The board of the Extractive Industries Transparency Initiative (EITI) will meet on March 1-2, 2023 in Buenos Aires. While this meeting is taking place, Transparency International invites to reflect the importance of the fight against corruption for the energy transition and in this sense to strengthen the EITI standard.
This could not come at a more crucial time. Most of the minerals needed for the world to transition to sustainable energy are found in countries where corruption is endemic. This allows funds that could be used for sustainable development and support populations in need to be used instead to favor corrupt activities and even violence. The Democratic Republic of Congo, for example, has scored 20 out of 100 on the Corruption Perceptions Index, as corruption hinders the government’s management of mining operations, allowing violent conflict over the country’s mineral resources.
These risks are high in the different sectors of the extractive industries. As the world moves away from fossil fuels, there are growing risks in the markets for minerals such as copper, lithium and cobalt, which are necessary for the energy transition.
Delia Ferreira Rubio, chair of Transparency International, said:
“The EITI, as a global initiative representing transparency and civil society participation in the often opaque and corruption-prone extractive sector, can play a leading role in both the fight against corruption and for a just energy transition. Unfortunately, the current standard is insufficient. We call on the initiative to strengthen its anti-corruption provisions, particularly by requiring implementing countries to establish beneficial ownership registries with robust verification mechanisms, as well as comprehensive integrity control measures during the licensing process. The EITI must ensure that the climate transition does not come at the expense of democracy, the environment and human rights in extractive countries.”
The EITI Board should strengthen the EITI Standard to require implementing countries to establish verification mechanisms to ensure that beneficial ownership information provided by mining, oil and gas corporations is accurate and up to date. Also expand the scope of information that companies must disclose to include the ownership structure in a comprehensive manner. In addition, the report should highlight
any connection of the companies with the licensing authorities.
EITI should also support and expand capacity building measures within multi-stakeholder groups to enable civil society actors and government representatives to understand, use and verify beneficial ownership data. EITI reports lack intelligibility to the public because they are highly technical. The EITI must implement a new approach focused on communication and knowledge if it is to fulfill its mission of strengthening public and corporate governance and accountability and informing policymaking in the extractive sector.
