The EITI Blog

By T. Negbalee Warner
Head of Secretariat, LEITI

Liberia has been one of the most cursed of all resource-rich countries. Despite an abundance of iron ore, diamonds, gold, timber and rubber, Liberia was for fourteen years ravaged by a horrific civil war that disintegrated the nation and brought it near the bottom of the UN's Human Development Index, thanks to corruption and mismanagement of the country's abundant resources which also fuelled the war. When the war ended and general elections were held in 2005, the new present Government led by President Ellen Johnson Sirleaf vowed to ensure national growth and development through better revenue management.

Liberia has made excellent progress since committing to the EITI, and subsequently becoming an EITI candidate country on September 27, 2007. Liberia is the first country to decide to include forestry within its EITI scope based on historical experiences of persistent misuse of the forest wealth of the country; until recently, forestry represented 57% of total exports, but 6% of tax revenue.

According to Liberia's adopted costed work plan and a subsequent MOU signed by the stakeholders, the first EITI report of Liberia is scheduled to be produced before the end of October 2008.

Liberia's progress to date includes the following:

1. The full and consistent engagement of all stakeholders; Members of the Stakeholders Steering Group have average consistent attendance and participation rate of 90%;
2. The establishment and staffing of a capable three-person professional secretariat;
3. The approval of a costed work plan along with the mobilization of about 80% of the funding resources required for a two-year fiscal period ending June 2009;
4. Completion of the legal review to determine possible legal impediments to the implementation of the LEITI;
5. The execution of a Memorandum of Understanding (MOU) by stakeholders, formally committing themselves to the full implementation of the LEITI;
6. Undertaking of a forestry scooping study to investigate and advise on the relative ease or difficulty that could attend the application of EITI principles to the forestry sector. The preliminary report of the Study was presented at a meeting of the Group on May 1, 2008, and a final report is due before the end of May 2008;
7. Completion of reporting templates for the government and the private sector; and
8. Finalization of the TOR for an independent LEITI administrator/auditor, along with authorization for the commencement of the recruitment process.

In addition, a comprehensive LEITI public outreach and general communications strategy is being developed to be completed and presented to the LEITI in May 2008.

With all the above activity, Liberia is well on the way to becoming a leader amongst EITI implementing countries despite being a late entrant. We believe that this will make a significant contribution to lifting Liberia out of its poverty-ridden past.

For more information about the Liberia and the EITI, visit www.eitiliberia.org.

By Eddie Rich

2008 is going to be an exciting year for EITI.  The first full year of the international Secretariat, a host of implementing countries, the first validations, and a Conference.  Furthermore, the resource curse is subjet de jour of researchers, journalists, commentators and activists.  But these fashions change notoriously quickly – especially if we are no longer seen as relevant to the main development issues.  How will the EITI shape and be shaped by these big policy debates?  Below I list the 10 big issues that I think that the EITI needs to position itself on in the coming year.  On many of them, we will need your help – whether you are an activist, a researcher, a journalist, an official, or just ordinary Joe in the street. 

1. The role of the big emerging economies

Here I have in mind China, India, Brazil, South Africa, Russia, Indonesia, Mexico, etc.  These countries are both importers and producers.  As importers they are creating higher levels of demand for raw materials than the world has ever seen before. They are engaging on the world stage at a level we could not have imagined even 10 years ago.  For EITI to matter 10 years from now, these emerging economies will need to be the champions.  We invite them to shape, implement and promote the initiative. 

2. Security and counter-terrorism

Much of this debate is centred around energy security, ie. how to avoid reliance on unstable countries. It is not easy to prove a link between energy security and the EITI, but the logic is attractive – more transparency leads to better governance leads to greater stability.  In other words, can we make the case that EITI is helping to prevent extremism? 

3. Regionalism

EITI is a global standard, implemented at the country level.  Yet increasingly regional bodies are playing important influencing roles.   We see Nigeria providing EITI technical advice to the region, and the Bank of Central Africa establishing an EITI unit.  What role is there for organisations like ECOWAS or initiatives like the New Partnership for African Development (NEPAD)?  How effective is peer pressure in promoting these initiatives as compares to international community pressure? 

