Extractive industries transparency
Australia will enhance disclosure of company payments and government revenues from the oil, gas and mining sectors, by implementing the Extractive Industries Transparency Initiative (EITI) Standard and continuing to support EITI principles around the world.
The first part of this commitment, namely that Australia will implement the EITI, is specific. The EITI is well known and widely implemented, and a commitment to implement the EITI therefore moves Australia towards achieving a recognised international standard in the area of extractive industries transparency. The second part of the commitment is not specific because it is a general statement of intent only.
The first part of the commitment is measurable. The EITI standard contains a clear process by which countries become an implementing country, and then how they must implement the EITI. This includes the implementing government issuing a public statement of its intention to implement the EITI, appoints a senior official to lead the implementation and establishes a functioning multi-stakeholder group that involves the government, companies and the full, independent, active and effective participation of civil society. Progress on the EITI standard can be measured. The second part of the commitment is not measurable because it is not clear how Australia will support EITI principles around the world.
 EITI, How to Become an EITI Implementing Country, Guidance Note 1, May 2018, https://eiti.org/files/documents/guidance_note_1_how_to_become_an_eiti_implementing_country.pdf
In 2016, Australia pledged to implement the EITI.1 Five years after this commitment was made, it has not yet done so. The multi-stakeholder group, which comprises government, industry and civil society stakeholders, was established in November 2016 but has not met since 2019. Establishing a multi-stakeholder group, along with the government issuing a public statement of its intention to implement the EITI and appointing a senior official to lead the implementation, are key first steps in implementation. Critically, regular disclosure of extractive industry data consistent with the EITI standard has not occurred.
Recent correspondence from the relevant minister to Publish What You Pay Australia states that Australia’s decision to join the EITI was based on the 2013 EITI standard.2 The standard has subsequently been revised to require disclosure of more information – including beneficial ownership, contracts and environmental information – than the initial focus on revenue payments to government and which “may pose some challenges in Australia”, the minister said, although what these challenges are was not elaborated on in the minister’s letter to Publish What You Pay Australia.
The minister also stated that, until the government’s review of the Voluntary Tax Transparency Code (a set of principles and minimum standards to guide businesses on the public disclosure of tax information) is complete, it would be premature to reconvene the EITI multi-stakeholder group.2 The review of the Voluntary Tax Transparency Code commenced in 2018,3 and the Board of Taxation published its review of the Tax Transparency Code in February 2019,4 although no action has been taken since then. Establishing a multi-stakeholder group is a key step in EITI implementation and is something for which civil society groups in particular have been advocating.
|Challenges to effective commitment implementation|
|Failure to implement the EITI comes despite support for the initiative from civil society and the resources sector, including from Australian companies participating in the EITI in other jurisdictions.5 Political interest in and will to implement the EITI has waned since Australia first pledged to join the EITI.6 There is a sense from some stakeholders that the government considers issues of corruption and improved governance in the extractive industries to be a problem for other countries, not for Australia. There is also a sense from some stakeholders that Australia is hiding behind the review of the tax transparency code, and that the code does not meet the standards for disclosure established by the EITI.
|Opportunities to accelerate commitment implementation|
|Australia is an EITI “supporting country”7 and, in 2020, committed AUD$1.2 million (US$885,000) to support the EITI from 2020–2023.8 Australia is also a donor to the World Bank Extractives Global Programmatic Support Multi-donor Trust Fund, which, among other things, supports partner countries to implement the EITI. Australian support for EITI could be two-fold: support to other countries to implement the standard and domestic implementation. The next EITI global conference, scheduled for 2022, presents an opportunity for Australia to recommit to not just funding the EITI but implementing the EITI too.
It is recommended that Australia appoint a senior official to lead implementation and reconvene the multi-stakeholder group as a first step in implementing the EITI. The multi-stakeholder group should then be supported to develop a costed work plan that sets out the objectives and timelines for EITI implementation in Australia. Such timelines should aim to ensure publication of Australia’s first EITI report within 18 months of the multi-stakeholder group reconvening.
It is also recommended that EITI supporting companies do more to publicly advocate for EITI implementation in Australia, including by directly appealing to the relevant minister to reconvene the multi-stakeholder group as a matter of urgency, and supporting EITI implementation in relevant industry and government forums and through collaboration with civil society.
- EITI, EITI Welcomes Australia Implementing the EITI, 9 May 2016, https://eiti.org/news/eiti-welcomes-australia-implementing-eiti30 Dec 2021
- Letter from the Hon Keith Pitt, Minster for Resources, Water and Norther Australia to Clancy Moore, National Director, Publish What You Pay Australia, https://static1.squarespace.com/static/5dfc4510ad88600d53f93358/t/613fef5bb1af9529964c67bf/1631580006564/MC21-001828+Mr+Clancy+Moore.pdf30 Dec 2021
- Australian Board of Taxation, Post-implementation Review of the Voluntary Tax Transparency Code, https://taxboard.gov.au/consultation/post-implementation-review-of-the-voluntary-tax-transparency-code30 Dec 2021
- Commonwealth of Australia, Board of taxation, Post-implementation review of the Tax Transparency Code Consultation paper, February 2019, https://taxboard.gov.au/sites/taxboard.gov.au/files/migrated/2019/02/TTC-Consultation-Paper-final.pdf30 Dec 2021
- See for example, Minerals Council of Australia, Opening Speech – MCA 2019 Tax Conference, https://www.minerals.org.au/news/opening-speech-mca-2019-tax-conference and supporting EITI companies https://eiti.org/supporters/companies30 Dec 2021
- Stakeholder interviews, November 202130 Dec 2021
- EITI, Supporting Countries, https://eiti.org/supporters/countries30 Dec 2021
- Australian Dept of Foreign Affairs, Extractives Sector Development Assistance, https://www.dfat.gov.au/aid/topics/investment-priorities/infrastructure-trade-facilitation-international-competitiveness/extractives-sector-development-assistance/Pages/extractives-sector-development-assistance-initiatives30 Dec 2021