26 February 2007
At a two-day “experience-sharing meeting” on the extractive industries (EI) in Africa last week in Tunis, the banks agreed to intensify their collaboration on EI work and support for the implementation of the EITI by resource-rich countries in Africa.
The Extractive Industries Transparency Initiative (EITI) is an international campaign whose stated aim is to improve governance in resource-rich countries through disclosure of company payments and government revenues from oil, gas and mineral extraction.
Other outcomes of the meeting included: a proposal to jointly conduct geological studies to map oil, gas and mining reserves on the continent; a proposed technical assistance facility to aid countries in contract negotiation and industry regulation; and an agreement to support artisanal mining activities through a Communities and Small Scale Mining (CASM) initiative.
The conference came only weeks after the AfDB’s inaugural meeting of its new Extractive Industries Task Force, a committee responsible for advising the Bank on a strategy for its future engagement in the oil, mining and gas sectors and developing instruments to support EITI implementation, revenue maximization and effective management in member countries. The Task Force was created following the AfDB’s endorsement of EITI at the third official EITI conference held last October in Oslo, Norway. AfDB now holds a seat as an observer on the EITI Board.
While growing interest in EITI signals the increased attention stakeholders are paying to the issue of revenue transparency, civil society advocates argue that bolder steps are needed to ensure that companies and resource-rich countries move beyond rhetoric to disclose meaningful information about natural resource extraction. Adherence to EITI requires that a governments and companies voluntarily disclose EI revenue payments and receipts.
Critics argue that more extensive and thoroughgoing reforms are needed in order for transparency in the extractive industries to have a real effect on poverty alleviation and socio-economic justice in resource-rich countries. Members of the Publish What You Pay (PWYP) coalition advocate for universal, mandatory requirements regarding the disclosure of all payments, revenues, and, importantly, contracts between extractive industry companies and their host governments so as to help ensure the accountability of all industry actors and state beneficiaries.
The AfDB’s recent meeting with the World Bank is indicative of its growing interest in the extractive sectors. The AfDB approved financing for two major mining projects last year and has signaled its intent to increase its involvement in the mineral sector. With commodity prices on the rise and a renewed scramble for Africa’s natural resources, the AfDB is only one among many lenders trying to cash in on Africa’s mining boom. However, serious questions remain about the AfDB’s capacity to design and supervise oil, gas and mining projects considering the significant environmental, social and economic risks they entail.
Resources
- Press release: AfDB, World Bank experts reach common grounds on extractive industry, African Development Bank, February 13, 2007 (AfDB website)
- Press release: Bank Task Force on extractive industries meets, African Development Bank, January 22, 2007 (AfDB website)
- African growth needs financial openness - experts by Sonia Ounissi, Reuters, February 13, 2007 (Reuters website)