Eye on Malawi’s EITI: Signing up to the Extractive Industries Transparency Initiative – Mining Review (January 2015)

The following piece “Eye on Malawi’s EITI: Signing up to the Extractive Industries Transparency Initiative”, written by Rachel Etter (who is also editor of http://www.mininginmalawi.com), was initially published in Malawi’s Mining Review Issue Number 21 2015 that is circulating this January 2015.

The full edition can be read here: Mining Review No. 21 January 2015.

To learn more about this monthly publication, edited by Marcel Chimwala, read the post about the “Voice of the mineral sector in Malawi”.

The EITI Standard (Image found in The EITI Standard, July 2013)

The EITI Standard (Image found in The EITI Standard, July 2013)

Eye on Malawi’s EITI Signing up to the Extractive Industries Transparency Initiative

By Rachel Etter

Editor of http://www.mininginmalawi.com

President Arthur Peter Mutharika, then newly elected, opened the 45th Session of Parliament in June 2014 with the announcement

 We will subscribe to the Extractive Industries Transparency Initiative (EITI).

His public statement revealed the government’s intention to sign up to the EITI although debate about the initiative has been going on since 2008 in Malawi.

Following the President’s address, the Minister of Natural Resources, Energy and Mining, Hon. Atupele Muluzi, publicly confirmed the government’s decision at the Africa Down Under Conference in Australia in September 2014. During the same month, civil society organisations launched the Publish What You Pay (PWYP) national coalition to coordinate their call for transparency and accountability in the extractive industries in Malawi.

Wealth from natural resources can and should contribute to economic and social wellbeing in a country. However, research in the 1990s and early 2000s indicated that instead of benefitting a country and its citizens, oil, gas and mining were often associated with conflict, corruption and growing inequality. This phenomenon was explored and described as the “resource curse” by Richard Auty in 1993. Transparency and dialogue were touted by researchers and practitioners as an entry point to start to combat the resource curse.

In response, the EITI and the PWYP campaign were founded. PWYP was formally launched in June 2002 in London by a small coalition of non-governmental organisations including Global Witness and Transparency International UK. The EITI was first announced three months later, in September 2002, at the World Summit for Sustainable Development in Johannesburg, South Africa by Tony Blair, then British Prime Minister, and the initial EITI Principles were agreed in 2003. The EITI grounds itself in the belief that a country’s natural resources should benefit all citizens and this demands high standards of transparency and accountability. Without openness about natural resources and associated revenues, the EITI argues that there is an increased risk of distrust, weak governance and conflict.

When a country joins the EITI it signs up to a minimum level of transparency in the reporting of natural resource revenues. This includes both company reporting of revenues paid and government reporting of receipts, as well as information on tax payments, licences, contracts and production. Through improving access to information, the national debate about the management and use of resource revenues is fostered and leaders can be held accountable for their decisions.

Governments implement the EITI Standard in collaboration with companies and civil society through a national multi-stakeholder group. Malawi’s EITI multi-stakeholder group will meet for the first time in early 2015 to determine how the EITI process will be implemented. It is responsible for maintaining a current workplan, which is fully costed and aligned with reporting and validation deadlines established by the EITI Board. To fulfill all of the sign-up requirements, the Malawian government must also appoint a senior individual to lead the implementation of the EITI.

Once these sign-up steps have been completed, Malawi will submit an EITI Candidate Application to the EITI Board. On approval, Malawi will be given EITI Candidate status. To move from candidacy to EITI compliant, it will have to meet the seven EITI Standard requirements within two and a half years and undergo validation. This includes submitting its first EITI report within 18 months. At present, there are 31 compliant countries, including all of Malawi’s neighbours; 17 countries are in the candidacy stage.

For EITI to benefit Malawi, engagement, dialogue and trust between stakeholders is critical. Thus, as Malawi journeys toward becoming an EITI Candidate and, later, EITI Compliant, “Eye on Malawi’s EITI” hopes to draw in a variety of stakeholders to write about the EITI’s relevance for Malawi and the PWYP campaign and to provide further information about the process to foster public understanding and debate.

We welcome your feedback.

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