In many resource-rich countries, state-owned enterprises (SOEs) play a major role in collecting taxes and payments, selling oil, and contributing to government revenue from extractive industries. In the Middle East and North Africa (MENA) region, SOEs often control the end-to-end value chain of extraction.
This briefing explores how becoming an Extractive Industries Transparency Initiative (EITI) supporting company can facilitate transparency of SOEs from non-EITI implementing countries in the MENA region. The EITI is a global standard to promote the open and accountable management of extractive resources. Fifty-four countries currently implement the EITI and commit to a set of disclosures along the extractive industry value chain as defined in the EITI Standard.
Beyond national EITI implementation, extractive companies can become EITI supporting companies by committing to a set of expectations to advance sustainable development, transparent management of natural resources and by supporting the initiative financially.
In this briefing, the author has provided an overview of how becoming an EITI supporting company has supported Qatar Petroleum (QP) in improving reporting and transparency, with a view of providing relevant lessons to the EITI and other SOEs in the MENA region. The briefing concludes with recommendations to the EITI, QP and other SOEs in the MENA region.
QP is the first SOE from the MENA region to join the EITI as a supporting company.
The business case for SOEs to improve transparency and reporting practices is growing. Reporting serves to communicate SOEs’ roles as national champions, facilitates partnerships with international financiers and business partners and supports SOEs’ growing business activities outside of their home countries. With the energy transition and the recent coronavirus-related economic downturn, the need for transparency is gaining pace in the MENA region, where many governments depend on SOEs for revenues and investment in diversification and clean energy.
The EITI is a leading global standard to which SOEs can look for disclosure guidance. Becoming an EITI supporting company and meeting a set of expectations set for EITI supporting companies is a means for SOEs from non-EITI-implementing countries to demonstrate their commitment to transparency, and for the EITI to advance its mission outside implementing countries.
QP’s engagement with the EITI International Secretariat has helped the company to identify and prioritize relevant disclosures. Simultaneously, it has helped EITI to identify weaknesses in the process and content expectations for EITI supporting companies.
The EITI International Secretariat is currently considering options for improving its EITI supporting company expectations and developing an assessment approach. This is an opportunity to develop a more robust assessment mechanism, specify what adherence to each expectation looks like, broaden the scope of the expectations to address SOE-relevant disclosures including the energy transition and include an element of multi-stakeholder dialogue.
QP can continue to pioneer in transparency by providing further reporting in line with the broader set of disclosures outlined in the EITI Standard, the Resource Governance Index and other guidance.