In 2003, the ethos Investment Foundation joined a group of investors in a declaration to encourage companies in the oil and mining sectors to ensure greater transparency regarding revenues paid to governments for the mining of mineral resources (see news of 23 July 2003). This declaration followed the Extractive Industries Transparency Initiative (EITI) of Tony Blair’s government and which was discussed during the G8 in Evian in the Summer of 2003.
The EITI aims to develop an efficient system of disclosure of revenues paid by multinationals to governments to ensure that these same sums are found in the national accounts and do not feed corruption. This initiative is supported not only by investors, but also by numerous governments, national and private companies (i.e. BP, Shell, ExxonMobil, Total et Rio Tinto), as well as other important stakeholders such as the World Bank and the NGO Transparency International, which fights corruption.
The scale of the group of investors united around this environmental and social issue is unprecedented. Today it groups approximately 60 investors representing funds under management of USD 8'300 billion.
In March 2005, the British government organised in London the first international conference of the EITI to evaluate progress made since 2003. The conference was very successful with more than 300 delegates representing the different stakeholders of the initiative. It allowed for the strengthening of relations and validation of progress made. The following results of this conference are to be highlighted :
- The reaffirmed commitment of all the parties of the initiative.
- The publication of a guide for the application of the EITI principles for the attention of multinationals and governments (EITI Source Book).
- The presentation, by the government of Azerbaijan, of the first transparency report in the World emitted by a government on revenues received for the mining of mineral resources and on the progress made in the implementation of the EITI. This report is the result of an unprecedented collaboration between the government of Azerbaijan, the multinationals exploiting its territory and a coalition of 32 local NGOs. It is to be noted that this report is audited by Deloitte & Touche.
- Several additional countries have recently announced their support to the initiative, i.e. Bolivia,Equatorial Guinea and the Democratic Republic of Congo.
- An increase in the resources at disposal for putting in place the EITI (Great Britain, France, Norway, the United States of America, the IMF and the World Bank will notably increase the allocated resources). The British government continues to work as the international secretary of the EITI. It will work closely with the recently formed advisory group including representatives of the different partners of the initiative.
- As far as companies are concerned, the majority of companies of the extractive industry were represented. Several of them took the floor. BP in particular announced that it would publish data on its operations in Azerbaijan concerning the much debated oil pipeline BTC (Baku – Tbilisi – Cehan). It is not to be forgotten that this oil pipeline, of 1800 kilometers, links the Caspian Sea with the Mediterranean, crossing Azerbaijan, Georgia and Turkey (in particular the Kurd region) and that this has caused many problems with regard to human rights and the environment, regularly denounced by NGOs.
In view of the growing success of the initiative, the next international conference is already scheduled to take place in March 2006.
Caroline Schum
Senior Analyst
More information :
Caroline Schum, info@ethosfund.ch
The investors declaration (updated March 2005 in English) : pdf document
The EITI website : www.eitransparency.org
