Jocelyn Fraser, PhD student in Mining engineering // March 15, 2015
Research to assess the readiness of EITI countries to implement sub-national reporting has highlighted some interesting findings. The work has also raised some fundamental questions.
What does being compliant really mean?
EITI Chair Clare Short recently noted that compliance is neither a seal of approval nor an instant cure https://eiti.org/blog/eiti-not-seal-approval-sign-change. She acknowledges the apparent contradiction in countries of conflict and corruption being deemed “compliant” by the EITI, yet notes that membership in the EITI reflects a political and public commitment to reform. Reform may be easier to achieve in some countries that others and leads to a second question.
Is the legal framework in place to support reform?
Global Witness has noted that very few resource-rich countries have a strong legal framework to govern extractive sector, publish data and have some oversight on accountability. Without a strong governance framework, the risks of mismanagement increase when sub-national governments with limited staff, skills or experience receive large infusions of money. Especially if those revenue transfers occur sporadically. As the goal of sub-national reporting is to enhance transparency, the next question becomes . . .
Can the EITI be integrated into government systems to act as a platform for reform?
Philosophically, the EITI is presented as a platform for reform. Practically, it is a diagnostic tool. Easy for some members to use; more difficult for others. There is good reason to laud the progress EITI countries have made yet considerable effort is still required to achieve transparency in the extractive sector. As has been noted in previous blog posts, weak institutions are not well equipped to fight corruption and fraud.
The EITI may be able to do more to integrate into government systems to provide support for reform and address ineffective revenue management. Public debate about the reporting of extractive revenue should also lead to governance reform.
Can the complexity of resource revenue be explained clearly, concisely, and in a manner that will motivate ordinary citizens to take an interest?
The answer should be “yes”. However, in many EITI countries there is little evidence to date of effective communications – that is communication that enables lay people to become engaged with their country’s EITI effort. Existing websites and EITI country reports are dense, arcane documents potentially of some interest to experts but a challenge for many to decipher. Beyond the filing EITI country reports (many of which appear several years after the reporting period), information flow in the countries studied remains ad hoc, which undermines engagement. And without reporting on how extractive revenues are used at the local level there is little in the materials to address the average citizen’s principal interest: What is in it for me or my community?
How is money from extractive industries used?
The EITI has been clear that their mandate is not evaluating how resource revenue is used yet this remains an issue for member countries to address. In preparation for implementing sub-national reporting, in-country Multi Stakeholder Groups (MSG) could work with sub-national governments, civil society and citizen groups to establish criteria for balancing investment in short-term community needs with long-term economic development. The criteria might include engaging stakeholders to identify needs and maximize benefits from resource revenue at the local level; enabling small and medium enterprise; co-development of infrastructure required for both extractive industries and local communities; and investing to develop human capital. The later is a particularly relevant criteria in EITI member countries attempting to break the cycle of conflict and poverty, strengthen institutions, and support good governance.