What is EITI?

1. What is EITI?

2. Extractive Industries Transparency Initiative • A global initiative to increase transparency of mining revenues and expenditure • Launched in 2002 at World Summit on Sustainable Development • Sponsored by DFID and World Bank • 22 countries including Peru have committed to EITI principles

3. Extractive Industries Transparency Initiative • Captures and publishes data on payments made by companies to governments, and revenues received by governments from companies • Multi-stakeholder initiative • Ensures all stakeholders consulted on how revenues used

4. Extractive Industries Transparency Initiative – the process • SIGN UP – government makes public statement, stakeholders identified, initiating conference held • SET UP - multi stakeholder committee and agree workplan and basic procedures • PROCESS DEVELOPMENT – technical needs identified, independent auditor selected

5. Extractive Industries Transparency Initiative – the process (cont.) • DISCLOSURE & PUBLICATION – design reporting template, data submitted to auditor • PUBLIC DISSEMINATION – EITI report published, discrepancies identified, auditor recommends improvements, stakeholders review data • REVIEW – review process, make improvements, review workplan, continue regular reporting

6. Is EITI important?WHY?

7. Is EITI important? Why? Over 50 developing countries have significant extractive industries – 3.5 billion people in total Revenues from oil and gas and mining should be engine for growth and development Often the opposite is the case In many cases a close correlation between natural resources and poverty and inequality of income

8. Is EITI important? Why? Increases accountability Reduces risk of diversion or misappropriation of resources Empowers different stakeholders Holds governments to account Makes it more difficult to divert funds from sustainable development Improves business environment, helping countries to attract FDI Companies able to demonstrate how much they contribute to economy

9. How is Peru doing?

10. Source: DFID

11. Kazakhstan (June 2005) • October-December 2005 – MoU signed by Government, Industry and Civil Society • April 2006 – Agreed process to select auditor • Coordinating Committee formed – first report due late 2006

12. Guinea (March 2005) • June 2005 – Implementation Committee formed • July 2005 – three subcommittees and Technical Secretariat formed; timetable established • 2005 & 2006 – capacity building in key institutions carried out

13. Guinea (cont.) • Late 2005 – reporting template designed; review of non-audited data began • October 2006 – Selection of auditor underway • Now – Communication strategy to civil society planned

14. Mauritania (September 2005) • November 2005 – First EITI mission to identify Stakeholders • January 2006 – National EITI Committee formed • January 2006 – 2nd EITI mission to discuss roadmap for implementation • May 2006 – Stakeholder workshop held

15. Nigeria (June 2003) • April 2006 – First auditor reports for 1999 – 2004 published. Weaknesses in transparency, accounting and management identified, recommnedations made • Audits for 2005 and Q1 2006 due. • January 2006 – legislation proposed to make annual audits mandatory for EI companies • Three EITI roadshows held, two more planned • Training planned for govt, civil society on role of EITI

16. Peru (May 2005) • Jun 2005 – Action Plan adopted and published • Oct 2005 – MoU signed between World Bank and Peruvian govt for implementation of EITI • May 2006 – Supreme Decree approving Action Plan and creating working committee. Appointment of working committee and EITI implementation to begin ‘within weeks’ • Oct 2006 –All stakeholders identified • Implementation?

17. Summary: Could do better

18. More information: • www.eitransparency.org • www.minem.gob.pe/eiti • eiti@dfid.gov.uk

19. Nicola Ware Head of UK Trade & Investment British Embassy Lima nicola.ware@fco.gov.uk