EITI, Transparency in the Use of Natural Resources-by Anisa Deda

Our country is valued as a resource-rich country, in oil, gas and minerals. Natural resources can bring significant benefits to the quality of life for citizens and promote the country’s economic and sustainable development. Good governance of natural resources leads to increased income for the country, community development and enhancing well-being. There is no standard formula for successful management of natural resources, but transparency is essential, clearly integral.

Transparency in the management of natural resources is the underlying EITI principle.

EITI, the Extractive Industries Transparency Initiative is a global standard that promotes transparency, open and responsible management of natural resources. Each implementing country is supported by a coalition composed of government representatives, companies and civil society. EITI promotes transparency in government revenue accumulated by the extractive industry, including all parties, government, companies and civil society in the monitoring process. The experience of EITI implementing countries shows many country’s benefits from involvement in this initiative.

Transparency plays an important role for the government and the citizens to take advantage of the wealth of natural resources. The principle of making available and accessible information that is relevant, accurate and timely is always important in order to guide decision-making.

Transparency is important to the government as it places the country in an improvement of the investment climate and promotes greater economic and political stability.

In the Extractive Industry investments are intensive and in order to generate profits it is necessary long-term sustainability and transparency in the sector in the context of fair competition.

Benefits to society come from the increased amount of public information regarding the revenues that governments manage on behalf of citizens. Transparency enables citizens, especially residents of areas where industry is operating, to seek their rights, providing citizens with information basis for seeking fair use of income in order to improve their livelihoods.

As a result, transparency helps build trust among citizens, governments and investors.

EITI report provides an overview of oil, gas, mining and hydro-energy sectors, the revenues derived from the use of Natural Resources, enabling all citizens to have complete information on public revenues and expenditures, contributing this way to a public debate and in the creation of mechanisms for the proper administration of revenues for the benefit of communities.

The implementation of EITI has made a significant contribution to improving the governance of extractive sector in many implementing countries. Throughout the EITI reporting process, different countries have built up mechanisms for accessing information to be more transparent. Thus in Kazakhstan companies report online data for EITI and information can be accessed through country’s tax portal.

Mayors in Madagascar use EITI Reports to demand their share of revenues for local communities. Since 2011, mayors of mining-affected communities in Madagascar have been using EITI reporting to ensure that revenues owed to their local communities are effectively paid.

The United Kingdom has established the world’s largest national public register of beneficial ownership, or “persons of significant control”. This open and searchable register covers all sectors and has already been accessed more than 2 billion times. Making this information public has allowed UK civil society organizations to conduct their own assessments and flag mistakes to the authorities, thereby helping to improve data reliability.

Ukraine established the world’s first public beneficial ownership register of legal entities, as well as an asset register for government officials. In 2014, the government adopted legislation on beneficial ownership disclosures for all companies. Since then, about 70% of companies have reported their beneficial owners, including companies in the extractive industries. The data is publicly accessible through a unified company register hosted by the Ministry of Justice.

Albania as an EITI member country since 2013 has published the EITI report for eight fiscal years from 2009 to 2016. These reports provide an overview of activities in the oil, gas, mineral and hydro-energy sector, the reconciliation of main flows paid by licensed companies and collected from the government agencies in these sectors, the contribution of this industry to the State Budget and the economy in the country.

Through EITI reports, actually many information data on industry developments are publicly available and accessible to all. Currently, 63% of EITI implementing validated countries have disclosed full or partial information related to the award or transfer of licenses. These data are publicly accessible.

95% of EITI implementing validated countries have disclosed production data, and 84% ​​of validated countries have published export data for the fiscal year covered by EITI reporting.

67% of EITI implementing validated countries have published information on social spending by extractive companies and 100% of EITI validated countries have published information on the extractive sector’s contribution to the economy, including employment data and an assessment of informal sector activity. More than $ 110 billion of revenues disclosed through the EITI in 2017.

Currently, all EITI member countries are working on the declaration of Beneficiary Ownership, part of the EITI Standard, as well as some countries including Albania have also started reporting on Comodity Trading, and with the publication of this important information it is expected that the EITI will be at the forefront of many public debates.