Transparency at the Crossroads for Extractive Industries

Transparency at the Crossroads for Extractive Industries

When it comes to good governance in the information age, transparency has few competitors as the fix du jour. This is especially true when it comes to oil, gas and mining revenue in developing countries, where many people rightly consider transparency an essential first step in curbing government corruption. But the discussions at the "Transparency Counts" conference, held by the Extractive Industries Transparency Initiative (EITI) in Paris earlier this month, strongly suggest that knowing how much money is coming in to government coffers is not enough if that money does not improve people's lives.

Natural resources are hot right now, as the turnout at the conference highlighted. More than 900 participants from more than 70 countries attended, including dozens of ministers hawking their various countries to the extractive companies as well as heads of state congratulating themselves on achieving compliance despite their sometimes-dubious international reputations. They were joined by billionaire philanthropists with advice to share; leaders of Western nonprofits; members of African civil society, often screaming in frustration at the shortcomings of the current process; and the quietly nervous, sometimes-exasperated executives from multinational companies, there to lobby against the recent U.S. Dodd-Frank financial reform bill and to keep an eye on happenings at the other end of the extractive spectrum.

EITI was launched in 2003 as a voluntary initiative by then-British Prime Minister Tony Blair. It was designed as a way for companies and countries to show good faith by publicly reporting their oil, gas and mining income. A candidate country must develop a process in collaboration with domestic civil society to regularly publish independently audited payments to its government from extractive companies working in the country. To date, 35 countries, including Afghanistan and the Democratic Republic of the Congo, are candidates. Eleven are considered fully compliant, including Liberia and Azerbaijan, although six of these were conveniently added to the compliant list the day before the conference started. After early trial and error, EITI has come to be considered a success as an international norm, setting itself up as a win-win-win initiative for civil society, governments and business.

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