Unpacking the Multi-Stakeholders Engagement in Extractive Sectors: Lessons from EITI

Reflecting after the EITI conference, Lima.
Winnie Syombua and Ahmad Rizky M. Umar

This post is also available on the Global Policy Journal.

Does multi-stakeholder engagement work in extractive sectors? In this blog post, we argue that there are several things to be addressed in order to improve multi-stakeholders engagement within the Extractive Industries Transparency Initiatives.

The extractive sector has over the years been characterised by opacity, government interference and a lack of understanding by the public on the processes around it. Credible, transparent and accountable decision making processes enhance policy coherence in any sector.

This idea implies the acknowledgement of multi-stakeholders engagement in extractive governance. It is within this idea that the Extractive Industries Transparency Initiative (EITI) works, bringing along the government, extractive companies, and civil society groups in the process of governance.

Why Multi-Stakeholders Engagement?

The EITI was established as a model of reporting to increase transparency of payments and revenues in the extractive sector. Before its establishment, there was no mandatory disclosure for states or companies regarding their revenues and payments made to the governments they operated in.

The EITI Standard, which was launched in 2013, demands a tripartite structure of governance brings together the government, companies and civil society organizations and requires fiscal disclosures through mandatory reporting for its members. The reporting standard should be auditable and all stakeholders should be able to access the information and reports produced by states and companies.

Against this backdrop, the EITI acknowledges the role of stakeholders in its decision-making processes through Multi-Stakeholders Groups (MSG), The role of MSG is crucial in creating ownership, building capacity, consensus and long term development in policy making.

The coordination and successful implementation of an MSG is not easy to achieve. Every stakeholder brings on the table a level of expertise and interest that cannot be ignored. On the one hand, Governments often display reluctance in opening up their processes to public scrutiny, let alone working with the private and civil sectors. On the other hand, CSOs and private companies come laden with demands that must be met to fulfil their interests.

A solid MSG requires working out party interests and navigating party dynamics in a careful balancing act for successful and effective execution.

The EITI has been governed, since its establishment, through such a coordinated system. Implementing countries have put in place structures and policies that have enhanced the legitimacy and efficiency of the initiative a credible measure to promote transparency and accountability. At the international level, the EITI secretariat is governed by a board made up of multi-stakeholder representatives who oversee the implementation of the standard at a global level.

Dynamics of Multi-Stakeholders Engagement

However, the latest EITI Global Conference has shown that the multi-stakeholders engagement was also followed by several dynamism. During the EITI Board meeting, which takes place in Tuesday (23/2), there has been a heated tension outside the Conference venue between civil society and EITI Board Members.

Civil society groups, led by Publish What You Pay (PWYP) network, releases a statement that EITI Governance failures can threaten civil society involvement in the EITI. This statement was released due to the heated negotiation during the election of EITI Board members in which the civil society group decided not to attend.

The dynamics also occurs in national level. In country where civil society has conflict with government, such as Azerbaijan, the multi-stakeholders group was hampered from working properly in accordance to EITI Principles.

These dynamic processes pose important challenges for the EITI. On the one hand, it is visible that the the multi-stakeholders engagement has been set as the standard for EITI processes. However, when it comes into practices, the multi-stakeholders engagement has to face some challenges, particularly when the tension came outside EITI institutional framework or national-level processes.

It then opens up spaces for improvement for multi-stakeholders engagement in the EITI. At the internationall level, EITI needs to set and maintan a deliberative mechanism in the Governing Board through continuous dialogue with all stakeholders., At the national level, EITI should be able to ensure citizens’ participation in the multi-stakeholders group.

Multi- stakeholders engagement and institutional structures in the extractive industry has been key in ensuring that the EITI becomes a viable initiative. The challenge to improve these processes lies to all EITI members and stakeholders in the future.

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