EITI claims good progress in extractive industries’ transparency & disclosures in 29 nations; laggard Ethiopia not one of them

11 Jun

By Keffyalew Gebremedhin – The Ethiopia Observatory (TEO)

The Extractive Industries Transparency Initiative (EITI) is seen bubbly this time around. It is because of what the progress it has seen in member states transparency and reporting, as presented in its 2014 report, which it says is a “more complete account of the extractive industries” in its member states.

The report covers the activities for the year 2013. This is considered to be in line with the 12 EITI principles, the core of which is affirmation by governments, civil society and companies to ensure “that management of natural resource wealth for the benefit of a country’s citizens is in the domain of sovereign governments to be exercised in the interests of their national development.”

EITI has now presented 29 reports, published since the introduction of improved disclosure procedures. The highlights of its latest report, according to EITI, include:

Courtesy of EITI publication

Courtesy of EITI publication


      * For the first time, all reports disclose disaggregated revenue figures, broken down by the individual companies and revenue streams. Four countries provide data on a project by project.

      * Ten countries have started to disclose ‘beneficial ownership’ information, showing the real owners of the extractive companies operating in the country.

      * Nine countries disclose data in an electronic format. This enables further scrutiny and use of the data.

      *​ Almost all countries now publish data about production and licensing.

Unfortunately, some countries are included as EITI members for political reasons, under pressure by some Western countries – example Ethiopia. Therefore, it is not surprising that such countries have not and could not fulfil the requirements.

This important initiative is aimed to serve as a system of oversight by multi-stakeholder group (states, civil society and companies). This works both at national and international levels.

At the international level, there is the EITI. At the national level, member governments are required to work with civil society and companies by establishing a multi-stakeholder group to oversee implementation of their EITI pledge.

The original idea of the Initiative assumes success being predicated on principles of good governance and standards that require uninhibited participation of all actors in the processes. This helps achieve full transparency and disclosures.

Not surprisingly, missing in the above much lauded reports of 29 member states is Ethiopia’s. EITI says Ethiopia will report later in 2015.

We had already anticipated this situation, given that Ethiopia is a country where the media is repressed and cowered into submission, as a top journalists imprisoning nation; bona fide civil society organizations are nonexistent. This we had stated time and again, as we objected approval of Ethiopia’s application to EITI.

On March 19, 2014, this blog explained its concerns in its article Clare Short carries the day for Ethiopia at EITI – woe unto the Initiative’s future & poor Africans. In that article, TEO stated what we knew like the palm of our hands.

TEO observed:

    “Ethiopia’s Minister of Mines Tolesa Shagi has written to the Board, announcing the repressive TPLF regime’s commitment “to work with Civil Societies to ensure their engagement in the Ethiopian EITI”. For sure, Ethiopians have known the TPLF regime for the past 23 years and nothing of the sort the minister claims has been seen in its credentials.”

Ethiopia’s first report to EITI was returned, since it was incomplete. Members were told at the time that a revised report on revenue transparency reconciliation would be submitted for 2009-2010, about which nothing has been heard since.

Recall that the extractive industries is one economic activity area for Ethiopia, which over time has seen expansion, especially in Afar, Benishangul-Gumuz, SNNPR and Ogaden. Only looking at the nine-month export report, we note that Ethiopia has suffered 19 percent loss in 2015 gold trade. As usual, it could be explained away attributing it to all sorts of factors, such as market price, labor problems or this and that, without even mentioning the element of corruption or capital flight.

Recall again that, the year Ethiopia’s application for EITI was approved, the Kofi Annan chaired Africa Progress Panel wrote:

    “Billions and billions of dollars are leaving Africa. We calculated, with the help of Global Financial Integrity, that there was US$38bn leaving Africa every year… [through] trade mispricing, where you undervalue the prices of your imports and exports so you don’t have to pay the appropriate amount of tax.”

Thus far, EITI has published revenue reports of 38 member countries.  

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