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DE RUEHC #8858/01 0842130
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R 252112Z MAR 09
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UNCLAS SECTION 01 OF 04 STATE 028858 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAID ECON EMIN ENRG EPET PGOV PREL
SUBJECT: EITI UPDATE FOR CANDIDATE COUNTRIES 
 
REF: DOHA 150 
 
(U)  1.  This is an action request.  Please see paragraph 8. 
 
(U) 2.  The Extractive Industries Transparency Initiative 
(EITI) and natural resource revenue transparency are an 
important part of the USG's anti-corruption and international 
energy security strategies.  EITI is now being implemented in 
26 countries and several more are considering becoming 
candidate countries.  EITI,s expansion is a sign of its 
appeal; however, fully implementing EITI requires commitment 
to a two-year multi-step process to improve transparency and 
governance.  The final step in EITI implementation is to pass 
an independent "validation" and then become an EITI compliant 
county.  As most candidate countries are now entering the 
second year of the EITI process, the Department provides this 
assessment of progress to date.  While some countries have 
made considerable headway, others will need to considerably 
increase their efforts to be able to pass a validation and 
become compliant. 
 
(U) 3.  To become EITI candidates, countries must complete 
the first four of eighteen progress indicators: 1) a public 
commitment by the government to implement EITI; 2) commitment 
by the government to work with civil society and the private 
sector; 3) the appointment of a lead government official to 
work with the EITI multi-stakeholder group; 4) publishing a 
fully costed implementation work plan with a realistic 
timeline and assessment of capacity constraints.  Countries 
are encouraged to reach out to the EITI Secretariat and World 
Bank to address self-identified capacity issues.  Once 
countries become candidates, they have two years to execute 
their work plan and complete a validation.  Validation, the 
final step in the implementation process, is a key feature of 
EITI. Validation is not simply an accounting exercise, it is 
an independent review of the success that countries have in 
integrating all stakeholders into the EITI process and 
executing their work plan. 
 
(SBU) 4.  On March 10, 2008, the EITI Board established a 
two-year deadline for the first twenty-two EITI candidate 
countries to complete validation.  We are now halfway through 
the time allotted.  Some countries have made good progress 
and appear well placed to meet this deadline.  In February, 
Azerbaijan became the first EITI country to undertake and 
pass a validation, making it the first compliant country. 
Liberia, Nigeria, and Ghana have made substantial progress 
and are starting the validation process.  Kazakhstan, 
Timor-Leste, and Mongolia are also making progress. 
 
 
STATE 00028858  002 OF 004 
 
 
(SBU) 5.  In a number of countries, however, progress has 
been slow and the expectation is that these governments will 
need significantly greater commitment and effort to have a 
chance to start or pass a validation before their two year 
deadline.  The EITI Secretariat is particularly concerned 
about the progress in Cote d'Ivoire, Democratic Republic of 
Congo, Equatorial Guinea, Gabon, Guinea, Mali, Mauritania, 
Niger, and Yemen.  A list of candidate countries and 
validation deadlines appears as background in paragraph 10. 
A full report on implementation progress can be found on the 
EITI website: http://www.eitransparency.org. 
 
(SBU) 6.  Each country faces unique circumstances in 
implementing EITI, but the Secretariat finds that political 
will to work with civil society groups is the key element in 
making progress, more so than capacity to undertake a 
financial audit.  This is particularly important to 
successfully pass an independent validation, the final step 
to becoming a compliant country. 
 
(SBU) 7.  EITI sets objective standards for validation that 
apply to all countries.  To ensure integrity of the EITI 
process, countries that have not completed a validation 
within two years will not be considered active participants 
in EITI.  For EITI to be successful, implementing countries 
must take ownership of the process and seek help from the 
EITI Secretariat and World Bank in resolving implementation 
or capacity issues.  The World Bank through its EITI 
Multi-Donor Trust Fund provides technical assistance to 
implementing countries. 
 
(SBU) 8.  ACTION REQUEST:  We encourage those countries where 
significant progress is being made to undertake validation as 
soon as possible.  For countries where progress has been slow 
or is stalled, we ask Posts to remind host governments of the 
approaching deadline and the importance of working with the 
multi-stakeholder group, particularly civil society, and 
completing validation.  Talking points are included in 
paragraph 10. 
 
(U) 9.  Posts can draw from the following talking points in 
their discussions.  Please contact EEB/ESC/IEC/ENR David 
Henry with any questions.  An excellent resource for 
information on EITI, the process, rules, and country progress 
assessment is the EITI website http//:www.eitransparency.org. 
 Many of the materials on this site are available in multiple 
languages.  Additional background on EITI is included in 
paragraph 11.  The Department appreciates Posts' continued 
engagement on this important issue. 
 
