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At A Glance

• About 3.5 billion people live in countries rich in oil, gas, and minerals. Many of these countries suffer from poverty, corruption, and conflict stemming from weak governance.
  
• The Extractive Industries Transparency Initiative (EITI), launched in 2003, promotes and supports improved governance and transparency in resource-rich countries.  It does this through the full publication and verification of company payments and government revenues from oil, gas, and mining activities.
  
• As a voluntary association of stakeholders with common goals, the EITI includes resource-rich developing countries, donors, international and national resource companies, and civil society.
  
• The World Bank’s oil, gas, and mining unit manages a multi-donor trust fund (MDTF) that provides countries with grants to implement the EITI principles of revenue transparency and accountability, as well as support capacity building for civil society.
  
• As of June 2011, 35 countries are implementing the EITI.  Eleven countries have become compliant with EITI principles while 15 more have made significant progress toward validation.
  
• Compliant countries are keen to move beyond the EITI agenda by building on the transparency platform that EITI provides and scaling up their efforts on governance-related reforms.

How are EITI countries doing?

*As of June 2011

Impact on the Ground

EITI reports have helped uncover financial irregularities and provided a roadmap for meaningful reforms in the oil, gas and mining sectors. Here are examples of the EITI’s impact:

·         Nigeria:  Among the first countries to sign up to the EITI and produce reports beyond the basic requirements.  Reconciliation of revenue data from the petroleum industry reduced discrepancy from $250 million to $16 million and set the stage for wider sector reforms.  These aim to create improved public financial management, stronger government institutions regulating extractive industries, and enhanced civil society capacity and participation.

·         Liberia:  Among the first countries validated by the EITI board in March 2010, Liberia enacted the Liberia EITI Act in 2009. This established LEITI as a public entity with access to the national budget, thus reducing or phasing out the need for donor funding.  EITI is also part of the national plan to develop the mining sector.  Finally, the government expanded the initiative to include the forestry sector, and has assisted with EITI implementation in neighboring Sierra Leone. Ratings for Liberia in Transparency International’s CPI index rose from 137^th (of 158 countries) in 2005 to 97^th (of 180 countries) in 2009, thereby improving the country’s investment climate. 

·         Mongolia:  The country’s mining law mandated both companies and government institutions to report payments and revenues according to EITI principles since 2006. Reconciliation following the initial audit report reduced the discrepancy from MNT 25 billion ($20 million) in February 2008, to 775 million ($620,000) in November 2009.  The government is determined to go beyond EITI implementation in managing Mongolia’s natural resource exploitation, and will include improvements along the whole extractive industries value chain, from bidding for contracts to implementing sustainable development programs.  An EITI law and strategy for 2010-2014 is being drafted and civil society capacity and participation has been enhanced.

Other Benefits of membership in the EITI include:

ü  Sending a clear signal to all stakeholders on national commitment to transparency;

ü  Setting a global standard to reduce investor risks;

ü  Providing a systematic framework for collaboration among government, companies, and civil society on EI sector issues;

ü  Assembling revenue information and extractive industry financial flows in one place (50+ EITI reports issued so far); and

ü  Offering a platform for moving to sector governance reforms and better public financial management—beyond the EITI itself.

Multi-Donor Trust Fund Participants

Grants from the Trust Fund help support technical assistance and global knowledge sharing activities in EITI implementing countries. Donors include: Australia, Belgium, Canada, the European Commission, Finland, France, Germany, the Netherlands, Norway, Spain, Switzerland, the United Kingdom, and the United States.   Japan and Denmark are in the process of becoming contributing members of the EITI-MDFT.

For more information, please visit: www.worldbank.org/eiti-mdtf   and www.eiti.org

Media Contacts:

Mauricio Ríos: 1 (202) 458 2458  mrios@worldbank.org

Christopher Neal: 1 (202) 473-2049   cneal1@worldbank.org

Updated August 2011