What is EITI?

A global initiative to increase transparency of mining revenues and expenditure A global initiative to increase transparency of mining revenues and expenditure Launched in 2002 at World Summit on Sustainable Development Launched in 2002 at World Summit on Sustainable Development Sponsored by DFID and World Bank Sponsored by DFID and World Bank 22 countries including Peru have committed to EITI principles 22 countries including Peru have committed to EITI principles Extractive Industries Transparency Initiative

Captures and publishes data on payments made by companies to governments, and revenues received by governments from companies Captures and publishes data on payments made by companies to governments, and revenues received by governments from companies Multi-stakeholder initiative Multi-stakeholder initiative Ensures all stakeholders consulted on how revenues used Ensures all stakeholders consulted on how revenues used Extractive Industries Transparency Initiative

Extractive Industries Transparency Initiative – the process SIGN UP – government makes public statement, stakeholders identified, initiating conference held SET UP - multi stakeholder committee and agree workplan and basic procedures SET UP - multi stakeholder committee and agree workplan and basic procedures PROCESS DEVELOPMENT – technical needs identified, independent auditor selected PROCESS DEVELOPMENT – technical needs identified, independent auditor selected

Extractive Industries Transparency Initiative – the process (cont.) DISCLOSURE & PUBLICATION – design reporting template, data submitted to auditor PUBLIC DISSEMINATION – EITI report published, discrepancies identified, auditor recommends improvements, stakeholders review data PUBLIC DISSEMINATION – EITI report published, discrepancies identified, auditor recommends improvements, stakeholders review data REVIEW – review process, make improvements, review workplan, continue regular reporting REVIEW – review process, make improvements, review workplan, continue regular reporting

Is EITI important? WHY?

Over 50 developing countries have significant extractive industries – 3.5 billion people in total Over 50 developing countries have significant extractive industries – 3.5 billion people in total Revenues from oil and gas and mining should be engine for growth and developmentRevenues from oil and gas and mining should be engine for growth and development Often the opposite is the caseOften the opposite is the case In many cases a close correlation between natural resources and poverty and inequality of income In many cases a close correlation between natural resources and poverty and inequality of income Is EITI important? Why?

Increases accountability Increases accountability Reduces risk of diversion or misappropriation of resources Reduces risk of diversion or misappropriation of resources Empowers different stakeholders Empowers different stakeholders Holds governments to account Holds governments to account Makes it more difficult to divert funds from sustainable development Makes it more difficult to divert funds from sustainable development Improves business environment, helping countries to attract FDI Improves business environment, helping countries to attract FDI Companies able to demonstrate how much they contribute to economy Companies able to demonstrate how much they contribute to economy Is EITI important? Why?

How is Peru doing?

Source: DFID

Kazakhstan (June 2005) October-December 2005 – MoU signed by Government, Industry and Civil Society October-December 2005 – MoU signed by Government, Industry and Civil Society April 2006 – Agreed process to select auditor April 2006 – Agreed process to select auditor Coordinating Committee formed – first report due late 2006 Coordinating Committee formed – first report due late 2006

Guinea (March 2005) June 2005 – Implementation Committee formed June 2005 – Implementation Committee formed July 2005 – three subcommittees and Technical Secretariat formed; timetable established July 2005 – three subcommittees and Technical Secretariat formed; timetable established 2005 & 2006 – capacity building in key institutions carried out 2005 & 2006 – capacity building in key institutions carried out

Guinea (cont.) Late 2005 – reporting template designed; review of non- audited data began Late 2005 – reporting template designed; review of non- audited data began October 2006 – Selection of auditor underway October 2006 – Selection of auditor underway Now – Communication strategy to civil society planned Now – Communication strategy to civil society planned

Mauritania (September 2005) November 2005 – First EITI mission to identify Stakeholders November 2005 – First EITI mission to identify Stakeholders January 2006 – National EITI Committee formed January 2006 – National EITI Committee formed January 2006 – 2nd EITI mission to discuss roadmap for implementation January 2006 – 2nd EITI mission to discuss roadmap for implementation May 2006 – Stakeholder workshop held May 2006 – Stakeholder workshop held

Nigeria (June 2003) April 2006 – First auditor reports for 1999 – 2004 published. Weaknesses in transparency, accounting and management identified, recommnedations made April 2006 – First auditor reports for 1999 – 2004 published. Weaknesses in transparency, accounting and management identified, recommnedations made Audits for 2005 and Q due. Audits for 2005 and Q due. January 2006 – legislation proposed to make annual audits mandatory for EI companies January 2006 – legislation proposed to make annual audits mandatory for EI companies Three EITI roadshows held, two more planned Three EITI roadshows held, two more planned Training planned for govt, civil society on role of EITITraining planned for govt, civil society on role of EITI

Peru (May 2005) Jun 2005 – Action Plan adopted and published Jun 2005 – Action Plan adopted and published Oct 2005 – MoU signed between World Bank and Peruvian govt for implementation of EITI Oct 2005 – MoU signed between World Bank and Peruvian govt for implementation of EITI May 2006 – Supreme Decree approving Action Plan and creating working committee. Appointment of working committee and EITI implementation to begin ‘within weeks’ May 2006 – Supreme Decree approving Action Plan and creating working committee. Appointment of working committee and EITI implementation to begin ‘within weeks’ Oct 2006 – All stakeholders identified Oct 2006 – All stakeholders identified Implementation? Implementation?

Summary: Could do better

More information :

Nicola Ware Head of UK Trade & Investment British Embassy