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G8 leaders must follow through on commitments to promote oil revenue transparency

Source: Publish What You Pay International
Date: 18 Jun 2006

G8 leaders in St Petersburg pledged to promote transparency in the management of oil revenues as part of international efforts to curb corruption and to stem the growing energy crisis that threatens the supply of resources to world markets. The G8 must now ramp up support for the Extractive Industries Transparency Initiative (EITI), ensure full compliance of developing countries with the IMF Guide on Resource Revenue Transparency, and put in place legislation to make revenue transparency mandatory of extractive companies, banks, export credit agencies and international financial institutions.

Energy security has been one of the predominant themes of this year’s summit under Russia’s presidency. The 2006 G8 agreement to promote energy sector transparency [1] is consistent with previous G8 summit commitments, which have helped to build international consensus that transparency is key to good governance of public institutions, corporations and markets. Without accurate, comprehensive and timely information on energy revenue flows to governments, there is no way for citizens or investors to exercise meaningful oversight and prevent abuses of power. Since the first G8 agreement in Evian in 2003, progress has been made in getting a greater number of countries to open up their books to scrutiny under the auspices of the EITI.

Three years later, however, transparency is still nowhere near a codified global standard, and the majority of the world’s oil, gas and mineral rich countries still do not have resource revenue transparency mechanisms in place. The EITI lingers in a fragile position [2]. To bolster the EITI and to ensure that the St Petersburg commitments result in real change on transparency, the Publish What You Pay coalition [2] now calls on G8 member states to:


  1. Take the diplomatic lead in expanding the EITI into a truly global initiative, incorporating the remaining 30 out of 51 resource-dependent countries [3], including Angola, Indonesia, Iraq and Venezuela among others;

  2. Ensure that there is a proper system for validating progress made by countries and companies towards agreed principles and criteria;

  3. Maintain the EITI as a high priority policy initiative, and ensure that the international secretariat is housed in a strategic world capital;

  4. Initiate legislation to require all companies, both based within their borders and on their stock markets, to disclose all revenue payments to resource-producer governments.


World energy markets are likely to tighten further in the next few years, amplifying the impact of supply disruptions caused by political instability. At the same time, unchecked corruption and misuse of revenues will increase tensions within many producer countries that make instability more likely. The human, economic and strategic cost of opacity is growing.

Contacts and further information

International: Henry Parham, PWYP Intl Coordinator: +44 77 6026 8959
UK: Gavin Hayman, Oil Campaign, Global Witness: +44 78 4305 8756 (London)
USA: Sarah Pray, PWYP U.S. Coordinator: +1 202 721 5623 (Washington D.C.)
France: Michel Roy, PWYP France, Secours Catholique: +33 607 993 460 (Paris)
Germany: Jesse Garcia, Transparency International: +49 171 421 0789 (Berlin)
Canada: Wes Cragg, Transparency International Canada: +1 416 736 2100 ext.20686 (Toronto)

Notes


  1. 2006 G8 Communiqué on “Global Energy Security”: “As a critical tool in the fight against corruption, we will also take forward efforts to make management of public revenues from energy exports more transparent, including in the context of the Extractive Industries Transparency Initiative (EITI) and the IMF Guide on Resource Revenue Transparency (GRRT).” (4, Section I: Increasing Transparency, Predictability, and Stability of Global Energy Markets). See here for full details

  2. While 21 countries are now committed to implement the EITI, only Azerbaijan and Nigeria have published audited reports on earnings from their respective oil and gas industries, and yet there is still a long way to go to ensure full transparency and accountability in both countries. No mineral-rich country has yet published data. Others are expected to come on board soon but progress remains patchy and unpredictable. Civil society activists working towards greater transparency and the protection of human rights in Angola and the Democratic Republic of Congo have recently faced numerous intimidations, which have threatened their security and freedom to work on these issues. In Congo Brazzaville, the two leading PWYP campaigners in the country were arrested under what PWYP believes to be trumped-up charges intended to discredit and crack down on the work they had been doing to promote oil revenue transparency. For further details on the EITI go to: www.eitransparency.org

  3. The Publish What You Pay (PWYP) coalition campaigns for transparency in the payment, receipt and management of revenues from the oil, gas and mining industries. PWYP is supported by a worldwide coalition of over 300 anti-corruption, development and human rights NGOs from over 50 countries. The NGO coalition believes that revenue transparency is an essential condition for alleviating poverty, promoting just development, improving corporate social responsibility, and reducing corruption in resource-rich developing countries. See: www.publishwhatyoupay.org

    4. See IMF “Guide on Resource Revenue Transparency”:http://www.imf.org/external/pubs/ft/grrt/eng/060705.htm

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