WHO WE WORK WITH

Extractive Industries Transparency Initiative (EITI)

Waterval SmelterThe Extractive Industries Transparency Initiative (EITI) was launched by the UK government in September 2002 with the objective of increasing transparency over payments by companies to governments and government-linked entities. ICMM President Tony Hodge sits on the EITI Board.


This issue was also identified in the MMSD project report: Breaking New Ground, which recommended that government, civil society and companies should disclose revenue payments and undertake external auditing.

By encouraging governments to adopt EITI, and by publicly reporting on taxes, ICMM hopes that more poor people will benefit from the taxes and royalties paid by mining companies to host governments.

The case for business engagement in EITI is clear

Revenues from extractive companies (defined here as meaning those engaged in oil, gas and mining), in the form of taxes, royalties, signature bonuses and other payments may often be the only source of economic growth and social development in developing and transition countries.

The case for business engagement in EITI is clear - a lack of good governance and the presence of corruption in many countries today remains a serious barrier to long-term investment. Conversely, countries which improve their governance processes are more likely to enhance the contribution that mining royalties and taxes make to poverty reduction and sustainable development.

Principle 1 of ICMM’s Sustainable Development Framework focuses on many aspects of good governance, including policies and practices to prevent bribery and corruption. In addition, monetary flow indicators are among the public reporting indicators to be applied by ICMM member companies relating to transparency of payments; the total sum of taxes of all types paid are reported and broken down by country.

In June 2003, ICMM released a position statement where company members committed to report all payments made to government to the assigned “aggregating body” in those countries whose governments have committed to implement the EITI. A template provides detailed guidelines on what constitutes tax payments generated from the activities of mining, processing/concentrating ores, smelting, refining and to first stage fabrication.

A second position statement followed in March 2005 with a commitment to help governments who endorse the EITI. This includes ensuring that the publication of payments is supported by the credible, independent audits to international standards, the publishing of such audits and civil society’s engagement in the process, the implementation of an agreed public, costed, and time-bound action plan.


Who we work with

AT A GLANCE

EITI was launched in 2002 to increase transparency over payments by companies to governments. Revenues from extractive companies are often the only source of economic growth in developing countries.

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SUSTAINABLE DEVELOPMENT FRAMEWORK

Principle 01:

Implement and maintain ethical business practices and sound systems of corporate governance.

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