The Extractive Industry Transparency Initiative (EITI) is a coalition of governments, companies, civil society groups, investors and international organisations which supports improved governance in resource-rich countries through the verification and full publication of company payments and government revenues from oil, gas and mining. The initiative was launched by the UK in 2002. Although not a complaint mechanism as such, it is an interesting initiative that can be used by NGOs to call on States and companies for accountability.
Over 68 of the world’s largest oil, gas and mining companies support the EITI. 1 In almost all implementing countries, the commitment to implement the EITI has been decreed in some way. The initiative also contributed to the development, such as in the US and the EU, of mandatory disclosure requirements for listed companies to disclose detailed data on major payments to the governments where they operate.
The EITI Standard, 2 which is the authoritative source on how countries can implement the EITI, was formally launched at the EITI Global Conference in Sydney 23-24 May 2013. These standards replace the 2011 EITI Rules. 3 The Standard is the “global transparency standard for improving governance of natural resources”, that participating countries are required to comply with. The last version of the standard, the 2019 EITI Standard, was launched on 18 June at the Paris Global Conference. 4
The 12 EITI Principles outlined in the EITI Standard aim to increase transparency of payments and revenues in the extractives sector. 5 The Standard highlights seven minimum requirements that must be implemented by countries that are EITI members (also called EITI Compliant countries).
All companies (regardless of whether they are EITI Supporting Companies) operating in a country implementing the EITI are required to disclose how much they pay to the government. To become an EITI Supporting Company, companies are not required to provide additional reporting or disclosure of payments. Non-extractive companies and institutional investors have expressed growing support to the EITI.
Process and Outcome
Countries implementing the EITI Standard publish annual EITI Reports, in which they disclose information on tax payments, licences, contracts, production and other key elements around resource extraction. The reports are compiled by Independent Auditors, who are appointed by the multi-stakeholder groups in each EITI country, and who compare and compile the data from company and government reports.
Implementing countries are required to “publish the requested information (typically through an EITI Report) within 18 months of being admitted as an EITI country. Thereafter, the published data must be no older than the second to last complete accounting period, e.g. information pertaining to the financial year ending 31 December 2018 must be published at the latest by 31 December 2020” 6 . If the country does not comply with the required deadline, it will be suspended. The suspension “will be lifted if the EITI Board is satisfied that the outstanding data is published within six months of the deadline. If the outstanding data is not published within six months of the deadline, the suspension will remain in force until the EITI Board is satisfied that the country has published EITI data in accordance with Requirement 4.8. If the suspension is in effect for more than one year, the EITI Board will delist the country.” 7
Countries can be also suspended of de-listed if: “it is manifestly clear that a significant aspect of the EITI Principles and Requirements are not adhered to by an implementing country” Moreover, The EITI Board may decide to “suspend countries in cases where political instability or conflict manifestly prevents the country from adhering to a significant aspect of the EITI Principles and Requirements.” 8