Building Consensus around U.S. Extractive Industries Transparency Initiative (USEITI) Implementation

Countries rich in oil, gas, and minerals have historically received sizable payments for natural resource exploitation — yet resource-rich nations with weak governance often suffer from economic stagnation, corruption, and even violent conflict. Communities are often closed off to benefits by extraction of public resources and mistrust of government and industry abounds. Over the years, advocates for better resource revenue transparency have highlighted the potential benefits of public reporting for government, industry, and civil society alike.

In 2002, former British Prime Minister Tony Blair founded the Extractive Industries Transparency Initiative (EITI) with the aim of improving governance through transparency and accountability in the extractives sector. At that time, the international initiative targeted countries with limited or no public reporting of monies paid to governments by companies extracting natural resources.

Nine years later, as part of President Obama’s National Action Plan for the Open Government Partnership, the United States joined the ranks of 35 countries working towards EITI compliance. The U.S. Extractive Industries Transparency Initiative (USEITI) provides the U.S., an international EITI board member and funder, with an opportunity for global leadership on transparency.

In early 2012, the U.S. Department of the Interior (DOI) and the U.S. Institute for Environmental Conflict Resolution selected CBI to provide neutral assistance in establishing the USEITI Multi-Stakeholder Group (MSG). As facilitators of USEITI’s nascent stages, CBI Managing Director Pat Field and Senior Associate Rachel Milner Gillers have assisted DOI to gather input via 66 independent interviews across all three core EITI sectors (civil society, industry and government); facilitate public listening sessions nationwide seeking similar input; collect written public comments; and provide recommendations for MSG formation based on the input.

Governed by an international, multi-sector board, EITI is a voluntary, participatory process that seeks to establish a framework for examining extractives revenues in member countries: the extractive industry reports to an independent party on revenues paid to government; the government publishes these payments; and the independent party reconciles the data.

EITI is implemented on a country-by-country basis by a Multi-Stakeholder Group made up of representatives from civil society, industry, and government. The MSG is charged with determining what type of data should be reported and verified, and considering whether or not its decisions should be incorporated into national law.

Building consensus on the types of lands, industries, and payments to be included in EITI reporting is particularly challenging in the U.S., given the size of the country, the breadth of extractive industries, and the complex interactions between federal, state, and tribal governance. The creation of a representative and efficient MSG in the U.S. requires defining and ensuring adequate sector representation, aligning the EITI with U.S. policies and regulations, and covering process and implementation-related costs.

In May 2012, CBI published findings and recommendations for USEITI’s MSG formation in an independent draft stake¬holder assessment, including options for MSG decision rules, representation criteria, size and balance, and administrative and legal options for its establishment. In response to public concern about sufficient USEITI education and outreach, DOI has convened a second public comment period, currently facilitated by CBI, to gather feedback on the draft assessment and to further inform final recommendations to DOI.

CBI’s final assessment, incorporating the many public comments, will be released in July 2012. Then, CBI will continue to assist the three major sectors – civil society, industry, and government – in forming and launching the Multi-Stakeholder Groups.