However, poor natural resource governance has often led to corruption and conflict. More openness and public scrutiny of how wealth from a country’s extractive sector is used and managed is necessary to ensure that natural resources benefit all.
The EITI is a global standard to promote transparent and accountable management of natural resources. It seeks to strengthen government and company systems, inform public debate and promote understanding. In each of the 49 implementing countries, the EITI is supported by a coalition of government, companies, and civil society.
The information found in EITI Reports helps governments monitor and forecast revenues from their extractive sector. Countries can use this information to verify that they are receiving the amount due to them. The EITI alone does not enable such verification. EITI Reports must be comprehensible, actively promoted, publicly accessible, and contribute to public debate. Implementing countries are also required to publish “electronic data files” and are encouraged to move towards online disclosure of payments and income. More and more EITI Reports also include information on how revenues are distributed nationally, including in budgets and sovereign wealth funds, which have a vital role to play in supporting any fluctuation in the budgets and currencies of resource-rich countries.
The impact of the EITI is evident when governments decide to implement the recommendations that have emerged from EITI reporting. In some countries, EITI Reports have been a useful tool highlighting weaknesses in government systems. In other cases, the report recommendations have been aimed at addressing such weaknesses and improving sector management, thus making an important contribution to policy reform and change.
Reforming at the low point
The recent fall in commodity prices has highlighted the key role that the extractive sector plays in the economies of many countries. The sector not only provides revenue, but also employment, and creates extra demand for goods and services from other sectors. During this era, the need for increased trust, better information and good policies is stronger.