Promoting fairness in the mining industry


 

The fight for fairness

 

Kai Whiting on the Extractive Industries Transparency Initiative, which aims to promote fairness in the mining industry.

 

 The Extractive Industries Transparency Initiative (EITI) works by establishing a participatory and collaborative approach between the government, the private sector and civil society organisations. It aims to promote a fairer, more transparent accounting of mineral resources.

This is particularly important in the 21st century, as we use ever scarcer mineral capital to drive our economies and build our societies. 

 
Compliance with the standard requires the production of comprehensive and independently audited EITI reports that include full government disclosure of extractive industry revenues and all material payments paid to the State by oil, gas and mining companies. These payments are disclosed in an annual EITI Report (see all EITI Reports).
 

What it can achieve?

The EITI is not, unfortunately, a “fix-all” solution. It cannot stop conflict overnight, nor right all the wrongs done to mining communities, but it is starting to have an impact. The publication of accounts and the transfer of funds, in the form of royalties, from a mining or hydrocarbon company to the State, along with public access to contract information means that it is now much more difficult for individual politicians to receive money in the form of bribes or to divert funds.

Any illegal activity becomes apparent by comparing the amount given by a company to the State and the amount that was received. Thus, whilst the EITI cannot stop corruption it does shine a light on it and makes it harder for those involved to continue to get away with it. Greater scrutiny of accounts and behaviour also helps to stop conflict between the government, corporations and mining communities, as the EITI provides a platform for dialogue, research and working relationships built on trust and mutual benefit.

Through the collective input of the various civil society, academic, government and corporate actors who are involved in the process, synergy is generated, knowledge is shared and analysis undertaken. This helps governments to develop capacity, transform communications and construct the necessary credibility with which to deal with an entangled web of problems.


The Colombian experience

In Colombia, one of its big successes is informed debate and the framework for sustainable policy, practices and grassroots empowerment that the EITI has generated. It represents one of the few processes that value participation across the social spectrum and professions. Where else would the government tax office and the national hydrocarbon agency sit at a table with academics, community leaders and aid workers to thrash out some of the key issues detrimental to social and environmental justice, not to mention the country’s development?

Transparency may not occur overnight, but the EITI does bring with it an expectancy that each subsequent transaction will be fairer and more considerate towards the environment and those who, historically, have been silenced. One of the most important discussions during the EITI Colombia committee meetings was about the need to make environmental documents, such as licenses, impact assessments and corporate reporting, more accessible.

While not all the demands included in the Colombian enhancements of the EITI standard were agreed upon, the Government committed itself to explore all means by which companies could improve the reporting of those funds directed towards environmental and community projects.

So while an EITI member country may not carry the same stamp as say that of the Soil Association, it does come with a guarantee that there are people, many of them professionals and community workers, who are willing to devote their skills and time in order to see a more promising future for those affected by the activities of the extractive sector.

Colombia’s internationally awarded status as an EITI candidate proves that together we can, and are, closing the knowledge and policy gaps that allow the propagation of poverty, community exploitation and an uneven playing field. In short, we are building an ethical tool that supports, if not leads the way, in the fight for fairness.

 

Kai Whiting
is director of the energy engineering undergraduate programme at Universidad EAN in Bogotá, Colombia. He joined the EITI Colombia Civil Society Board and Technical Support Group in May. Follow him on Twitter: @KaiWhiting