* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.
When 'transparency' has become synonymous with 'good', loud proclamations on being supportive of transparency can ring hollow
Companies have brandished their ‘support’ of the Extractive Industries Transparency Initiative (EITI) as a badge proving their unquestionable commitment to transparency. For the most part their behaviour has failed to reflect their rhetoric. In fact, many companies hide behind EITI while waging an unsavoury battle against transparency legislation. Companies should not be allowed to have their cake and eat it. If they wish to derive the reputational benefits of participating in a transparency initiative they ought to act appropriately.
Threatening to sue the US Securities and Exchange Commission if it publishes effective transparency rules – for a law which has already been passed – is hardly appropriate behaviour.
Disappointingly, the process to become an EITI supporting company is neither rigorous nor – it would seem – strictly enforced.
How does a company go about obtaining this EITI transparency conferring status? It is a relatively simple process. The supporting company has to:
- Make a statement where it endorses the EITI principles and criteria, placing this statement somewhere on its website.
- Contribute to implementation in EITI implementing countries.
- Make an annual contribution (there are three categories of annual contribution, the highest is $50,000 per annum).
- Submit a one-page international level self-assessment form.
It is commendable that companies choose to adhere to these criteria, yet these criteria alone do not suddenly qualify a company as ‘transparent’. It is all very well to endorse EITI and transparency on your website, but action should match proclamation. After all, in an era where oil and mining companies dominate the league of the mistrusted, which extractive company would pass up the opportunity to publicly claim they are ‘for transparency’?
Once companies receive their ‘supporter’ status they have up to a year to hand in their self-assessment form – which seems somewhat illogical.
To date, fifteen out of the sixty companies on the EITI website have not submitted their self-assessment form. Surely a genuine attachment to transparency – and a genuine desire to be part of the EITI – would mean companies not waiting until the last minute to hand in a simple form?
Question two of the self-assessment form teases that there might yet be some substance to becoming an EITI supporting company. It asks whether a company’s website has linked to completed company forms (which illustrate the payments a company has made to a certain government). It qualifies that this question is only applicable if the form relates to a country that has “completed at least one validation” – as of February 2012 most countries have completed at least one validation. Yet a plethora of companies have answered ‘not applicable’ to this question, despite operating in countries which have indeed completed a validation. Surely companies would jump at the opportunity to link to a ‘real life’ example of their transparency in action?
Apparently not. Oil majors like Shell, Total, Chevron and ExxonMobil among others – companies who can certainly afford to employ someone to keep their EITI credentials up to date – have stayed silent on the one substantive opportunity to demonstrate transparency within their self-assessment forms.
The requirements for becoming an EITI supporting company are already low, yet even these are not being met. This careless attitude might reflect that certain companies are not taking their EITI membership seriously; a seriousness they are all too ready to ascribe to EITI membership when they are using it for their own image.
At a time when ‘transparency’ has become synonymous with ‘good’, loud proclamations on being supportive of transparency can ring hollow. Who would proclaim to be against transparency these days? It is crucial that rhetoric is matched with action if we do not want transparency to become just another meaningless adjective used for PR purposes.
Therefore it is disappointing that the EITI has become part of a situation which allows companies to engage in such hollow proclamations. The EITI aspires to become a rigorous global standard that has already led to 35 governments committing to a more transparent system of governance for natural resources. In their public posturing, companies will ascribe a high value to their EITI supporter status.
It is therefore only right that this status require a modicum of action. Instead, Glencore is a ‘supporting company’ solely due to the fact that it stated it was a supporting company in its annual sustainability report and paid an annual contribution. Surely it should be up to the EITI to decide who qualifies as a supporting company, rather than the company themselves? In August 2011 Glencore made a massive song and dance about its support for EITI. An authentic commitment to the principles of transparency might have been better served by Glencore publishing its payments in Zambia, where it has been accused of manipulating its accounts to avoid tax.
Countries wishing to become EITI candidates are rightly required to remove all obstacles to EITI implementation – this is why, for example, Ethiopia should not become a candidate country until it gets rid of its repressive NGO law. With companies it seems a different standard applies: companies can ‘support’ EITI while spending millions on lobbyists to water down transparency legislation.
The point is that the EITI is an initiative for better governance, not just a convenient utensil in a company’s PR toolbox. It should not be abused by companies interested only in improving their image. This also mars the hard and pioneering work done by companies who genuinely support transparency and good governance in the extractive sector.
The EITI should be far more discerning, for its own sake if nothing else, in whom it allows as a supporting company. The fact that Glencore can call itself a supporting company of the Extractive Industries Transparency Initiative is, brutally speaking, little more than a joke. Fifty grand and they can call themselves transparent? That’s not a commitment, that’s a bargain.
Alice Powell works on communications for Publish What You Pay (PWYP)
The next EITI Board meeting takes place at Wilton Park, Sussex, England on 14-15 February 2012
