The Extractive Industries Transparency Initiative (EITI) is a global coalition of governments, companies and civil society working together to improve openness and accountable management of revenues from natural resource development. Under the framework of the initiative, companies disclose what they have paid in taxes and other payments and the government discloses what it has received. Once received, these two sets of figures are compared and reconciled by an independent third-party auditor. While a relatively straightforward accounting practice, it is nevertheless a critical exercise to promote proper resource management and good governance. The EITI is designed to provide civil society with a clearer understanding of the revenue originating from their country’s extraction sector, providing citizens with the ability to hold government and companies more accountable and to better equip them to engage in debate as to how resource wealth should be managed.
Currently, there are 44 countries participating in the Initiative. Although designated as “EITI compliant”beginning 2010, Mongolia
has submitted EITI reports since 2007.
For its seventh and most recent report published in December 2013 for the 2012 fiscal year, over 80% of extraction license holders reported their expenditures. In total, 361 million MNT in discrepancies were discovered between government revenue reports and the expense claims made by 200 of Mongolia’s largest extraction companies, representing 0.02% of the Total Basic Payments declared by the government, As they will be subject to the increasingly strict rules of the 2013 EITI Standard, it is expected that Mongolia’s future reports will help to promote an even higher standard of transparency and accountability.
While the EITI reporting process worldwide is conceived as a step toward transparency and accountability among governments, companies and civil society, what is the real value of such a reporting process for stakeholders in Mongolia? How can data from these reports be used to leverage lasting transparency in natural resource governance and investments in human development in Mongolia? And, how can the dissemination of information collected by
these report be improved to facilitate greater participation by civil society in the discussion on proper resource management?
Since Mongolia submitted it’s first EITI report in 2007, over 70 recommendations to facilitate and improve the reporting process have been made. The recommendations have been directed not only at the practices of mining companies operating in Mongolia, but also those of different government ministries at the
soum,
aimag and national level. Although Mongolia’s participation in the EITI has helped to improve transparency and good governance in the country’s
extractive industry, many of the recommendations from the annual reports have yet to be implemented.
Since January 2014, an interdisciplinary group of graduate students from the University of British Columbia in Vancouver, Canada have been working to better understand the EITI, its application to, and implications for the Mongolian
extractive sector. The “EITI Mongolia Project” is overseen by Dr. Julian Dierkes of the Institute of
Asia Research and Dr. Dirk van Zyl senior faculty at UBC. Comprising of students specializing in Asia Pacific policy, mining engineering, regional planning, natural resource governance and public health, the group will be presenting their
projects findings and be interacting with representatives from public, private and NGO sectors in Mongolia from May 19-31. Some of the findings they will be discussing can be found on the UBC Asia Pacific Policy Project blog site, http://blogs.ubc.ca/maapps/.
The Extractive Industries Transparency Initiative (EITI) is a global coalition of governments, companies and civil society working together to improve openness and accountable management of revenues from natural resource development. Under the framework of the initiative, companies disclose what they have paid in taxes and other payments and the government discloses what it has received. Once received, these two sets of figures are compared and reconciled by an independent third-party auditor. While a relatively straightforward accounting practice, it is nevertheless a critical exercise to promote proper resource management and good governance. The EITI is designed to provide civil society with a clearer understanding of the revenue originating from their country’s extraction sector, providing citizens with the ability to hold government and companies more accountable and to better equip them to engage in debate as to how resource wealth should be managed.