultimately gives credibility to countries and companies who are ultimately looting their countries’ natural resources. Without civil society, the scheme is meaningless - and without activists from around the world working together with governments and companies for many years the EITI would never have been conceived nor achieved so much.

Yet out of the turmoil comes the opportunity for the dawn of a new era.  The boycott demonstrated why the new EITI International Board now needs to move forward with important governance reforms, including better management and oversight of the scheme’s Secretariat, and strengthened accountability over the new Board and EITI Chair.  But likewise it also shows how committed civil society is to the EITI and its potential to bring real change in resource rich countries at the national and local level.

And while Lima was all about protest and defence of civic space, we must not forget that we saw real progress in three key areas which has the potential for real impact:

1.  Cracking down on anonymous companies: by 2020 oil, gas and mining companies in all EITI countries will have to disclose their real owners. Citizens own a country’s natural resources and have a right to know who controls the companies that extract them and who benefits from the revenues raised.  Without this transparency there is a lack of trust between governments, citizens and companies. The deal reached in Lima will help to prevent conflicts of interest that enable corrupt officials to siphon off cash that could pay for schools, hospitals and skilling people up in countries that badly need it.  To meet the 2020 deadline, the EITI’s 51 countries will need to start working now and civil society should be active in these discussions by calling on their governments to implement this vital transparency measure as soon as possible, and taking an active part in drawing up the necessary roadmap by the agreed deadline of January 2017. Governments and citizens should not wait while billions are being looted via anonymous companies shielding corrupt officials.

2.  Real safeguards to protect civic space in EITI countries. In January 2015, the EITI introduced a Civil Society Protocol which details five areas of protection of civic space - expression, operation, association, engagement and access to public decision-making. It applies to all civil society actors working on natural resource governance. An agreement was reached in Lima that under the EITI’s renewed quality assurance mechanism (so-called ‘Validation’), which checks whether countries have met the Standard, countries will be automatically suspended from the initiative if they are not fully compliant with the provisions of the Civil Society Protocol

3.  Stronger requirements on company and government to properly engage and disclose under the EITI. Similarly to civil society engagement, if companies or governments are not fully engaged in the EITI process, for example by not participating or disclosing the necessary information, a country will, at a minimum, be suspended. This is an important tool for civil society to hold companies and their governments to account if either party is refusing to provide the necessary financial data or not fully participating in the national EITI process.

These are significant achievements, embedding principles which 10 years ago would have been laughed down. That is why the EITI is so important to those defending citizens’ right to know what is happening to their resources in countries all over the world. The EITI is a key building block to a better and more open world of business - but it must have teeth.

That’s why civil society represented on the International Board will need to continue to ensure that civil society is fully respected by EITI countries, the initiative’s Validation system holds all countries to the same global standard, and that measures to disclose the real owners of oil, gas and mining companies are properly implemented.

There is also renewed hope and opportunity with the election of new EITI Chair, former Swedish Prime Minister Frederik Reinfeldt. Mr Reinfeldt has already indicated his support for civil society’s central role in the EITI and stands ready to work with the recognised NGO coalition Publish What You Pay (PWYP), which represents more than 800 civil society organisations working on greater accountability in the oil, gas and mining sector spanning 60 countries.

The challenges ahead for the extractive sector are significant: low commodity prices, climate change and shrinking space for civil society across the globe make schemes like the EITI all the more critical in ensuring responsible decisions get made- central to this should be that citizens are empowered to have a say in the management of their resources.

We look forward to this new era and working with new Chair Reinfeldt and International Board to introduce important governance reforms.  These, together with proper implementation of the new stronger EITI Standard, will help to ensure that the EITI can continue to play a critical role in ensuring transparency and data lead to more accountability and better governed natural resource sectors.


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