All Govts. must now show EITI steps taken to curb corruption in oil and mining sectors

Jun 17, 2023 ExxonMobil, News, Oil & Gas

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Kaieteur News – The Extractive Industries Transparency Initiative (EITI) has launched a revised set of standards which will require member countries to do deeper reporting on a range of issues.

The new EITI requirements now explicitly state the need for nations to address corruption risks in the oil, gas and mining sector, including outlining requirements on licensing and beneficial ownership in these multi-billion dollar industries.

The responsibilities have also increased for Multi-Stakeholder Groups, which is a collection of representatives from the respective industries, civil society and government. That group is responsible for crafting the country’s performance report, in line with the EITI Standards.

In the preparation of those reports, those new EITI Standards now require the MSG to consider issues related to extractive sector governance – including issues related to corruption. This is intended to place more focus on ensuring that EITI implementation strengthens anti-corruption efforts and addresses other nationally relevant governance issues.

The 2023 EITI Standard also introduces new requirements that shed light on companies’ safeguards against corruption. Kaieteur News understands that all reporting companies, including state-owned enterprises, are now expected to publish an anti-corruption policy that sets out how they manage corruption risks. Additionally, companies that participate in multi-stakeholder groups are expected to engage in rigorous due diligence processes to strengthen the integrity of the EITI process.

State-owned enterprises are also encouraged, under the new standards, to disclose the identity of the beneficial owners of their agents or intermediaries, suppliers or contractors, where feasible. EITI believes these disclosures will help to uncover connections to politically exposed persons (PEPs) and other conflicts of interest.

The 2023 EITI Standard notably places greater emphasis on the role that national multi-stakeholder groups play in addressing and supporting public debate on key governance issues that are aligned with national priorities. It also addresses artisanal and small-scale mining more comprehensively.

The process of refining the EITI Standard is the result of extensive consultation across the EITI’s constituencies and deliberation by the multi-stakeholder EITI Board. This process sought to ensure that the EITI Standard remains relevant and responsive by reflecting the EITI’s strategic priorities while remaining true to the organization’s mission. The consultations also aimed to capture stakeholder views on improving the coherence, cost-effectiveness and ownership of EITI implementation among the EITI’s nearly 60 implementing countries.

EITI implementing countries will be assessed against the 2023 EITI Standard from 1 January 2025. To facilitate the transition, EITI said countries are encouraged to integrate the changes in their next EITI work.

Guyana was this year temporarily suspended from the EITI Group due to its failure to submit a key report for fiscal year January 1, 2020 to December 31, 2020 since December 2022.

In accordance with Article 10 of Section 4 of the EITI Standard, an implementing country may petition the EITI Board to review its decision regarding suspension. Minister of Natural Resources Vickram Bharrat subsequently appealed the decision through addressing the Chair of the Board in a letter. The Board concluded however that the letter does not present additional evidence that would merit revising the Board’s decision. The Board reaffirmed Guyana’s temporary suspension, noting that the deadline for the publication of the outstanding report remains December 31, 2022.

ABOUT EITI

The Extractive Industries Transparency Initiative is a global standard for the good governance of oil, gas and mineral resources. It seeks to address the key governance issues in the extractive sectors.

By becoming a member of the Extractive Industries Transparency Initiative (EITI), countries commit to disclose information along the extractive industry value chain – from how extraction rights are awarded, to how revenues make their way through government and how they benefit the public. Through participation in the EITI, more than 50 countries have agreed to a common set of rules governing what has to be disclosed and when – the EITI Standard.

The EITI was formed in London in June 2003, when 140 delegates from governments, companies, industry groups, international organisations, civil society organisations and investors agreed the EITI Principles, establishing the EITI as a multi-stakeholder organisation and underpinning its mission.

The momentum for the EITI came in part from a growing body of research, which described how the potential benefits of oil, gas and mining activity were not being realised and mapped their association with increased poverty, conflict and corruption. Transparency and public dialogue were identified as an important starting point for remedying this “resource curse”.

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• curb, Extractive Industries Transparency Initiative (EITI)., Mining, mining sectors, MSG

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