whether deals are good, whether tax regimes are right, whether money is going missing and how it is spent. Whilst the minimum requirements are focused, the implementation clearly does not need to be. How the EITI evolves depends on what consensus can be gained at what time. The consensus about revenue transparency in the extractives sector is changing particularly fast at the moment and there are a number of complementary efforts in train. In 2011, the musician and activist, Bono, went so far as to say that natural resource transparency is the ‘next big thing’ in development – bigger than debt cancellation.11 Since then, the US government has issued disclosure requirements for extractive companies listed in the US under section 1504 of the Dodd-Frank Act.12 Changes to the EU transparency directive are being drafted to bring about similar rules in Europe.13 Designed, as they are, to be complementary to the EITI, these requirements will increase the clamour for fairer rules for all companies, whether listed, private or state-owned. US listed companies are expected to respond to section 1504 by pushing recalcitrant countries to implement the EITI to ensure a level playing field. Those people who want section 1504 to succeed are the same as those who want the EITI to succeed. The EITI and section 1504 are not in an ‘either/or’ relationship. There is no beauty contest. Whilst section 1504 will lead to more information being available, the EITI will ensure it is discussed in the countries that have the resources. Good management of natural resources needs both and more. Avoiding having the standard used as whitewash In accommodating wider demands and challenges, the EITI needs to be conscious of its credibility as a minimum standard. Some of the worst offending countries are implementing the standard successfully; others remain completely outside the process. The EITI cannot magically create political will for reform in countries where there is none. Moreover, assessing real political will is a perennial challenge for development initiatives, as is finding the balance between encouraging and keeping difficult countries inside the tent, and throwing them out. In attempting to resolve these conundrums, the EITI needs to note two specific points. Firstly, the EITI is not just implemented by government: it is also implemented by civil society organisations and companies. Often where the regime is repressive and kleptocratic, the EITI is the only platform available for dialogue or reform efforts among other actors. Secondly, due to the nature of natural resources, these EITI member countries are, on the whole, countries in which conventional aid instruments do not succeed – aid flows simply do not match up to the revenues from extractive resources. There is a growing B e y o n d g o v e r nme n t s school of thought that codes and standards, like the Natural Resource Charter and the EITI, and wider innovative governance efforts, like the Open Government Partnership, coupled as they are with peer pressure, are the best mechanisms available for nurturing political will for reform. Even a minimal EITI report can highlight important issues nationally and internationally. The EITI’s 2008/09 report on the Democratic Republic of Congo (DRC) certainly shocked some readers by revealing that the DRC Government received less than $200 million for its mining resources over two years14. That is less than $1 per person per year for resources that are linked to the deaths of over five million people. Increasing the impact It would be naïve to think that the simple act of publishing data would always and sustainably improve management, just as it would be naïve to think that platforms for dialogue will always sustainably improve management if not informed by good data. Despite strong anecdotal evidence of its success, the EITI suffers from the same challenge as most governance measures – how to establish whether it really does lead to better natural resource governance, less corruption, more accountability and, ultimately, to more citizens in more resource-rich countries reaping more benefits from their wealth. This information gap is somewhat exacerbated by the challenge the multi-stakeholder approach brings to the EITI: the actors behind the EITI do not always share a vision and common purpose. Scanteam was commissioned to evaluate the impact of the EITI in October 201015. While it applauded the EITI’s great success in building a brand and a global coalition for improving transparency in an opaque sector, it could discern little impact at the societal level in implementing countries. Moreover, the EITI principles established back in 2003 were not necessarily fulfilled by the EITI criteria and minimum requirements. Under the 2011 standard, EITI reports tell citizens what was paid. In most cases, they also say how much was paid by each sector or each company. However, the reports could go further and, in fact, stakeholders are demanding more from the EITI. Some argue that the EITI reports could inform citizens more about how much should have been paid (and whether that represents a good deal) or how the money was managed (and whether it was properly spent for the benefit of the people). Others argue that the reports should inform the analysis of tax management and regimes, the economic consequences of commodity price fluctuations and/or the exhaustion of non-renewable resources. Whatever the future EITI framework looks like, it will likely need to reflect the three changes to the EITI concept over the past decade. Particularly, it will have to ensure that: Commonwealth Governance Handbook 2013/14 105
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