What is EITI?What is EITI?

• A global initiative to increase transparency of mining revenues and A global initiative to increase transparency of mining revenues and expenditureexpenditure

• Launched in 2002 at World Summit on Sustainable DevelopmentLaunched in 2002 at World Summit on Sustainable Development

• Sponsored by DFID and World Bank Sponsored by DFID and World Bank

• 22 countries including Peru have committed to EITI principles22 countries including Peru have committed to EITI principles

Extractive Industries Transparency InitiativeExtractive Industries Transparency Initiative

• Captures and publishes data on payments made by companies to Captures and publishes data on payments made by companies to governments, and revenues received by governments from governments, and revenues received by governments from companiescompanies

• Multi-stakeholder initiativeMulti-stakeholder initiative

• Ensures all stakeholders consulted on how revenues usedEnsures all stakeholders consulted on how revenues used

Extractive Industries Transparency InitiativeExtractive Industries Transparency Initiative

Extractive Industries Transparency Initiative Extractive Industries Transparency Initiative – the process – the process

• SIGN UP – government makes public statement, stakeholders SIGN UP – government makes public statement, stakeholders identified, initiating conference heldidentified, initiating conference held

• SET UP - multi stakeholder committee and agree workplan and SET UP - multi stakeholder committee and agree workplan and basic proceduresbasic procedures

• PROCESS DEVELOPMENT – technical needs identified, PROCESS DEVELOPMENT – technical needs identified, independent auditor selectedindependent auditor selected

Extractive Industries Transparency Initiative Extractive Industries Transparency Initiative – the process (cont.)– the process (cont.)

• DISCLOSURE & PUBLICATION – design reporting template, DISCLOSURE & PUBLICATION – design reporting template, data submitted to auditordata submitted to auditor

• PUBLIC DISSEMINATION – EITI report published, PUBLIC DISSEMINATION – EITI report published, discrepancies identified, auditor recommends improvements, discrepancies identified, auditor recommends improvements, stakeholders review datastakeholders review data

• REVIEW – review process, make improvements, review REVIEW – review process, make improvements, review workplan, continue regular reportingworkplan, continue regular reporting

Is EITI important?Is EITI important?WHY?WHY?

• Over 50 developing countries have significant extractive Over 50 developing countries have significant extractive industries – 3.5 billion people in total industries – 3.5 billion people in total

•Revenues from oil and gas and mining should be engine for Revenues from oil and gas and mining should be engine for growth and developmentgrowth and development

•Often the opposite is the caseOften the opposite is the case

• In many cases a close correlation between natural resources and In many cases a close correlation between natural resources and poverty and inequality of incomepoverty and inequality of income

Is EITI important? Why?

• Increases accountabilityIncreases accountability

• Reduces risk of diversion or misappropriation of resourcesReduces risk of diversion or misappropriation of resources

• Empowers different stakeholders Empowers different stakeholders

• Holds governments to accountHolds governments to account

• Makes it more difficult to divert funds from sustainable Makes it more difficult to divert funds from sustainable developmentdevelopment

• Improves business environment, helping countries to attract FDIImproves business environment, helping countries to attract FDI

• Companies able to demonstrate how much they contribute to Companies able to demonstrate how much they contribute to economyeconomy

Is EITI important? Why?

How is Peru doing?How is Peru doing?

EndorsementStakeholder Engagement

"Auditor" Apppointed

Report Published

Azerbaijan Jun-03 Yes Yes YesGhana Jun-03 Yes Yes

Nigeria Jun-03 Yes Yes YesTimor Leste Jun-03 YesCongo Rep Jun-04 YesKyrgystan Jun-04 Yes [Yes]Sao Tome & Pr Jun-04 YesSierra Leone Jun-04 StartingGabon Jul-04 Yes Yes [Yes]Equ. Guinea Sep-04 StartingCameroon Mar-05 Yes [Yes]DRC Mar-05 YesGuinea Mar-05 Yes Yes [Yes]Niger Mar-05 StartingPeru May-05 YesKazakhstan Jun-05 Yes YesMauritania Sep-05 Yes [Yes]Mongolia Dec-05 YesMali Aug-06 Starting

Source: DFID

Kazakhstan (June 2005)Kazakhstan (June 2005)

• October-December 2005 – MoU signed by Government, October-December 2005 – MoU signed by Government, Industry and Civil SocietyIndustry and Civil Society

• April 2006 – Agreed process to select auditor April 2006 – Agreed process to select auditor

• Coordinating Committee formed – first report due late Coordinating Committee formed – first report due late 20062006

Guinea (March 2005)Guinea (March 2005)

• June 2005 – Implementation Committee formedJune 2005 – Implementation Committee formed

• July 2005 – three subcommittees and Technical July 2005 – three subcommittees and Technical Secretariat formed; timetable establishedSecretariat formed; timetable established

• 2005 & 2006 – capacity building in key institutions 2005 & 2006 – capacity building in key institutions carried outcarried out

Guinea (cont.)Guinea (cont.)

• Late 2005 – reporting template designed; review of non-Late 2005 – reporting template designed; review of non-audited data beganaudited data began

• October 2006 – Selection of auditor underwayOctober 2006 – Selection of auditor underway

• Now – Communication strategy to civil society plannedNow – Communication strategy to civil society planned

Mauritania (September 2005)Mauritania (September 2005)

• November 2005 – First EITI mission to identify November 2005 – First EITI mission to identify StakeholdersStakeholders

• January 2006 – National EITI Committee formedJanuary 2006 – National EITI Committee formed• January 2006 – 2nd EITI mission to discuss roadmap for January 2006 – 2nd EITI mission to discuss roadmap for implementationimplementation

• May 2006 – Stakeholder workshop heldMay 2006 – Stakeholder workshop held

Nigeria (June 2003)Nigeria (June 2003)

• April 2006 – First auditor reports for 1999 – 2004 April 2006 – First auditor reports for 1999 – 2004 published. Weaknesses in transparency, accounting and published. Weaknesses in transparency, accounting and management identified, recommnedations mademanagement identified, recommnedations made

• Audits for 2005 and Q1 2006 due. Audits for 2005 and Q1 2006 due. • January 2006 – legislation proposed to make annual audits January 2006 – legislation proposed to make annual audits mandatory for EI companiesmandatory for EI companies

• Three EITI roadshows held, two more plannedThree EITI roadshows held, two more planned

•Training planned for govt, civil society on role of EITITraining planned for govt, civil society on role of EITI

Peru (May 2005)Peru (May 2005)

• Jun 2005 – Action Plan adopted and publishedJun 2005 – Action Plan adopted and published

• Oct 2005 – MoU signed between World Bank and Oct 2005 – MoU signed between World Bank and Peruvian govt for implementation of EITIPeruvian govt for implementation of EITI

• May 2006 – Supreme Decree approving Action Plan and May 2006 – Supreme Decree approving Action Plan and creating working committee. Appointment of working creating working committee. Appointment of working committee and EITI implementation to begin ‘within committee and EITI implementation to begin ‘within weeks’weeks’

• Oct 2006 –Oct 2006 – All stakeholders identifiedAll stakeholders identified

• Implementation?Implementation?

Summary: Could do betterSummary: Could do better

More informationMore information::

• www.eitransparency.orgwww.eitransparency.org

• www.minem.gob.pe/eitiwww.minem.gob.pe/eiti

• eiti@dfid.gov.ukeiti@dfid.gov.uk

Nicola WareNicola Ware

Head of UK Trade & InvestmentHead of UK Trade & Investment

British EmbassyBritish Embassy

LimaLima

nicola.ware@fco.gov.uknicola.ware@fco.gov.uk