The United States recently published its first narrative report and payment reconciliation report under the Extractive Industries Transparency Initiative (EITI). The EITI was founded in 2003 to help end the “resource curse” by which the revenues generated from natural resource extraction benefit a small group of politically-connected insiders and do nothing to improve the lives of the vast majority of people in many resource-rich countries. The concept that underpins the EITI is simple: by requiring participating resource extraction companies to report the payments they make to all levels of government in a country, while simultaneously requiring participating governments to report the revenues (including royalties, bonuses, rents, penalties, fees, and corporate income taxes) received from those companies, one can compare the reported figures and bring transparency to an often opaque sector. This transparency can in turn be used to hold governments accountable for how they distribute and spend resource wealth. Membership in the EITI is voluntary; there are currently 49 countries participating. The EITI is governed at both the international and national levels by multi-stakeholder groups composed of representatives of government, civil society, and industry.
The recently published U.S. EITI report covers payments made and received in 2013. There is much valuable information in the both report and the accompanying U.S. EITI website. The Department of Interior is to be commended for publishing 100% of payments it received in 2013 from companies producing on federal lands and in federal waters (totaling approximately $12 billion), as well as state-by-state royalties for 18 resource-rich U.S. states. The report also provides detailed information on natural resource extraction governance at the federal, state, and tribal levels, statistics on the size of the extractives sector (in terms of economic output and employment), as well as a valuable assessment of the revenue sustainability in 12 resource-dependent counties.
That said, there are a couple of important respects in which the report falls short: Continue reading