(U) 10.  Talking Points for Cameroon, Cote d'Ivoire, 
Democratic Republic of Congo, Equatorial Guinea, Gabon, 
Kazakhstan, Kyrgyzstan, Mali, Mongolia, Niger, Peru, Republic 
of Congo, Sao Tome and Principe, Timor-Leste, and Yemen: 
 
STATE 00028858  003 OF 004 
 
 
 
*  We want to acknowledge (government)'s status as an EITI 
candidate country.  EITI is becoming a global standard for 
revenue transparency in the extractive sector and is being 
implemented by 26 countries with many more considering 
adopting the initiative. 
 
*  The March 9, 2010 deadline for your completing an EITI 
validation is less than one year away.  We urge your 
government to work to meet this deadline.  We encourage you 
to reach out to the EITI Secretariat and the World Bank to 
help resolve process or capacity issues that may be impeding 
progress toward validation. 
 
PARAGRAPH TWO FOR COTE D'IVOIRE ONLY -- The May 11, 2010 
deadline for your completing an EITI validation is fourteen 
months away.  We urge your government to work to meet this 
deadline.  We encourage you to reach out to the EITI 
Secretariat and the World Bank to help resolve process or 
capacity issues that may be impeding progress toward 
validation. 
 
*  We share your goals of encouraging transparency and making 
best use of resources to promote development.  Your becoming 
an EITI compliant country would be a significant step toward 
attaining that goal. 
 
(U) 11.  Background Information on EITI 
 
The Extractive Industries Transparency Initiative (EITI) aims 
to improve fiscal transparency through public disclosure and 
verification of oil, gas, and mining company payments to 
governments and governments' reported revenues from 
extractive companies.  When governance is weak, these 
revenues are poorly accounted for and often lead to 
corruption and conflict -- the so-called resource curse. 
EITI aims to improve transparency and accountability in 
resource rich developing countries. 
 
EITI is a voluntary multi-stakeholder initiative that brings 
together government, industry, and civil society to report 
and verify extractive industry revenues in the countries 
where they are produced. 
 
The primary beneficiaries of EITI are the governments and 
citizens of resource rich developing countries.  Knowing how 
much revenue governments receive, and how much companies pay, 
is critical first step to hold decision-makers accountable 
for the use of those revenues. 
 
Resource rich countries implementing EITI can benefit from an 
improved investment climate by providing a clear signal to 
investors and international financial institutions that the 
government is committed to strengthening transparency and 
 
STATE 00028858  004 OF 004 
 
 
accountability. 
 
Civil society benefits from increased information in the 
public domain about revenues that governments manage on 
behalf of citizens, thereby increasing accountability. 
 
Extractive industry firms operating in EITI countries can 
help mitigate investment risk by supporting EITI.  Many 
international extractive firms also view EITI a complement to 
their Corporate Social Responsibility programs. 
 
There are 26 EITI implementing countries.  Countries have two 
years from the time they become candidate countries to 
complete a validation.  The first 22 candidate countries have 
until March 2010 to complete a validation.  The table below 
shows progress toward validation for EITI implementing 
countries. 
 
COUNTRY            VALIDATION DEADLINE     STATUS 
Azerbaijan         March 9 2010            Complete 
Cameroon           March 9 2010            Not Started 
Gabon              March 9 2010            Not Started 
Ghana              March 9 2010            Started 
Guinea             March 9 2010            Not Started 
Kazakhstan         March 9 2010            Not Started 
Kyrgyzstan         March 9 2010            Not Started 
Liberia            March 9 2010            Started 
Mali               March 9 2010            Not Started 
Mauritania         March 9 2010            Not Started 
Mongolia           March 9 2010            Not Started 
Niger              March 9 2010            Not Started 
Nigeria            March 9 2010            Started 
Peru               March 9 2010            Not Started 
Yemen              March 9 2010            Not Started 
Congo              March 9 2010            Not Started 
DR Congo           March 9 2010            Not Started 
Eq. Guinea         March 9 2010            Not Started 
Madagascar         March 9 2010            Not Started 
Sao Tome/Prin.     March 9 2010            Not Started 
Sierra Leone       March 9 2010            Not Started 
Timor-Leste        March 9 2010            Not Started 
Cote d'Ivoire      May 11 2010             Not Started 
Cent. Af. Rep.     November 20 2010        Not Started 
Norway             February 10 2011        Not Started 
Tanzania           February 16 2011        Not Started 
CLINTON