Good Financial Governance and Extractives

EITI - Extractive Industries Transparency Initiative

Khurmala Oilfield near Makhmour, Iraq

Promoting transparency in the extractive sector, especially in the revenue flows from mining companies to state institutions, is an important aim of German development cooperation. This is why the German Government supports the international Extractive Industries Transparency Initiative (EITI), which works to achieve greater financial transparency and accountability in public revenues from the extractive sector.

The Initiative’s aim is to ensure the transparent disclosure of public revenues from the extractive sector, increase those revenues, establish clear conditions for extractive companies and enable civil society to monitor the sector better. The Initiative is supported through voluntary commitments by a growing number of governments of resource-producing countries – now more than 50 – and is put into practice by state and civil society actors in joint efforts with private companies and investors in a multi-stakeholder process. The revenues generated from the extraction of mineral resources and metal ores are disclosed, with the aim of preventing revenues from taxes or mining royalties from state actors or private companies being lost in corruption channels. EITI helps inform citizens of resource-rich countries how much tax and other levies mining companies have paid in their countries and what the state has received from the sector in the form of public revenues. EITI thus gives citizens an instrument with which they can effectively hold companies and governments to account.

German development cooperation has supported EITI politically, financially and technically ever since the Initiative was set up in 2003. This includes assisting national EITI processes in partner countries through bilateral and regional programmes and contributing to the international EITI secretariat and to the EITI trust fund administered by the World Bank. By granting support totalling 26 million euros, German development cooperation is among the leading supporters of EITI worldwide. 

The Extractives and Development sector programme supports BMZ to assert its interests and promote the dissemination and further development of the Initiative. To do this, the programme cooperates with international partners in carrying out regular training for national EITI secretariats, state actors and civil society in partner countries on how to implement EITI. The programme is also evaluated the initiative’s effectiveness and impacts in the study Assessing the Effectiveness and Impact of the Extractive Industries Transparency Initiative. Based on this study, the sector programme developed the guideline on Monitoring and Evaluation (M&E) of EITI Implementation as part of a comprehensive advisory package for national EITI processes.

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