Government representatives, the heads of international oil, gas and mining companies, and NGOs attended the EITI Board meeting in Oslo on Thursday 27 September 2007.
04/10/2007 :: Among the issues the Board considered was whether 13 of the 20 EITI member countries will be permitted to retain their member status. Withdrawal of membership can have serious consequences for a country’s reputation and, not least, for the companies that operate in it.
EITI stands for Extractive Industries Transparency Initiative. The EITI’s founding principle is that companies that operate in the extractive industries should publish what they pay to the authorities in host countries, and that the authorities should publish what they receive. This transparency in relation to revenue streams is intended to limit the opportunities for corruption, and help to ensure that a larger proportion of the revenues benefits the population at large.
Many developing countries that are rich in oil, gas and other natural resources have much lower economic growth than countries without such resources. This paradox is often called the “resource curse”. Regimes have less need of a democratic base when they have access to resource revenues, which are often also used to support instability and conflict. The fact that resource-rich countries remain poor is due less to a curse than to institutionalised corruption.
The Extractive Industries Transparency Initiative was launched by former British Prime Minister Tony Blair in 2002. Since then, 20 countries have joined the initiative, and large companies like ExxonMobile, ChevronTexaco, ENI, Shell, Total, BP, Statoil and Hydro are among the many private sector participants. Various NGOs, such as Transparency International and the Publish What You Pay coalition, are also involved.
The governance mechanism that is now taking shape, under which the EITI Board includes participants from all three sectors (government, private and NGO), is ground-breaking. Norway is hosting the EITI Secretariat in Oslo, and is providing political and financial support for the initiative. It participates in the Board as an observer.
More information on the EITI can be found on www.eitransparency.org/.