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How Can Anticorruption Actors Use EITI Disclosures? (PDF 10.63 MB)
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Corruption in the extractive industries represents one of the main obstacles to ensuring that natural resources contribute to sustainable development. The heightened corruption risks across the sector are well documented, with many of the most prominent global corruption cases in recent years involving actors in oil, gas and mining.
High-profile corruption scandals have occurred in several EITI countries. In Colombia, a former EITI supporting company has faced investigations over alleged illegal political campaign financing. Two large oil companies and their executives face criminal trial in Italy over a controversial oil deal in Nigeria. In Iraq, a “fixer” company bribed officials to help its clients secure oil industry contracts.
EITI reports are silent on these and many other alleged cases of corruption. This has raised critical questions, particularly among civil society actors and academics, about the relevance of EITI in addressing the sector’s most pressing challenges. Although EITI reports rarely speak directly about corruption, they are nevertheless an important resource for anticorruption actors.
As the EITI considers how it can more effectively play a role in addressing corruption, the authors of this report aim to shed light on how EITI’s current reporting can help oversight actors understand and address corruption risks. The authors identify best practices in how EITI countries disclose corruption-related information, highlighting the strengths and weaknesses of the initiative and providing insights that can help EITI maximize its relevance to future anticorruption efforts. Based on a review of EITI documents from 17 countries, the authors identify trends in how reporting presents corruption-related information. Specifically, the authors analyze the extent to which it:
Key messages:
Corruption in the extractive industries represents one of the main obstacles to ensuring that natural resources contribute to sustainable development. The heightened corruption risks across the sector are well documented, with many of the most prominent global corruption cases in recent years involving actors in oil, gas and mining.
High-profile corruption scandals have occurred in several EITI countries. In Colombia, a former EITI supporting company has faced investigations over alleged illegal political campaign financing. Two large oil companies and their executives face criminal trial in Italy over a controversial oil deal in Nigeria. In Iraq, a “fixer” company bribed officials to help its clients secure oil industry contracts.
EITI reports are silent on these and many other alleged cases of corruption. This has raised critical questions, particularly among civil society actors and academics, about the relevance of EITI in addressing the sector’s most pressing challenges. Although EITI reports rarely speak directly about corruption, they are nevertheless an important resource for anticorruption actors.
As the EITI considers how it can more effectively play a role in addressing corruption, the authors of this report aim to shed light on how EITI’s current reporting can help oversight actors understand and address corruption risks. The authors identify best practices in how EITI countries disclose corruption-related information, highlighting the strengths and weaknesses of the initiative and providing insights that can help EITI maximize its relevance to future anticorruption efforts. Based on a review of EITI documents from 17 countries, the authors identify trends in how reporting presents corruption-related information. Specifically, the authors analyze the extent to which it:
- Builds a general understanding of a country’s anticorruption efforts
- Documents corruption cases
- Exposes suspicious practices
- Highlights vulnerabilities to corruption in institutions and processes
- Provides raw data and contextual information that can be used by anticorruption actors
Key messages:
- The persistence of extractive sector corruption in many countries that are implementing the Extractive Industries Transparency Initiative (EITI) has prompted questions around the EITI’s effectiveness.
- The EITI rarely documents corruption explicitly or exposes specific suspicious practices. Nonetheless, EITI reporting constitutes a valuable resource. It has repeatedly shed light on factors that increase vulnerability to corruption such as discretionary decision-making, deviations from the rules, and poor oversight. Efforts to implement EITI requirements often reduce such vulnerabilities even though they are not billed as “anticorruption” measures.
- EITI reports also include unique data and contextual information that anticorruption actors can use, especially on high corruption risk areas such as licensing and the finances of state-owned enterprise (SOEs). Emerging requirements around beneficial ownership (BO) and contract disclosure are particularly valuable.
- The strength of EITI reporting varies from country to country but in some instances, it has played an important role in the fight against corruption. By drawing on best practices from around the world, the EITI could build on this impact going forward.
