Jocelyn Fraser, Ph.D Student in Mining Engineering // Feb 21, 2015
The EITI has recently introduced requirements for disclosure of sub-national transfers – money collected at the local level from extractive companies or money transferred to local governments as a form of redistribution of mining and oil and gas revenues collected by the national government. It has been said that every EITI member country has its own unique approach to meeting EITI requirements and the situation seems ready to be replicated with the requirement for sub-national reporting. With no common nomenclature and no reporting templates, each country will grapple to develop its own methodology. Countries of conflict are likely to face quite different issues with sub-national reporting than established or emerging democracies. And countries with a long history of resource extraction may face different issues that regions, such as the Philippines or Mongolia, where the extractives sector is relatively new. Some EITI countries grapple with corruption yet have strong civil society watchdogs. Others operate under totalitarian regimes where dissenting views are seldom heard, and rarely tolerated.
Sub-national reporting is a positive step in that it requires government, companies embracing their social responsibility, and communities to work together. It will also be important to build linkages with other initiatives complementary to EITI to ensure greater accountability, promote better governance, and build stronger institutions – the keys to improving the lives of average citizens. Supply chain verification and traceability, mandated by UN Security Council Resolution 1896,[1] and conflict mineral certification as proposed under Dodd Frank are two such initiatives. New international disclosure requirements, such as those contained within the European Union’s Transparency Directive and the Government of Canada’s Extractive Sector Transparency Measures Act should also serve to drive enhanced transparency amongst extractives companies domiciled within these regions. Adherence to the principles of Free Prior and Informed Consent (FPIC) are needed to ensure indigenous peoples approval has been secured in advance of development. And many groups will need to be involved in the ongoing discussion about how countries ensure resource revenues create the greatest good for the greatest number of their citizens.
[1] The resolution calls upon companies to exercise due diligence on suppliers and origins of minerals purchased