An
international effort to ensure good governance of natural resources could do
more to improve accountability and sustainability, according to a research published by the International
Institute for Environment and Development (IIED).
The
research in the oil and gas-rich Caspian Sea Region relates to the Extractive
Industries Transparency Initiative (EITI), which requires countries to declare the
revenues they receive from companies in the oil, gas and mining sectors, and
requires companies to declare what they pay.
In May
this year, heads of state, government ministers and business leaders will
gather in Sydney, Australia for the EITI’s biennial conference, where they will
agree new rules that will shape the future of the initiative.
IIED’s
research suggests several ways for these new rules to help reduce poverty,
improve lives and ensure that extractive industries operate in a sustainable,
environmentally responsible way.
The
report focuses on three countries: Azerbaijan – the first country globally to
become EITI Compliant; Kazakhstan – an EITI Candidate country that seeks to
become compliant; and Turkmenistan, which has not signed up to the EITI, but
has expressed an interest in learning more about this initiative, in the light
of recent developments in its oil and gas sector.
“Countries
in the Caspian region have considerable natural wealth in the form of oil and
gas deposits that can provide the basis for great improvements in national
development, so long as there are strong institutions, greater transparency and
accountability, and enforcement mechanisms in place,” says co-author of the
report, Professor Ingilab Ahmadov of Azerbaijan’s Khazar University.
“Countries
of the Caspian region have started to improve their governance of oil and gas
through the EITI, though need to ensure that transparency leads to better
governance, accountability and stronger institutions. Only this way can we
achieve real societal change, such as reducing corruption and poverty,” says
co-author, Kazakhstani researcher, Saule Ospanova. “Our research in the region
is relevant globally as it identifies several ways to improve the EITI rules
for even greater impact.”
The new
report recommends that the new EITI rules provide further strategic,
administrative and technical support for disaggregated reporting of payments to
governments.
It also
identifies ways the EITI can contribute to accountability and sustainability in
host countries and support relevant research on these linkages as well as develop
guidance on good practice in subnational reporting, and support pilot
initiatives, such as reporting on public monitoring of community development
spending.
“Natural
resource wealth should translate into tangible benefits for citizens,” says
IIED’s project leader, Dr Emma Wilson. “The EITI is just one of a growing
number of initiatives that aim to ensure greater transparency in how
governments and companies share the wealth in sectors such as oil, gas and
mining.”
“The
EITI has had a promising start,” says Wilson, ”But there is clear potential for
it to move beyond transparency and push also for greater accountability and
enable civil society to make use of the information it generates to hold
governments and companies to account.”
Later
this year Wilson and colleagues will publish a related study based on a
comparison of the Caspian region and sub-Saharan Africa – Uganda, Ghana and
Nigeria.
The
Extractive Industries Transparency Initiative (EITI) is a voluntary global
initiative to promote revenue transparency in the oil, gas and mining sectors,
which became operational in 2006–07.
The EITI
is a coalition of governments, companies, civil society groups, investors and
international organisations.
Signatory
governments are required to declare the revenues they receive from companies,
and the companies operating in those countries are required to declare what
they pay. Participation in EITI has grown significantly over recent years — 37
countries have now signed up; 18 are now Compliant.
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