Governance and corruption in the management of natural resources. What does The Extractive Industries Transparency Initiative (EITI) propose?

The Extractive Industries Transparency Initiative–EITI–, is an international agreement whose state members voluntarily commit to regularly report information about the payments received from the oil, mining and other extractive companies operating in their territories. The agreement is based on the widely accepted assumption that higher levels of transparency lead to lower levels of corruption, or in other words, that if corrupt practices are brought to light, these will eventually disappear: “sunlight is the best disinfectant”[1].

To become EITI compliant, a country must first apply for Candidate status, which requires adopting a series of measures that, in terms of accountability, lead to a reduction of corrupt practices in the extractive sector. Colombia recently decided to accept this challenge as part of its strategy to consolidate the mining and energy sector as one of the drivers of the country’s development. This effort was mentioned as part of the government’s plan for the first time in the first presidential term of Juan Manuel Santos. According to the Minister of Mines and Energy, Tomás González, “it will improve Colombia’s governance and international credibility”^[2]. Colombia is one out of four Latin American countries that has committed to EITI so far. Peru and Guatemala are already compliant and Honduras has been a candidate since March 2014.

In the light of Colombia’s commitment to EITI it is a good time to ask what motivates governments to voluntarily put the management of their extractive industries under the scrutiny of its citizens and the international community, as well as look at the challenges and benefits that initiatives like EITI may bring with them on the national, regional and international level.

The implementation of EITI criteria is a challenge in terms of transparency, governance and accountability, and it certainly implies significant commitments for any nation aspiring to be considered compliant. Now, if you take into account the fact that most resource-rich countries –whose economies depend largely, if not exclusively, of extractive activities– are often also the ones with the highest perceived levels of corruption, it cannot be denied that joining agreements like EITI, entails comparatively higher costs for these nations as they face challenges on other multiple fronts (delegitimized institutions, disengaged citizens, limited territorial sovereignty, etc.) in the effort of assuring a successful implementation process.

Despite this reality, a growing number of less developed countries and economies in transition, like Colombia, are joining the agreement as a way to gain credibility and attract higher levels of foreign investment in their territories.

The process in Colombia is now in an intermediate stage and has already assembled a consolidated Multi-stakeholder Group which is accompanied by the Transparency in the Extractive Industries Civil Society Table, a space in which the Alliance for Responsible Mining participates. From now on, the task will be to monitor the process throughout the 22 months that the implementation will last, to determine whether the levels of corruption actually decrease. For this to happen, it is worth noting that it will require the commitment of both the government and its citizens and also of the companies in the sector, which have been historically suspicious of subjecting their operations to public scrutiny.