WBG endorses Extractive Industries Transparency Initiative

Washington, D.C., – The World Bank Group announced today its formal endorsement of the Extractive Industries Transparency Initiative and pledged to work with several developing nations, as well as companies, on ways to publish revenues accruing from oil, gas, and mining sectors.

The Extractive Industries Transparency Initiative was launched in September 2002 by British prime minister Tony Blair at the World Summit on Sustainable Development in Johannesburg, and is being championed by the U.K. Department for International Development.

“We believe this step will both underscore and expand the leadership role that the Bank Group has had in fostering transparency, ensuring accountability, and contributing to sustainable development impact,” said Rashad Kaldany, director of the World Bank Group’s Oil, Gas, Mining, and Chemicals Department.

In many developing and transition countries, revenues from oil, gas, and mining companies – in the form of taxes, royalties, signature bonuses, and other payments – have been an important engine for economic growth and social development. However, research has found that, in some nations with weaker institutions, the lack of accountability and transparency about these revenues can exacerbate poor governance and lead to more corruption, conflict, and inequality.

In recent years, The WBG has pioneered revenue transparency frameworks in several high-profile extractive industries projects including the Chad-Cameroon pipeline and the Baku-Tbilisi-Ceyhan (BTC) pipeline. Kaldany said the decision to participate in the EITI was the result of several factors.

“We have gained more experience in working with companies and governments on these issues, most recently through the BTC pipeline. New research in this area has created more momentum in the international community to focus on these issues,” he said. “And the Extractive Industries Review, which is now winding down under the leadership of Dr. Emil Salim, has very clearly signaled that this is, and will be, a high-priority issue for our stakeholders in civil society.”

The specific aspects of the World Bank Group’s collaboration with the EITI remain to be negotiated. However, Kaldany said they could include:

• A formal initiative within the World Bank Group, funded jointly by the Bank and a multi-donor trust fund, to promote the transparency agenda in extractive industries, compile research and lessons of experience, and disseminate best practice;


• Pilot programs with several developing nations and companies that are willing to pioneer transparency programs; and


• Convening of stakeholders – including governments, industry, and civil society – to help raise awareness and define and implement viable approaches.

Kaldany said, “This is the next evolutionary step in our role as a neutral broker on these complex issues and we are prepared to make a long-term commitment.”

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Contacts:
In Washington:

Ludi Joseph

Phone: (202) 473 7700

Email: ljoseph@ifc.org
Corrie Shanahan

Phone: (202) 294 4697
Email: cshanahan@ifc.org

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