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London, March 17, 2005 – World Bank President James D. Wolfensohn said today good governance and transparency are key to ensuring that resource-rich developing countries benefit from their oil, gas, and mineral wealth.
“Transparency is fundamental to good governance and an essential starting point but it does not do the trick alone. It is one critical ingredient in a system of oversight, accountability and sanction. It reduces the potential for waste, mismanagement, and corruption; fosters democratic debate on the use of revenues; and enhances macroeconomic management,” Mr. Wolfensohn told the London Conference on the Extractive Industries Transparency Initiative (EITI).
Mr. Wolfensohn welcomed the progress governments, companies, and civil society groups have made to date in promoting transparency over payments and revenues in countries where the extractives sector plays a significant economic role.
“The fact that the EITI participants are now ready to endorse measures such as regular publication and independent audits of payments and revenues is testimony to real progress that has been achieved,” Mr. Wolfensohn said.
EITI was launched by British Prime Minister Tony Blair at the Johannesburg World Summit on Sustainable Development in September 2002 to address concerns about corruption and systemic failures in countries with extractive industries. It seeks to create transparency and accountability around payments companies in the extractives sector are making to governments, and revenues that governments are receiving from those companies.
The next EITI meeting will take place in March 2006, but the World Bank president called on the conference delegates not to waste a year. “We must build the practice now,” he said. “We need to expand participation, and we need to broaden, deepen, and strengthen stakeholder commitment.”
Mr. Wolfensohn thanked the British government for its leadership on the initiative. “We are working with the UK government and other partners like the IMF on implementing EITI in many countries, and in promoting the initiative on a global level,” Mr. Wolfensohn said.
Last year, the World Bank Group endorsed the EITI in its follow-up to the review of its own policies in extractive industries (Extractive Industries Review – EIR). Moreover, the Bank provides specialist staff resources to EITI and integrates the initiative into its country programs; it administers a multi-donor EITI technical assistance trust fund; and it set up and manages a website and knowledge management for EITI (www.eitransparency.org).