USA Withdraws from EITI

New York /06.11.17/ Turan: The United States has withdrawn as an implementing country from the Extractive Industries Transparency Initiative (EITI), an international effort to fight corruption in managing revenues from oil, gas and mineral extraction. Reuters reported the organization of Michael Ross is named the Project on Resources, Development, and Governance, instead of the Project on Resources Governance and Development.

What this will mean in practice is difficult to say for the time being, but it is clear that the Trump Administration wants to protect US mining companies from the activities of the structures investigating corruption and the proper management of revenues from oil, gas and mineral extraction.

There had been doubts about continued U.S. participation in the EITI since earlier this year when Congress killed the so-called resource extraction rule, which required companies like Exxon Mobil Corp to disclose taxes and other fees paid to foreign governments, such as Russia.

In a letter to the EITI board on Thursday, the director of the U.S. Office of Natural Resources Revenue, Gregory J. Gould, wrote that "effective immediately" the United States was withdrawing as an EITI implementing country.

He wrote that while the U.S. remains committed to fighting corruption "it is clear that domestic implementation of EITI does not fully account for the U.S. legal framework."

The EITI, which was founded in 2003, and which the United States joined in 2014, sets a global standard for governments to disclose their revenues from oil, gas, and mining assets, and for companies to report payments made to obtain access to publicly owned resources, as well as other donations.

"It put more information in the hands of the public," said Michael Ross, executive director of the Project on Resources, Development, and Governance at the University of California Los Angeles.

"It involved the U.S. government disclosing all the money it was getting from oil, gas and mining companies and getting these companies to publicly disclose the payments they were making."

There are 52 countries in the EITI, many of them in sub-Saharan Africa, the Middle East, and South America.

Senator Ben Cardin, ranking Democrat on the Foreign Relations Committee, worked closely with Dick Lugar, a Republican and former chairman of the Senate Foreign Relations Committee, to help ensure that the United States became an implementing country of the EITI.

In a joint statement, they heaped scorn on the Trump administration for the withdrawal, calling it the result of "Big Oil and Gas" money and influence" and "a painful abdication of American leadership on transparency and good governance."

A statement from the chair of the EITI board said, "This is a disappointing, backwards step."

"The EITI is making important gains in global efforts to address corruption and illicit financial flows," Fredrik Reinfeldt said in the statement: "It"s important that resource-rich countries like the United States lead by example."

It should be reminded that earlier Azerbaijan withdrew from the EITI, refusing to comply with the norms and standards of this organization.

So, on June 17, 2003, President Ilham Aliyev at the EITI conference announced the country's decision to enter this structure. But in April 2015 Azerbaijan's status in the EITI was reduced from a "permanent member" to the level of a "candidate country" due to restrictions on the rights of civil society and the insufficient influence of NGOs on oil production processes.

At a meeting in Astana on October 24-26, 2016, the government of Azerbaijan was given six months to rectify the situation. Then this time was extended again.

However, Baku did not draw any conclusions and at the meeting of the EITI Board on March 8-9, 2017 in Bogotá, Azerbaijan's membership was suspended "due to the inability of the country's leadership to protect civil society." Immediately after that, Baku stated its own leaving the EITI. -02D-