By Kiana Wilburg
Most would deem the prospects of Guyana signing on to the Extractive Industries Transparency Initiative
(EITI) to be extremely worthwhile. But Presidential Advisor on Sustainable Development, Dr. Clive Thomas, says that while the benefits are attractive, it may be too narrow to help Guyana end corruption in the extractive sector.
He expressed these concerns during a recent symposium at the Pegasus Hotel.
The event saw a collection of some of the region’s most knowledgeable minds on the extractive industries. There, they discussed the promotion of natural resource revenue and sustainable resource revenue management in the Caribbean.
Dr. Thomas, who was one of the presenters that day, told the audience that his findings should not be interpreted as hostility towards the EITI, an international organization which maintains a standard of assessing the levels of transparency regarding countries’ oil, gas and mineral resources. He said that it should be viewed only as constructive, critical observation, in the hope that it would enhance the ongoing process.
Dr. Thomas said that his interpretations of the literature on the EITI process, particularly from participants in other jurisdictions (regional), as well as wider civil society analysts, are that the Region must avoid becoming a passive recipient of the EITI package. He said that it must engage the process “intellectually, philosophically, and, above all, in its political-economy context, at all times”.
The Presidential Advisor said that Guyana cannot afford the luxury of an uncritical adoption of a process which, as of now, is without the participation of the vast majority of key global players. He named some of these players to be emerging economies such as Brazil, Russia, India and China.
The Economist said that despite several years of effort so far, his judgment is that the EITI process has not yet achieved deserving awareness and impact at the societal level. He added that it also remains poorly linked to wider governance reform processes which include public service reform, constitutional reform, Local Government Election development, and so on.
Dr. Thomas said that there exist varying levels of EITI ambition among regional countries and also within them. He said that there is therefore, no room for a one-size-fits-all approach to the determination of the transparency and accountability space potentially available in countries, and the Region as a whole, for effective regulation of the extractive industries (EI) sector. He opined that there is also an inevitable complementarity of EITI with other local, regional, hemispheric, and global governance arrangements.
He said that seeking synergies and complementarities should therefore play significant roles in; for example, other complementary voluntary schemes which include: Forest Stewardship Council, International Council on Mining and Metals, and the UN Global Compact.
“Empirically, it has been reported that there is a ‘strong’ correlation between EITI members (and weak non-EITI members) and poor performance on World Bank governance indicators. It could be reasonably argued that the elapsed time of EITI existence does not permit good sampling for purposes of measuring such comparative outcomes among EITI and non-EITI countries.
Furthermore, the correlation between poor governance and resource curse is not proof of causality.”
Professor Thomas said that he also has concerns over inadequate mainstreaming of EITI Standards with regard to public management, corporate conduct, policy dialogue and debate at the societal level.
“Shining a light on EI activities cannot by itself fix corruption and poor governance in Guyana. It is presumptuous to claim this, as some do, even though this remains an area of enormous darkness and secrecy. And, further bringing governments, civil society and the EI together, is in itself of considerable merit.”
He continued, “Is the EITI focus too narrow if it centres mainly on revenues? Should expenditure of governments be effectively captured? And how?”
“These questions suggest the need therefore, to monitor the EI sector’s entire value chain, including the award of contracts and licences, operations, environmental requirements, social commitments, taxes and fees, distribution of revenue to government, and project/programme execution by governments.”
Dr. Thomas said that it should be noted in this regard that recent advances of the EITI 2013 Standard include revenue allocation and sustainability, licence registers and allocations, and issues of beneficial ownership and contracts.
He said that major criticisms, have in the past, focused on EITI’s voluntary nature and its limited focus on a small part of the value chain, which stimulated the 2013 revised Standard.
The economist noted that the European Parliamentary Research Service, in its EITI Briefing in 2014 noted, “Overall results to date have been uneven and partial.”
Dr. Thomas said that for Guyana he would raise the questions: Why only the mineral extractives sector? What of non-minerals?
He said that one should take note of the recent regional EITI Conference which was held in Peru. He said that the forum saw calls for EITI tackling environmental, indigenous, human rights, ethnic issues and degeneration in the Region.
The Presidential Advisor said that paradoxically, for a participant like Guyana at the regional level, the focus is on transparency and accountability of the companies in the extractive industries, as between governments and civil society.
Dr. Thomas noted, too, that one of the significant findings of the EITI is that it focuses on commodity production, but does not cover commodity trading, which he deemed to be an extremely important area.
With the aforementioned in mind, he said that one might seriously want to pause for a moment and consider how impacting EITI would really be in plugging up the loopholes for corruption to take place in the said sector.