France, UK Join Global Transparency Initiative for Extractive Industry

Source: Compliance Week
Date: 29 May 2022

In a move hailed by transparency advocates, the United Kingdom and France this week announced plans to join an anti-corruption initiative focused on the gas, oil, and mining industries.

UK Prime Minister David Cameron and French President Francois Hollande revealed the decision to join the Extractive Industries Transparency Initiative (EITI) during a joint press conference in Paris. The EITI requires full disclosure of taxes, royalties and other fees paid to host countries from the oil, gas, and mining sectors. The “publish what you pay” initiative, launched in 2002, was designed to combat corruption and ensure transparent management of natural resources. Under EITI, extractive companies disclose what they pay governments and governments disclose any payments they receive from the sector.  An estimated 3.5 billion people live in resource-rich nations, but too often receive no benefit from their country's wealth of resources.

Cameron said the decision will be good for government, business and citizens alike. He said joining EITI means that the United Kingdom will do its part in ensuring people around the globe benefit fairly from their countries' natural resources.

“Mineral wealth for developing countries should be a blessing, not a curse,” said Cameron, urging other G8 nations to embrace the same standards. “Oil, gas, and mining can, if managed well, deliver valuable economic benefits to poor countries, reducing poverty and driving growth. And if people can see how much their government receives from selling the resources that rightfully belong to them, they can question how that money is being spent and drive action to stamp out corruption.”

The United Kingdom and France join nearly 40 other countries already signed on to the effort. The announcement was made during the run-up to the EITI Global Conference in Sydney. Representatives from nearly 100 countries are expected to tackle the issue of strengthening and extending the EITI standard. Transparency also will be on the agenda at the upcoming G8 Summit in Northern Ireland.

French Minister for Development Pascal Canfin tweeted after the announcement, “Proud of France joining EITI. Transparency moves forward both in developed and developing countries.”

Clare Short, chair of EITI, praised the announcement, saying it demonstrates a commitment from both countries to “getting their own houses in order on extractive industries best practice.”

“It is only through transparency of the production of oil, gas, and mining across the world that we can limit corruption, make sure that the sector is well governed, and that the income from it leads to development,” Short said. “In France and the UK, the EITI will hopefully provide a focus for informed debates about the sector. Globally, it will signal that transparent management of the extractive industries is not an aspiration for countries, it is an expectation.”

So far, 37 countries have begun to implement the EITI standard. Other countries, including the United States, Colombia, the Philippines, and Myanmar, also have announced plans to join the initiative.

UK Business Secretary Vince Cable said some of the biggest extractives companies are already on board with the initiative. However, he added, it will be a long process to implement the standards correctly.

“This is about leveling the global playing field and boosting transparency, not about getting in the way of business and meddling in their affairs,” Cable said.

Employment Relations and Consumer Affairs Minister Jo Swinson has been tapped to oversee the implementation of EITI in the United Kingdom. Once accepted as a candidate by EITI, nations have two and a half years to comply with the standards.

By Roberta Holland

Compliance Week