- About 3.5 billion people live in countries rich in oil, gas or minerals. Many of these countries suffer from poverty, corruption and conflict stemming from weak governance. Too often, mineral, oil and gas resources have become a source of conflict rather than opportunity. This must change, especially as some of the world’s lowest-income countries have abundant resources. Africa has about 30% of the world’s mineral reserves, 10% of the world’s oil, and 8% of the world’s natural gas. New exploration and extraction technology is driving new finds.
- The World Bank Group’s involvement in extractive industries seeks to help countries seize opportunities they offer for development and poverty reduction. Most Bank Group interventions are in the governance area, to encourage transparent management of extractive industry revenues so that they provide benefits for local people, and that the industries themselves respect local community needs, as well as the environment.
- The Bank Group's portfolio for extractive industries comprises 13 IDA credits, of which 10 are in Africa, two in East Asia-Pacific, and one in South Asia, for a total of $412 million. The Bank also oversees 27 recipient-executed trust fund projects worth a total of $63 million, and nearly 60 technical assistance activities in 38 countries. In fiscal year 2013, $70 million in new IDA credits and $736 million in IFC investments were approved for the extractive industries sector.
- The Extractive Industries Transparency Initiative (EITI) supports improved governance and transparency in resource-rich countries through the full publication and verification of company payments and government revenues from oil, gas, and mining activities. An EITI Multi-Donor Trust Fund, managed by the World Bank, provides technical assistance to governments implementing EITI requirements. A total of 39 countries are now implementing EITI, of which 23 are compliant. Another 16 are EITI candidates. More applicants are expected soon.
- The Extractive Industries Technical Advisory Facility (EI-TAF) is a multi-donor trust fund managed by the World Bank that facilitates advisory services to resource-rich, developing country governments for capacity building related to extractive industry contract negotiations and associated policy reforms/frameworks.
- EITI work includes support to involve civil society, along with outreach to bring more countries on board. Compliant countries are moving beyond the EITI agenda by scaling up governance-related reforms. EITI reports have helped uncover financial irregularities and provided a roadmap for reforms in the oil, gas and mining sectors. Specific examples of the EITI’s impact:
- Nigeria was the first African government to decide, in 2003, to implement EITI. A Multi-Stakeholder Group was convened, whose recommendations led to the establishment of Nigeria EITI, a permanent body to manage implementation of EITI requirements. In 2011, Nigeria became EITI compliant, and at the Sixth Global EITI Conference in Sydney in May 2013, it was recognized as best-performing EITI country. This reflects the rigor of Nigeria EITI’s (NEITI) audit reports, its assertive effort to publicize them, and a complementary campaign to inform the debate over a new Petroleum Industry Bill currently before Nigeria’s National Assembly. NEITI’s audit report covering the period 1999-2008 identified a loss of $2.6 billion in revenues to government due to “leakages” in the system, and a failure by oil companies to pay $9.9 billion in royalties. The latter finding enabled Nigeria to recover $2.4 billion to date. Subsequent audits by NEITI found that Nigeria earned $140 billion for the oil and gas sector over the three years 2009-11, and 55 billion Naira from solid minerals over the four years 2007-10.
- Indonesia started to implement EITI in 2010, and published its first EITI report in 2013, revealing $25 billion in revenues in 2009, or 24% of government revenues that year, from 57 oil and gas companies, 18 mineral extraction companies, and 54 coal mining companies. “EITI is succeeding,” said Erry Riyana Hardjapamekas, chair of the Independent Team for National Bureaucratic Reforms. “Indonesia is the first EITI implementing state to produce full traceability along the oil and gas revenue chain.”
- An improved EITI Standard was approved at the Sixth EITI Global Conference in May 2013. It sets clearer rules, encourages more understandable, relevant and more reliable information, as well as better linkages to wider reforms. It also requires effective oversight by the Multi-Stakeholder Group, timely publication of EITI reports with contextual information about the extractive industry, full government disclosure of extractive industry revenues, and disclosure of all material payments to government by oil, gas and mining companies, among others.
Multi Donor Trust Fund Participants
EITI Multi-Donor Trust Fund grants support technical assistance and knowledge-sharing in implementing countries. Donors include Australia, Belgium, Canada, Denmark, the European Commission, Finland, France, Germany, Japan, the Netherlands, Norway, Spain, Switzerland, the UK and the US.
For more information, please visit: www.worldbank.org/eiti-mdtf and www.eiti.org
Christopher Neal: 1 (202) 473-2049 firstname.lastname@example.org
Mauricio Ríos: 1 (202) 458 2458 email@example.com
Updated September 2013