EITI Business Guide

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CASE STUDY 2 In one country, where a state-owned company (SOC) did not see a clear need to join the EITI, the government department responsible for regulating the activities of SOCs was able to use its influence to encourage the company’s participation. In this case, the EITI was supported by the Prime Minister’s Office, which gave political impetus to calls for wider participation. 14 EITI BusInEss GuIdE 12 13 their involvement is among the most difficult to negotiate. For example, the company may be on both sides of the disclosure process if it receives payments or production share from other companies as an equity owner and government representative in a contract, and at the same time makes payments to national budgets. However, as with the private sector, state-owned companies also face local and international pressure to demonstrate social and environmental responsibility. Many of the issues raised above (see Question 2) will be of increasing relevance to state-owned companies as they grow in size and influence. For example, a state-owned company may be considering public stock flotation, and implementation of the EITI can bring international credibility in the eyes of investors. My company is not directly involved in resource extraction. What can my company do to support EITI implementation? although only oil, gas and mining companies make the direct payments to governments that are covered by the EITI requirements, many other companies are involved in the extraction process and will have a strong interest in the implementation of the EITI. such companies include: • Upstream service companies that provide hardware and logistics to help extract oil, gas and minerals. These companies have service agreements with the extractive companies and a strong interest in the stability and transparency of their operations. • Downstream manufacturing companies, such as steel and other industrial and commercial mineral manufacturers, which have supply agreements with the extractive sector. These companies want to ensure that their long-term contracts are on a sustainable footing. • Ancillary companies along the value chain, including logistics, human resources, information service, transportation, security, management, accountancy and auditing companies. These companies can support the EITI even though they are not required to publish payments to government. as well as supporting the EITI through making public statements of support on their website, they can negotiate EITI implementation as part of their service and supply contracts. These companies can also adhere to the transparency principles in all of their operations in-country and seek to undertake supportive measures for the sector, building on their own core business skills. Examples here include: • IT and accounting companies providing support for the production of the reporting templates; • management consulting companies offering support with government and civil society capacity building; and • oil service companies offering their hardware and manpower to provide other infrastructure to the government. What is ‘civil society’? Why are civil society organisations involved in the EITI? ‘civil society’ is a broad term encompassing all of a country’s social and civic organisations – such as development charities, academia, community groups,
“ Shell Gabon was pleased to support the initiation of EITI reporting in Gabon, which started in 2005. The development of a common framework by representatives of the oil industry, the Gabonese government, and civil society was a dynamic and fascinating process. The process has contributed to increased insight into the country’s income stream related to the oil and mining industry. We look forward to continuing our role in the EITI in country. Martijn Rutters, Finance Manager, Shell Gabon 14 women’s organisations, and faith-based organisations – that do not have commercial or governmental status. civil society organisations which promote transparency and accountability are particularly important in the context of the EITI, although a wider spectrum of civil society groups may be involved in the implementation process. civil society organisations play a crucial role in the EITI, including advocating sign-up, monitoring the implementation process and helping to ensure that EITI reports are widely understood. as part of EITI implementation, a company may be contacted by civil society groups with requests for information about the company’s involvement. While resource constraints may limit the amount of time that the company can dedicate to individual enquiries, companies can establish a clear line of communication for responding to requests for information. This can include a posting on the company website (although some civil society groups may rely on more traditional communication channels), and/or appointing a point person at the local chamber of commerce or multi-stakeholder group. What happens if civil society is not formally recognised by the government in this country? The EITI criteria (see Appendix 2) require that ‘civil society is actively engaged as a participant in the design, monitoring and evaluation of this process and contributes towards public debate’. companies can therefore argue for the government to involve civil society organisations as equal partners in the implementation process, and point out that their exclusion will jeopardise the country’s EITI compliance. EITI BusInEss GuIdE 15
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Page 6 and 7: Foreword by peter Eigen (Chairman,
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Page 22 and 23: CASE STUDY 6 In many EITI countries
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