Detailed Information :

Year of Establishment: 2002

Project Phase: Implementation Phase (Long-Term Initiative)

Participants:

• Governments (23 candidate countries)
• Companies (37 of the largest oil, gas and mining companies)
• Civil society (Transparency International, Revenue Watch Institute,etc)
• Investors (over 70 global investment institutions)
• International organizations (including the World Bank, International Monetary Fund, African Development Bank, Organization for Economic Cooperation and Development, and the European Bank for Reconstruction and Development)

Scope:

• Setting a global standard for companies to publish what they pay and for governments to disclose what they receive.

Key Facts:
Description

• The Extractive Industries can generate large revenues to foster growth and reduce poverty.
• The Extractive Industry Transparency Initiative (EITI) is a multi-stakeholder coalition which provides a robust yet flexible methodology for monitoring and reconciling company payments and government revenues from oil, gas and mining.
• It is a globally developed standard that promotes revenue transparency at the local level.

Objectives

• To strengthen governance in resource-rich countries by improving transparency and accountability in the extractives sector.

Mechanisms:

• Cost: the Multi Donor Trust Fund for the Extractive Industries Transparency Initiative (EITI) – an arrangement whereby the World Bank manages funds on behalf of the Governments of the United Kingdom, Germany, the Netherlands, Norway, Australia, Belgium, France, and Canada. The Multi Donor Trust Fund supports the establishment of extractive industries transparency initiatives in countries that have signed on to EITI through programs of cooperation among the government, the private sector, and civil society. The Fund also supports the work of the EITI International Secretariat.
• For a country to become an EITI candidate, an implementing country needs to endorse the four sign up indicators (i.e. government announcement, commitment to working with all stakeholders, designating an implementation leader, composing, agreeing and publishing a country work plan).

• After signing up, a wide range of activities needs to take place at the local level to strengthen resource revenue transparency.
• Role of Monitor: an external (independent) monitor designated by multi-stakeholder groups will check the claims made by countries and companies about their EITI implementation progress.
• EITI’s board and international secretariat guards the methodology. Yet, the local level implementation is the government’s responsibility.

Benefits

• Implementing Countries: an improved investment climate by providing a clear signal to investors and the international financial institutions that the government is committed to greater transparency.
• Companies and Investors: mitigating political and reputation risks; transparency of payments made to a government can also help to demonstrate the contribution that their investment makes to a country.
• Strengthening accountability and good governance, as well as promoting greater economic and political stability contribute to the prevention of conflict based around the oil, mining and gas sectors.

Source: EITI