The EITI has launched a consultation to seek views on the future of Validation. This is a key opportunity for stakeholders to influence how progress towards EITI implementation should be assessed. The consultation is open until Tuesday 14 January.
Think of a racing circuit: one goal, many different cars and drivers. Now imagine the circuit as the EITI Standard, where each car represents an EITI implementing country. The race steward performs the role of Validation, keeping track of each car’s progress and waving the chequered flag at the finish. But, unlike racing cars, EITI implementing countries have different priorities and challenges. Should they even be driving around the same track? If the goal is to improve governance of the extractive sector, how can we best assess whether it has been reached?
These are just some of the questions that the EITI Board has started to consider in their ongoing review of EITI Validation.
Good governance: check?
Validation matters because it is the clearest yardstick we have for whether EITI implementation has been successful. By applying corrective actions and clear deadlines, Validation guides country efforts towards a more open and accountable extractive sector. Governments and multi-stakeholder groups (MSGs) work to make progress, with civil society, investors and development partners keeping a close eye on the outcome.
However, there is a disconnect between this aspiration for Validation and what it currently measures. We encourage countries to make EITI implementation meaningful in the context of their national challenges and priorities. And yet, Validation mostly measures disclosure, rather than the outcomes or impact of EITI implementation.
But the current model of Validation has its strengths too. The EITI Requirements are ambitious and require a systematic approach to the disclosure of data along key areas of the extractive value chain. The 2019 Standard introduces even more granular and comprehensive disclosures than ever before.
Since the Validation process was introduced in 2016, we’ve learned that one racing circuit does not always fit all. Nigeria, for example, is a country where all EITI Requirements are applicable. It was found to have made satisfactory progress in implementing the EITI last February, meaning that Nigeria has fully implemented the 2016 EITI Standard. However, the greatest achievements and challenges of NEITI – the Nigerian EITI – are not comprehensively reflected in its Validation. It’s the efforts beyond the requirements that have made its work so impactful. The Nigerian government has recovered over USD 3bn thanks to shortcomings that were identified, analysed and publicised by NEITI. Yet despite the achievements and progress in meeting the EITI Standard, corruption and inefficiency are still prevalent in Nigeria’s extractives industries.
Getting to the bottom of it
Assessing countries against a common set of rules enables a systematic approach and has encouraged progress. Countries are expected to meet all EITI Requirements within a reasonable timeframe, or else risk suspension and potentially delisting from the EITI.
On the other hand, extractives governance is neither a smooth nor flat road. The extractives industry changes constantly and different challenges arise as priorities shift and new areas of work become important.
As part of the review, the Board will consider how to bring together three different imperatives. Firstly, assessing progress against a series of technical requirements; secondly, measuring the impact of EITI implementation; and thirdly, taking account of broader challenges in extractive sector governance. The result will be a balancing act between rigour and pragmatism, in which the EITI will strive to retain its focus both on country-level ownership and upholding a common standard.
In addition to the ‘how’ and ‘what’, the Board will be considering ‘who’ and ‘when’. Yet, perhaps the place to start is ‘why’: What is the purpose of Validation and what does the EITI community want to achieve with it?
The EITI International Secretariat’s consultation process seeks stakeholders’ views on Validation. Stakeholders are invited to submit their responses to the consultation by 14 January.
Read more: Crunching the numbers on EITI Validation