Extractive Industries Transparency Initiative (EITI)
Extractive Industries Transparency Initiative or EITI is an international standard. It is a global coalition of governments, companies and civil society working together to improve transparency and accountability in the management of revenues from natural resources. It aims at strengthening accountability and public trust for revenues paid and received for a country’s oil, gas and mineral resources. Each implementing country creates its own EITI process adapted to the specific needs of the country.
In 2008, civil society in Malawi began advocating for the country to join the EITI in order to avoid the ‘resource curse’ and lay a good foundation for governance of the extractive industries. A “resource curse is a paradoxical situation in which countries with an abundance of non-renewable resources experience stagnant growth or even economic contraction due to poor governance of those natural resources and revenues accruing from the extractive sector. Following the advocacy from Civil Society in Malawi, an EITI Taskforce was formed in order to assess the value of Malawi joining. In 2013, Malawi launched the Mines and Minerals Policy which committed to joining the EITI.
Corresponding to the extractive sector governance reform agenda, the Malawi Government resolved to join the EITI in June 2014 when His Excellency the State President made a declaration during the State of the Nation Address. Following this expressed commitment, compliant with the EITI Standard, the Minister responsible for Finance was selected to champion the initiative in Malawi, leading to the creation of Malawi Extractive Industries Transparency Initiative (MWEITI).
Moving ahead in EITI implementation, a team of 12 members representing Civil Society, Private Sector and Government was nominated to form the Multi-Stakeholder Group (MSG) in early 2015. The MWEITI Secretariat was also set up to manage administrative tasks of the MSG and sits in the Revenue Policy Division of the Ministry of Finance, Economic Planning and Development.
The MWEITI MSG then developed a three-year work plan (2015 – 2017) with the objective of moving Malawi from a candidate country to a compliant one and a strategic goal of enhancing national sustainable development through revenue transparency. This work plan also serves as a guide in the implementation of activities by the MWEITI Secretariat. The development of three-year Work Plan was followed by the submission of an application to the EITI International Secretariat for Malawi’s candidature status, which was granted on 22 October 2015.
In keeping with the EITI Standard and MWEITI three-year Work Plan, the MSG commissioned a Scoping Study of the MWEITI in the fourth quarter of 2015 to an external consultant team in order to prepare the MSG’s decision on which natural resources, companies and revenue payments to be included in the first report.
In addition to the three-year work plan, the MWEITI MSG also developed an annual work plan for 2016. Implemented activities in the 2016 Annual Work Plan include launching of MWEITI’s first Scoping Study, hiring of the Independent Administrator and development of the Open Data Policy and Beneficial Ownership Disclosure Roadmap.
The Open Data Policy contains strategies for how MWEITI will manage natural resource data in Malawi. The policy has been developed with the intention of ensuring that data relating to natural resources revenue and expenditure is easily accessible, user friendly, understood and raises public debate regarding the management of the oil, gas, mining and forestry industries.
The Beneficial Ownership Disclosure (BOD) Roadmap includes plans and activities on how the Government will ensure that corporate entities that bid for or invest in extractive assets disclose the identities of their beneficial owners.
Where are we?
MWEITI, which is still in its infancy, is working steadily to establish its relevance and enthrone transparency and accountability in the extractive sector in Malawi. MWEITI has just conducted a reconciliation process, which is a comparison of payments made by extractive sector companies and revenues received by the Government from the companies. Look out for our first EITI Report in April 2017.
Where are we going?
MWEITI is developing its communication strategy and will be implementing a series of initiatives to make sure that the EITI process is known to all Malawians and engage various stakeholders on making sure that natural resources benefit Malawi.
The hallmark of the EITI process is the EITI Report. This represents the audit of the extractive industries, which is a major product of MWEITI. In April this year, MWEITI will release the first MWEITI Report or Audit, which is a major product launch and will coincide with the launch of the initiative. Many activities are being planned around the release of the audit that will culminate into helping build and sustain awareness for the MWEITI Audit.
MWEITI is also exploring how to implement contract transparency as well as getting ready to implement the Open Data Policy and Beneficial Ownership Disclosure Roadmap, which are expected to lay the foundations for transparency in the extractive sector.
Last but not least is the development of a strategic plan, which will represent a set of decisions taken by the MSG on priorities for deepening and strengthening MWEITI’s role in the extractive sector and Malawi economy.