4. Political Clubs

We have seen the importance of endorsement and peer pressure in the G8 for the EITI.  The G20 and the EU are also coming out with strong clear messages in support of the EITI.  We hope to have a UN resolution agreed in Spring 2008.  But should we be pushing for action from OPEC, the OECD, the Commonwealth, and the World Economic Forum?

5. Conflict and fragile states

What is the link between EITI and conflict reduction in situations such as Chad or South Sudan or in post-conflict situations such as Liberia and Iraq.  If we can establish evidence of a beneficial link, we will see EITI emerge increasingly as part of peace negotiations. 

6. Corruption

It was Wolfowitz’s motif (and perhaps downfall).  It was the inspiration behind Transparency International amongst many highly successful NGOs engaged in the EITI.  Yet, how closely does the EITI want to link itself to this agenda. It is certainly part of the reason why we exist, but you don’t have to be corrupt to benefit from transparency.  Nor do many of our stakeholders consider corruption to be their motivation for the EITI.  Accusing countries or companies of corruption is rarely persuasive.  Whilst we should be bold that corruption is a regular consequence of the resource curse and that the EITI is part of the solution in resource-rich countries, we must avoid the perception that the EITI is a club for the corrupt.

7. New technologies

What will the spread of the internet, mobile phones and the media mean for transparency issues?  Greater access to information also breeds greater demand for information. What are the opportunities here for EITI?

8. The partnership model of development

The governance of the EITI is being scrutinised to the smallest detail as part of the emerging debate about multi-stakeholder partnerships.  The international governance vacuum is increasingly filled with these multi-stakeholder codes and standards, but what are the implications for international public law?  What are the implications of the accountability of NGOs and companies?  The role and mandate of civil society is already proving a critical issue in validation discussions. How robust is our governance model especially in relation to representation, mandate and accountability? Should we push harder on the OECD to adopt EITI as a core standard?

9. Pressure to demonstrate results

A high profile and interest in EITI has its costs – we will face a backlash from the development community unless we can demonstrate that it brings results for ordinary people.  The untransparent will use it as a reason not to implement.   But EITI is not a widget factory.  We cannot be measured by revenue, sales, profits or publications.  We need robust performance indicators, better research, better evaluation, and better human interest stories.

10. Scope of EITI

Pressure is mounting to deepen the scope of the EITI to cover contracts and operations at more upstream end and expenditure and allocation at the more downstream end.  There will be pressure to ensure more disaggregation and wider materiality at the country level. There will be pressure for not just financial audits but physical, process and contractual audits too.  There will be pressure for greater sub-national implementation.  In Liberia, the EITI covers forestry.  In Kazakhstan, EITI reporting for oil, gas and mining companies is voluntary.  Nigeria has product sharing agreements, whilst Norway has a concessionary contract system, and Iran has a service contract system.  Whilst the EITI standard presently has a limited focus, it is a flexible beast and as many different models as implementing countries exist.  The Nigeria EITI looks very different from the Azerbaijan EITI looks very different from the Peru EITI.  The EITI is a learning process and whilst it will remain a robust global standard, it will also be flexible enough to ensure different approaches to implementation in each country and to learn best practice as we develop the product.  We are going to learn a lot from validations over the next two years.

2008 has already brought an avalanche of news from Pakistan, Kenya, New Hampshire, and elsewhere.  How will EITI avoid being lost in the crush.  Please add your thoughts on whether the above are going to be the key development issues for EITI.

Eddie Rich is Policy Adviser for the EITI.

Dear all,

I too want to welcome you all to our new website. The international EITI Secretariat opened here in Oslo last month. With the launch of this new website we take another important step in the building of our organization and in contributing towards a standard and movement for revenue transparency.

The EITI Secretariat cannot “do” the EITI. The “doing” of the EITI needs to be done by countries committed to implementing it, in close collaboration with all of their stakeholders. The Secretariat’s aim is to coordinate and be a resource for all of those involved with implementation. We are committed to making this website not simply a place where information can be found about the EITI, but a resource centre and forum for debate about EITI-implementation and revenue transparency. 

That is why this is actually intended to be a guest blog. We will invite a different person involved with the implementation of the EITI every 3 to 4 weeks to host this blog. But we start with ourselves, so that you have a better chance to get to know us and the new Secretariat here in Oslo. So for the next month I will be introducing the Secretariat and look forward to debating the EITI in this corner of our new website.

Jonas