On International Anti-Corruption Day, the EITI, NRGI and TI Accountable Mining are partnering up to present new tools and guidance to combat extractive sector corruption.
The extractive sector is notoriously prone to corruption, accounting for one in five cases of transnational bribery according to the OECD. There have always been great expectations about the role of transparency in addressing corruption risks in the extractive industries. This is not surprising.
To this end, EITI stakeholders have been working to strengthen the contribution that the EITI can make to anti-corruption efforts. The EITI International Secretariat, the Natural Resource Governance Institute (NRGI) and Transparency International’s Accountable Mining Programme have jointly developed new analyses and tools to support EITI implementing countries in using the EITI to mitigate corruption risks.
The new resources were recently presented at a virtual event, where EITI country-level multi-stakeholder groups (MSGs) were invited to discuss opportunities and support needs for advancing anti-corruption efforts. Here are five key takeaways:
1. Anti-corruption work is high priority
There is a high level of interest among MSG stakeholders for the EITI to contribute more to anti-corruption efforts in implementing countries. The event was attended by almost 100 participants from 25 countries, demonstrating broad recognition of the importance of the fight against corruption in the extractives sector – particularly considering the impacts of the COVID-19 pandemic on the industry and the growing urgency of energy transition.
2. The EITI is a good platform for mitigating corruption risks
Some EITI implementing countries have already been actively using the EITI framework to support their anti-corruption efforts – although there is a general acknowledgement that more can be done. Examples from Argentina, Ukraine and Mauritania presented during the event demonstrated this. Participants agreed that EITI MSGs could contribute more to anti-corruption by identifying recommendations for relevant reforms, improving transparency around potential risk areas, and helping extractives and anti-corruption experts to work together. By building on existing initiatives and reforms related to anti-corruption efforts, the EITI can increase its likelihood of success and impact.
3. There are clear priorities for anti-corruption work
Corruption risks exist along the whole value and decision chain of extractives, but there are some clear emerging priority areas for action. MSG representatives highlighted opportunities related to public officials holding interests in the industry (beneficial ownership transparency), agreements and licensing of extractive projects (contract transparency), and subcontracting and procurement.
When they are opaque, ownership structures and contracts related to extractive projects can be high-risk areas for corruption. State-owned enterprises and tax regimes can also raise red flags when governance structures are weak. The EITI Standard includes requirements to disclose information in these areas, reducing potential avenues for illicit practices. Yet some MSGs have identified subcontracting as a high-risk area for corruption and a blind spot in EITI reporting, underscoring the need for more disclosure in this space.
4. Mitigating corruption is no easy feat
Many stakeholders are keen to use the EITI in the fight against corruption, but also recognise the obstacles and challenges ahead. In some countries, anti-corruption is still perceived to be too politically sensitive. There is a common understanding that the EITI is not involved in law enforcement or investigation of corruption cases; but a number of stakeholders have expressed concern around the EITI’s role in anti-corruption, citing the absence of a clear mandate to work on the issue.