In October 2006, the Bank endorsed the Extractive Industries Transparency Initiative (EITI). Since then, the Bank has adopted a multi-facetted approach to the engagement of its Regional Member Countries (RMCs) on the EITI. In so doing, the Bank seeks to:
- Encourage resource rich RMCs to participate in the EITI process;
- Provide technical and financial assistance to RMCs which have embarked upon the EITI process but which lack the human, financial and institutional capacity for its implementation.
The Bank’s support for EITI should be seen in a broader context of an ongoing country-owned process for greater transparency and better governance. Adhesion to EITI is one of the key results indicators under the ADF-XI Results Framework in the area of governance and transparency.
Furthermore, the High Level Panel recommended Bank’s increased support to strengthening governance and transparency in natural resource management to help RMCs better manage their own public resources for reducing poverty.
The Extractive Industries Transparency Initiative (EITI) aims to promote governance by strengthening transparency in the extractive industries. Revenues from the extractive industries should be an important source of economic growth and social development in developing countries.
Paradoxically, however, the lack of transparency in the management of these resources has often led to conflict, corruption and poverty. The EITI seeks to address some of these challenges.
In so doing, the EITI provides a number of benefits to various stakeholders. For example, for Governments engaged in the EITI process, it improves international credibility and emphasizes the Government’s commitment to the fight against corruption. For the private sector, a commitment to the principles of EITI signifies a commitment to good governance and transparency which in turn creates an improved investment climate.
The Bank is working to mainstream EITI principles in its own sector operations. Through encouraging regional member countries to take part in the EITI process and by offering technical and financial assistance where applicable, the Bank’s support will help bring about sound extractive industry practices and the utilization of natural resources for sustainable development.
To date, the Bank has contributed to the achievement of EITI candidacy status of three countries namely Central Africa Republic, Liberia and Madagascar and is supporting various African countries adhere to and implement the initiative. These include Liberia, Sierra Leone, Chad, Togo, Guinea Conakry, and Madagascar.
In addition, with the Bank’s support, Liberia became the first African country and the second country in the world to be designated as EITI compliant, setting an exemplary benchmark to other African countries, and evidence of the importance of the Bank’s support to economic and financial governance reform in Africa.
In 2010, the Bank will continue to provide funding for: EITI implementation through the establishment of national EITI Secretariats; the implementation of country work-plans; the conduct of audits and validations; and providing capacity building and technical support for RMCs which are moving on to the compliant stage.
Furthermore, the Bank will continue to adopt a comprehensive approach to EITI by engaging multiple stakeholders, for example civil society organizations, governments, private sector companies and civil servants alike, in the EITI process.
Beyond its work on EITI, the Bank will continue to mainstream extractive industry governance in its operations and strengthen its support to institutional reforms for extractive industry sector development.
In June 2009, the Bank launched the Africa Legal Support Facility which seeks to provide legal assistance to RMCs to negotiate complex extractive resource contracts.
More Information: http://www.eiti.org/