Friday 28 November 2014

Germany extends extractives transparency by launching EITI

On Wednesday it was my pleasure to attend the launch event of D-EITI, the German Extractive Industries Transparency Initiative in Berlin.
Germany recently announced its intention to adopt EITI, as part of a wave of OECD countries moving to take their verbal support of this initiative for over 10 years, and put it into practice.

The event attracted a wide range of stakeholders and would appear to have set the stage for a strong, constructive multi-stakeholder process. I think there is going to be some interesting debate to be had about exactly what Germany is looking to achieve through EITI, and what D-EITI will look like. Indeed, the opinions presented throughout the event swung from initially conservative, through a wave of highly progressive enthusiasm, and back to some pragmatic and more realistic guidance.

After a welcome and scene-setter from Dr Wolfgang Scheremet of the Federal Ministry for Economic Affairs and Energy (BMWi), the event opened with Clare Short, Chair of the EITI Board giving a comprehensive history of EITI. As well as explaining the initial catalysts of the initiative, and acknowledging the contribution of Tony Blair in a way only Clare Short could, she set out some of the successes of EITI and some challenges for the multi-stakeholder group (“MSG”).

She identified two of the successes of EITI being:

  • Demands for transparency now being seen as normal; and
  • The great advantages for all stakeholders of having constructive engagement between the three constituencies represented in the MSG (government, business and civil society).

The three challenges put to D-EITI were:

  • To make EITI serve Germany, rather than just being a show of support for EITI in principle;
  • To drive transparency first, though open, transparency and robust systems, which then facilitate EITI transparency at the minimum incremental effort and cost; and
  • To ensure that the civil society representations are relevant to Germany, and not just the excellent contribution from PWYP.

It was then the turn of Uwe Beckmeyer of BMWi, the face (or as he preferred to put if the voice) of D-EITI. He set out his vision that Germany adopting EITI should act as an example to others, specifically calling on Brazil, South Africa and India to sign up. He clearly sees D-EITI as a political message to other countries to improve transparency and for Germany to be a role model internationally.

There were then presentations and a panel representing the MSG. It was at this point that a number of proposals going far beyond the current remit of EITI were floated. These ranged from extending D-EITI so as to cover tax payments made by German businesses around the world, not just in Germany (which sounds like the new EU Accounting and Transparency Directives than EITI), to extending transparency to the energy sector, renewables or even right throughout the supply chain. The suggestion was that D-EITI could be a progressive transparency regime going beyond the proposals being discussed internationally under other initiatives.

It was somewhat reassuring then to hear from Peter Eigen (former Chair of the EITI Board, and wise head on all things EITI) and Marinke van Riet (International Director, PWYP), both of whom congratulated Germany on embracing EITI, but advised caution and moderation.

Peter suggested the MSG should not move too fast and risk losing the consensus so important to the MSG process; to try things, and if they work look to extend and expand. Marinke reinforced the support for mandatory transparency requirements such as Dodd-Frank, the EU Directives and what is being proposed elsewhere, and called on D-EITI to look to mirror the requirements of the EU Directives. She specifically called for project level reporting, €100,000 limit, and (possibly most challenging) to publish reports with data which is 1 year old, rather than 2 years which is more usual for EITI.

And so the next steps will be the first full meeting of the D-EITI MSG, which I understand may be in late January 2015, at which I suspect the range of possibilities raised yesterday will be discussed. It is absolutely right that all these proposals should be on the table. However, I hope the MSG takes Peter Eigen and Marinke van Riet’s comments on board and walks before trying to run.

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