LONDON (Thomson Reuters Foundation) - The United Kingdom has begun the process of becoming a member of a global initiative which aims to bring greater transparency and accountability to the oil, gas and mining sector.
While the UK is generally considered neither resource-rich nor especially corrupt, the British government has taken the lead in pushing for more transparency in the extractive sector, particularly in its role as chair of the Group of Eight industrialised countries.
“I think it is very much the case that we are not being driven into the EITI process by some massive concern that there is loads of corruption going on in the UK,” Jo Swinson, business minister and UK EITI champion, told the launch conference in London on Tuesday.
“But what we have recognised is that in order to give international leadership to this issue... then being able to have our own house in order is really important,” she added.
“We are not just saying that you should do this, we are saying that we are really going to support this ourselves,” she said.
The Extractive Industry Transparency Initiative (EITI), first announced in 2002 by former British prime minister Tony Blair, requires member countries to compel any extractive company operating within their borders to publish the payments it has made to the government, and the government to publish the revenue it has received from the company. The two sets of accounts are independently verified and published as a publicly available EITI report.
In addition to its revenue transparency requirements, the EITI announced in May a new, revised standard that will require that EITI-implementing countries publish far more contextual data about their extractive industry including production figures, the registration of licences and permits and the transfer of extractive revenue from federal to local government.
PRACTISE WHAT YOU PREACH
Of the EITI’s 39 implementing countries, only Norway, the home of the EITI secretariat, could be described as a rich Western country. However, stung by complaints that the West does not always practise what it preaches with regards to good governance initiatives, rich Western countries have begun to show an interest in joining the EITI too.
The UK, the United States, France and Italy have all committed themselves to joining the EITI while Australia is about to finish an EITI pilot programme and Germany recently announced that it would soon start one.
“Even in countries with good governance systems, these resources are difficult to manage,” said Clare Short, chair of the EITI and former British development minister.
Short cited Australia as an example of a Western country that had faced problems at the peak of the last commodities boom because of the negative effects of soaring commodity prices vis-a-vis the rest of the economy.
“Tourism and agriculture got squeezed a bit by the high currency because they have got so much mining...,” Short said.
Short urged the UK’s EITI multi-stakeholder group (MSG) of industry, civil society and government representatives to break new ground when implementing the initiative so that it could be an example to others.
“Make it work for the UK, make it useful and think of doing it in a way which will be useful to other countries to use the EITI more creatively and more meaningfully,” Short said.
“And get onto the meat, don’t fiddle around forever consulting over who is going to be on the multi-stakeholder groups,” she added.