8.5 Transparency Initiatives

resisted making this a blanket requirement, recognizing the multi-issue complexity of their relationships with client governments. In some cases, however, transparency has been made an explicit requirement and, more generally, IFIs—especially in resource-rich states—have mainstreamed transparency in their country dialogues. Strict conditionality provisions in IFI agreements have provided the basis for IFI intervention when governments fail to keep their end of the transparency agreement. For example, following amendments to the EI revenue management law in Chad, the World Bank froze the country’s petroleum revenues held abroad (BWP 2006). It must be recognized, however, that conditionality has often been cited as the downfall of projects in developing, resource-rich countries, and many question whether the principle should endure (Koeberle 2003; Bird 1998).

8.5 TRANSPARENCY INITIATIVES

From the early 2000s there has been a significant proliferation in transparency forums and initiatives focusing on the EI sector (World Bank 2010, 18). EI transparency has been a regular item on the agenda of UN agencies, country groupings (such as the G8), and regional groupings (such as the New Partnership for Africa’s Development). However, in terms of dedicated EI sector transparency initiatives, there are currently four major but varied forums that have been developed and each approaches the subject from a slightly different platform: the Kimberley Process Certification Scheme (Kimberley Process), the Publish What You Pay (PWYP) campaign, the EITI, and the World Bank Governance of Extractive Industries (GOXI) online platform.

Kimberley Process

Established in 2003, the Kimberley Process was one of the very first initiatives to use transparency requirements to track so-called blood diamonds (rough diamonds used by rebel movements to finance wars against legitimate governments) and restrict their import from states where they were used to support conflict.19 Under this scheme, member states can certify their diamonds as conflict free before entering the international market. This initiative was developed from UN resolutions aimed at limiting conflicts and atrocities linked to diamonds in states such as Angola, Côte d’Ivoire, Sierra Leone, and the Democratic Republic of Congo.20 It has provoked controversy in its implementation, with opinions differing on its effectiveness.

PWYP campaign

Established in 2002, the PWYP campaign is an international coalition of more than 650 civil society organizations in more than 30 states.21 It undertakes public campaigns and policy advocacy to achieve greater transparency in EI revenue reporting and contracts. Its two main goals have been (1) to encourage companies to publish what they pay and for governments to publish what they earn as a necessary first step toward a more accountable system of resource revenue management and (2) to encourage public disclosure of EI contracts and transparency of licensing procedures in accordance with best international practice.

EITI

Established as an independent international body in 2007, the Extractives Industries Transparency Initiative is a multistakeholder initiative intended to promote accountability and good governance in resource-rich states through the generation and publication of credible data on payments made by EI sector companies to host-state governments.22 The number of petroleum and mining states compliant with or candidates for the EITI standards was 51 as of March 2017. Committed stakeholders include host and home governments, investors, industry, international organizations, and civil society. Its operation is linked to a version of the EI Value Chain concept illustrated in figure 8.1. A Standard for compliance with the EITI process has been agreed to, and procedures for validation of country performance have been established and are currently being applied. The seven requirements of the EITI Standard are summarized in box 8.3.

In many countries, the most important contribution of the EITI has come about because governments have decided to act on recommendations that have emerged from EITI reporting. Experience suggests that the nature of the recommendations in EITI reports and the extent to which the EITI multistakeholder groups and the government follow up on the recommendations significantly influence the impact of the EITI.

In many countries, EITI reports have been useful diagnostic tools identifying weaknesses in government systems. EITI reports have often made recommendations aimed at addressing such weaknesses and improving sector management. They are making an important potential contribution to policy reform and change.

However, even where EITI reporting has revealed shortcomings, the recommendations have often focused on

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