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Research Report

EITI AND SUSTAINABLE DEVELOPMENT: Lessons and new challenges for the Caspian Region

Saule Ospanova
Ingilab Ahmadov
Emma Wilson
Copyright Date: Jan. 1, 2013
Pages: 32
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Table of Contents

  1. (pp. 2-3)

    Increasing demand for minerals and concerns about energy security are driving new exploration and production in oil, gas and mining. Many emerging economies see extractive industry development as a huge opportunity for improving living standards and the status and economic prospects of their country. But global experience shows that many resource-rich countries lack the strong institutions, accountability and enforcement mechanisms needed to ensure that natural resource wealth translates into tangible benefits for their citizens and ultimately contributes to sustainable development. Improving the transparency of payments made to governments by mining, oil and gas companies has been hailed as one way...

  2. (pp. 6-7)

    The Extractive Industries Transparency Initiative (EITI) is evolving amid lively debate around its future direction, both globally and within EITI Compliant and Candidate countries. Issues include: transparency of government—company contracts; reporting on a company-by-company and project-by-project basis rather than aggregated country reporting; and reporting of revenue expenditure at the sub-national level and throughout the value chain. An overarching concern is how to ensure that the energy, goodwill and technical rigour employed in implementing EITI can be leveraged for greater impact. Revenue transparency should ultimately lead to better sustainable development outcomes, including socio-economic development, poverty reduction and environmentally responsible extractive...

  3. (pp. 8-11)

    EITI is promoted as a global standard for managing revenues from natural resources with the aim of promoting revenue transparency in the extractive industries. It is driven by participating governments, companies, civil society groups, investors and international organisations. It is overseen in-country by a multi-stakeholder group of participants representing government, companies and national civil society. Globally it is overseen by the EITI Board, made up of government, companies and civil society representatives appointed at a global conference that takes place every two years. Supporting the Board, the EITI International Secretariat provides outreach, advocacy, information exchange and other services. A number...

  4. (pp. 12-15)

    As a pioneer EITI country, Azerbaijan has always attracted great interest from the international community and enjoys a positive reputation within the EITI ‘family’. The main motivation for Azerbaijan to join EITI was to project the image of a transparent government, as it was engaged in oil and gas business mostly with Western companies. The government is keen to retain its positive reputation and also appears interested in implementing wider reforms in the country. There is some frustration among NGOs, who would like to see faster change and do not entirely trust the government. However, they acknowledge that EITI has...

  5. (pp. 16-21)

    The Government of Kazakhstan signed up to EITI in 2005 for a variety of reasons. These include enhancing the reputation of the highly centralised resource-based country internationally, as well as addressing domestic pressures to increase public scrutiny of oil-revenue management. Following a period of difficulty in making progress with EITI implementation, it appears that the Kazakhstan government is now keen to overcome challenges and push to achieve Validation in 2013. CSOs continue to push to shape the agenda. There are some areas of dissatisfaction, though CSOs agree that efforts to promote EITI have, as in Azerbaijan, had a positive impact...

  6. (pp. 22-23)

    Turkmenistan has some of the richest hydrocarbon resources in the world. According to the BP Statistical Review, in 2011 Turkmenistan was fourth in the world for proven natural gas reserves after Russia, Iran and Qatar.22 At the same time, Turkmenistan is one of the least transparent countries in the world.

    With regard to transparency and the extractive industries, the situation in Turkmenistan is very different from that discussed in the other two countries considered in this paper. Turkmenistan has not joined EITI and is still some way from making that step. However, there are several indications that the country is...

  7. (pp. 24-27)

    EITI started as a technical initiative, developing standards and practices of transparency and accountability in the extractive sectors. A key tension in EITI evolution is that its goal to date has been transparency in and of itself, while CSOs and other parties have been pushing for EITI to address a much wider range of issues all along. However, this is a challenging process, since the initiative typically struggles with political, economic, legal and social sensitivities. There has been a learning curve in developing a participatory process, overcoming institutional barriers, generating political will and popularising the EITI mandate.

    The experience of...