Press Release

18 September 2006

New transparency ‘test’ for oil and mining industry proposed

Independent evaluators will measure countries and the oil and mining companies working there for their transparency ‘rating’ in new proposals aimed at toughening up measures to beat corruption.

The new transparency measure is one of eight key recommendations set out by the International Advisory Group of the Extractive Industries Transparency Initiative (EITI) which publishes its report today.

The proposals are the culmination of eighteen months’ discussion by some of the world’s leading oil, gas and mining companies, governments, NGOs, local community groups and investors.

Gareth Thomas, the UK Minister for International Development, said;

“This report will be a vital step forward in making sure EITI becomes a rigorous standard for transparency in the oil, gas and mineral sector. This can mean the difference between a flourishing economy and one marred by corruption and poor growth.”

More than three and a half billion people live in countries rich in oil, gas or minerals. These natural resources provide great opportunities to improve the lives of poor people but there are risks. Bad management and lack of transparency undermines these opportunities and can lead to poverty, conflict and corruption. Improving transparency of the revenues generated by these resources makes it more likely that countries benefit from them. The Extractive Industries Transparency Initiative (EITI) aims to create this transparency.

The report, written by the International Advisory Group of the Extractive Industries Transparency Initiative (EITI) sets out a series of recommendations aimed at measuring transparency in the oil and mining sectors. If agreed, these recommendations will be an important step in making EITI a global standard in good management of natural resources. It will establish which countries are, and are not, fully committed to increasing the transparency of their revenues derived from sales of oil, gas and minerals.

It is expected that the report will be endorsed at the next international EITI conference, to be held on 16-17 October in Oslo.

Norwegian Minister of Foreign Affairs, Jonas Gahr Støre said;

“The EITI Oslo Conference sets out to improve implementation and expand the number of participants in the EITI. The expected endorsement of the IAG recommendations will increase the legitimacy of the EITI and make it more sustainable. In meeting these objectives, we will make the Oslo Conference a milestone towards making EITI a global norm.”

Peter Eigen, the founder of Transparency International, who chaired the group said;

“To lead such a varied group of stakeholders through the process to develop this report was challenging, but incredibly exciting. Getting so many different people round the table to discuss these issues shows that everyone has an interest in seeing EITI succeed. The stakes, of course, are very high."

Mark Moody-Stuart, Chairman of Anglo American said;

“The Extractive Industries Transparency Initiative is of fundamental importance in ensuring that the tax revenues raised from the development of natural resources are protected from embezzlement and are used in an accountable and, hopefully, sustainable way. It is an important element in strategies for: improving governance; increasing trust between companies and local stakeholders and between governments and their citizens; and for using investment in mining to spark wider development. I welcome the report from the International Advisory Group as the basis for underpinning the credibility of the implementation of EITI, broadening participation in the initiative from the mining sector and for extending revenue transparency in relevant countries down to the regional level.”

The report demonstrates how the international community is working together to address the challenges faced by the oil and mining sectors. With companies such as Anglo American, BP, Chevron and Petrobras working alongside representatives from the Governments of the United States, France, Azerbaijan, Peru and Nigeria, local community groups and international NGOs such as Global Witness and the Open Society Institute, the membership of the group reflected the complexities of making governments and businesses more accountable to the people.

Summary of Recommendations

Recommendation 1: EITI is a multi-stakeholder initiative. The governments of implementing countries should ensure that implementation is in accordance with the EITI Principles and Criteria, with the full contribution of all stakeholders.

Recommendation 2: After committing to implement EITI, countries should be required to Validate their progress on a regular basis.

Recommendation 3: Oil, gas and mining companies operating in countries implementing EITI should be validated as part of country Validation. Companies that commit at the international level should complete a self-assessment form.

Recommendation 4: EITI should develop clearer evidence of the benefits of implementing EITI as part of broader governance reform; and other benefits, such as improved energy security and a better business climate.

Recommendation 5: EITI should pay more attention to the specific context of the mining sector.

Recommendation 6: EITI and EITI-implementing countries should identify appropriate opportunities to work with other transparency, anti-corruption, development and energy security programs.

Recommendation 7: EITI should undertake further work on the possibility of sub-national implementation.

Recommendation 8: EITI should work with emerging economy governments to encourage their greater engagement with EITI.

Recommendation 9: Support for implementing EITI should be country driven and sustainable, while focusing on results and working in partnership.

Recommendation 10: EITI should establish a multi-stakeholder Board, supported by a Secretariat, to manage EITI at the international level.

Notes to Editors

1. EITI has been managed by the Department for International Development since its launch by the Prime Minister in 2002. The Department has given financial and technical support to EITI and in September committed a further $1 million to its implementation in developing countries.

2. The International Advisory Group is an independent grouping of senior representatives from Governments (Azerbaijan, France, Nigeria, Norway, Peru, United States), companies (AngloAmerican, BP, Chevron, Petrobras), NGOs (the Azerbaijan Coalition, Global Witness, Open Society Institute, West African Catholic Bishops Conference), investors (F&C Asset Management) and the IMF and the World Bank.

3. The countries currently implementing the EITI are: Azerbaijan, Ghana, Nigeria, Timor Leste, Republic of Congo; Kyrgyzstan; Sao Tome & Principe, Sierra Leone, Gabon, Equatorial Guinea, Cameroon, Democratic Republic of Congo, Guinea, Niger, Peru, Kazakhstan, Mauritania, Mongolia and Mali.

4. Companies supporting EITI include Anglo American, BP, Chevron, Shell, ExxonMobil, and Rio Tinto. NGOs and Civil Society Organisations supporting EITI include Transparency International, Open Society Institute, Revenue Watch and the Publish What You Pay Coalition. Institutional Investors supporting the EITI number over 65 pension funds and asset managers, including F&C Asset Management, Fidelity Investments, Merrill Lynch Investment Managers, PGGM, Schroders and TIAA CREF.

5. Three members of the IAG are available to speak to the media:

Edward Bickham
Executive Vice President External Affairs
Anglo American
Tel: 020 7968 8547 E-mail: ebickham@angloamerican.co.uk 

Gavin Hayman
Lead Campaigner
Global Witness
Tel: 020 7561 6361 E-mail: ghayman@globalwitness.org 

Karina Litvack
Director, Head of Governance & Socially Responsible Investment
Mobile Number: 07939 241 044 Email: karina.litvack@fandc.com 

6. The full report and details of the international conference in October can be found of the EITI website www.eitransparency.org For further information please contact:

Department for International Development
Press Office
Mr Yasser Mehmood
020 7023 0600

Or for more information on the EITI Conference, please contact:

Tormod Endresen
Deputy Director General
Ministry of Foreign Affairs
Norway
Telephone: 47 22 24 3869
E-mail: tormod.endresen@mfa.no 

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