Transparency International: EITI must reinforce anti-corruption provisions
As the Extractive Industries Transparency Initiative (EITI) board meets today in Buenos Aires, Transparency International urges them to reflect the critical importance of anti-corruption in the energy transition by strengthening the EITI standard accordingly.
This could not come at a more crucial time. Most minerals that are needed for the world to transition to sustainable energy are found in countries where corruption is endemic. This allows funds that could have been used for sustainable development to support populations in need to instead support corrupt activities – and even violence. The Democratic Republic of the Congo, for example, scores only 20 out of 100 on the Corruption Perceptions Index as corruption hampers the government's management of mining operations, allowing ongoing violent conflicts over the country’s mineral resources.
These risks run high across different extractive industries. While the world is turning away from fossil fuels, there are growing risks in markets for minerals such as copper, lithium and cobalt, which are needed for the energy transition.
Delia Ferreira Rubio, chair of Transparency International, said:
“The EITI, as a global initiative that stands for 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 set up beneficial ownership registers with strong verification mechanisms as well as comprehensive integrity screening 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 extracting countries.”
The EITI board should strengthen the EITI standard to require that implementing countries set up verification mechanisms ensuring the beneficial ownership information provided by mining, oil and gas corporations is accurate and up to date. It should also broaden the scope of information that companies have to disclose to include the full ownership structure. In addition, the report should highlight any connection from companies to licensing authorities.
The EITI must also support and extend capacity-building measures within the multi-stakeholder groups to enable civil society actors and government representatives to understand, use and verify beneficial ownership data. EITI reports lack intelligibility for the public because they are highly technical. The EITI must implement a new communication and knowledge-centred approach if it is to fulfil its mission to strengthen public and corporate governance and accountability and inform policymaking in the extractive sector.