What is EITI?

At the national level, the EITI is a government-led initiative, however, the EITI process calls for the active involvement of extractive industry companies and other partners from wider society. Broad local leadership and participation are essential, and active public engagement from a range of stakeholders is required for EITI success.

The Extractive Industries Transparency Initiative (EITI) aims to increase transparency in financial transactions between governments and companies within the extractive industries. The EITI involves the full publication and verification of company payments made to governments and of government revenues received from oil, gas and mining activities. These activities have the purpose of strengthening governance in resource-rich countries, with the spinoff effect that revenues from natural resources will be directed to government spending on health, education and other development priorities.

Countries implementing EITI, together with extractive industry companies, submit their revenue and payment data to an independent third party which audits the data using internationally recognized accounting and auditing standards. The auditor determines if there are any discrepancies between what companies pay the government in the form of royalties, taxes, petroleum transportation fees (etc.), and what government revenues are generated from oil, gas and mining operations in the country. The results are made public in the form of a report and reviewed by various stakeholders. Through successful implementation of this process, the discrepancies in values between company payments and government revenues decrease, and the information is used to improve public financial management and accountability. Once accepted and reviewed by stakeholders, countries enter a Validation process to measure their progress in implementing EITI and have their compliance assessed against the initiative's requirements. Click here to see a more detailed description of the process.

EITI is supported by a coalition of companies, governments, investors and non-governmental organizations. Over 30 countries have committed to the EITI Principles and Criteria some countries only just beginning to launch the process, while others have published several years of revenue and payments data. Click here to see a list of participating countries. In February 2009, Azerbaijan became the first EITI candidate country to reach “validated” status.