Transparency of revenues generated from oil, gas and mining should be applied in G8 countries and Iraq, says TI

Transparency International welcomes G8 summit Declaration on Corruption and UK government’s Extractive Industries Transparency Initiative

"The G8 governments, several of which are either 'home countries' or 'host countries' to extractive industry companies, should take the lead in applying the transparency of revenues to their own natural resource revenue flows," said Peter Eigen, Chairman of Transparency International (TI), the world's leading non-governmental organisation engaged in the fight against corruption.

"The reconstruction of the Iraqi oil industry provides an opportunity for the US and UK governments to demonstrate their commitment to the transparency of oil revenues," said Eigen, speaking ahead of today's meeting in London of the Extractive Industries Transparency Initiative (EITI).

"It is imperative to redress the paradox whereby a great wealth of natural resources coexists with great poverty, while corrupt elites grow rich in the same country," said David J. Murray, Deputy Chairman of Transparency International (UK). "It is now recognised by an increasing number of stakeholders that the transparency of revenues generated from the oil, gas and mining industries has become a prerequisite for equitable economic and social development in many resource-rich countries."

TI welcomed the initiative of the UK government in bringing together representatives of governments, industry and civil society, and in searching for countries willing to pilot the EITI process being developed. TI also welcomed the G8 Declaration on Fighting Corruption and Improving Transparency, issued after the G8 summit in Evian, France, on 1-3 June 2003. The G8 countries pledged to encourage governments and companies to disclose their revenue flows and payments, and to work with participating governments to achieve high standards of transparent public revenue management.

"The reconstruction of the oil industry of Iraq provides an opportunity for the US and UK governments to demonstrate commitment to transparency in keeping with the philosophy underlying this initiative and the related paragraphs of the G8 Declaration, both as to flows of revenue into the Development Fund for Iraq and also its allocation and use," argues TI in a statement issued to today's EITI meeting.

While TI acknowledges that the voluntary approach to transparency of revenues begun by the UK government may be successful where there is an existing commitment to integrity and transparency, a mandatory approach will be the only one that can succeed in the majority of situations. TI calls on the EITI stakeholders' meeting "not to exclude the mandatory approach as a future option". TI also warned against "extreme secrecy clauses" that could be used to block complete disclosure and lead to both companies and governments claiming to have complied with the principles of the initiative whilst actually disclosing only small proportions of total revenue.

TI called on the World Bank and the International Monetary Fund to demonstrate their commitment to transparency of revenues by allocating adequate budgetary resources to ensure that technical support can be provided over the coming years. TI is also calling for effective civil society monitoring mechanisms to be put in place at country level - as a way of ensuring that the people of a country are directly involved in protecting the interests of the poor in their own country.

TI looks forward to continued involvement in the EITI initiative, and expressed "our appreciation of the efforts of the UK government and all who have been closely involved in taking this initiative forward. We wish it success and reaffirm our commitment to helping wherever possible to make it effective."

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