The Extractive Industries Transparency Initiative (EITI) Standards Secretariat says that in the face of Covid-19, the need for attracting investment and maximising revenues from extractive resources for development will remain a high priority for resource-rich countries in 2021.
As a result, EITI in its 2021-2022 strategic framework, envisages six shifts in the extractive sector governance beyond the pandemic.
The first is the energy transition which will use data in the sector to inform public debate and policy decisions on transition.
Here, the EITI will support implementing countries and other stakeholders in building awareness of the transition to come by forging a greater partnership of key players.
The second is to address the risks caused by corruption in the extractive industry. Some countries such as Argentina, Ghana, Kyrgyz Republic, Madagascar and Mexico are already using EITI implementation to address corruption risks.
The United States recently approved legislation on defence spending that enshrines beneficial ownership transparency and in effect bans anonymous shell companies operating in the country.
The third shift is the mobilisation of domestic revenue by reducing opportunities for corruption. This is an enhancement of the 2019 EITI Standard that requires more detailed disclosures which will strengthen tax collection. Working with partners like the IMF, these requirements can help ensure that extractive revenues are maximised for public benefit rather than private gain.
The fourth shift is the transparent disclosure of information regarding the environmental, social and governance metrics, which will be used to assess performance.
The EITI recently launched guidelines on commodity trading transparency, that offer consistent disclosure of substantial and complex commodity trades, to enable progress towards a more transparent and accountable sector.
The fifth shift is open data, ensuring the data is accessible and usable through systematic disclosure.
Currently, around one-fifth of disclosures against the EITI Standard is reported at the source through government and company systems.
This shift encourages proactive disclosure of timely, usable and accessible data that inform decision making, foster independent analysis and promote public debate.
The final shift is measuring the EITI impact on sustaining funding for extractive governance, which yields long term benefits.
The EITI Board has endorsed the commissioning of an independent evaluation in 2021. A recent EITI survey revealed potential funding gaps of up to 40 per cent in 12 EITI countries.