Britain to take part in the Extractive Industry Transparency Initiative (EITI)

Do what you preach. Britain to lead the way towards transparency in oil and gas industry.

Britain is seeking to improve the governance of its natural resources exploitation and it aims at complying by the end of 2014 with the revenue reporting standards set by the Extractive Industries Transparency Initiative (EITI).

Prime Minister David Cameron announced his decision at the last G20 and yesterday the stakeholders in charge of the project held their first meeting.

Led by the Department for Business, this group includes members of the Department of Energy and HMRC representing the government, companies like Shell and BP speaking for the extractive industry and organisations like Transparency International UK acting as watchdogs on behalf of the public.


The multi-stakeholder group met for the first time yesterday.
Photo credit: Department for Business, Innovation & Skills

Tony Blair originally promoted this international project in 2002 as a tool to tackle corruption in developing countries. The aim was to break what is often considered the “curse” of those economies that struggle to achieve sustainable growth despite being blessed by an abundance of natural resources.

By joining the project, Britain shows that it is committed to doing what it preaches and sets the good example.

This “will give both Britain and EITI more credibility”, says Miles Litvinoff, UK coordinator of Publish What You Pay (PWYP), one of the organisations that sits at the table to represent the civil society.

Although Britain’s record with transparency and corruption is positive, the EITI provides a good opportunity for a dialogue between the stakeholders, allowing them to sit together and work collaboratively to achieve the best governance of the sector.

A representative from Shell, who sits in the Multi-Stakeholders Group as part of the oil industry, says that members discuss numbers and prepare reports to explain numbers to the people. “There is a very collaborative environment. In the UK EITI is mainly about the debate”. He also suggests this is an opportunity to show the industry’s social responsibility to the public and discuss about how the UK will deal with reduced tax income when resources in the North Sea will run out in 20 years’ time.

Joseph Williams, senior advocacy officer at PWYP, shares the same view: “EITI is not only about transparency and accountability. It provides a shared platform for discussion. It can help people undertaking an informed debate, for example about fracking”.

To comply with EITI standards, the government and the companies must publish a joint report that would disclose and reconcile the amount of taxes respectively received and paid by the two sides. By exposing any discrepancy in these figures the report will improve transparency and highlight possible illegal deals.

Governments will also be held accountable towards their citizens becauser the watchdogs will ensure that taxes paid by the industry translate into investments and economic growth for the population.

Adhesion to the standards is currently voluntary but a law on mandatory disclosure of revenues has already been approved at EU level. As our Shell representative put it: “We expect that by the time this law is implemented domestically, the UK will be compliant with EITI standards. Britain has to do it one way or another. And this [initiative] has a good framework around it”.


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