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What is EITI ?

What and Who

135_thumb_EITI_MSG_ProcessEITI (Extractive Industries Transparency Initiative) is a global standard for transparency in the extractive sector (including oil, gas, mineralsand coal). The main part of the standard is a process in which the comparison is done between government payments to the company in this sector with the government_s revenues.

The result of a process called reconciliation into a report and published to the public.The process that uses Independent Administrator is done under the supervision of a multi-stakeholder group interests or the so-called multi-stakeholder working group (MSWG).

EITI implementation of a nation will be judged by an independent validator to determine whether the country can be officially called “obedient EITI”. Once a country officially became EITI-compliant countries, the EITI process should be done every year.

EITI in Indonesia

Waves are demanding transparency in the industry began in late 1999 when Global Witness, an NGO, published a report “A Crude Awakening” on the conflict in Angola where there is embezzlement of state revenues from the oil sector made the country_s elite.

The lack of transparency in the extractive industries sector at that time, especially in poor countries abundant natural resource owners, encouraging international civil society organizations campaigning together “Publish What You Pay” (PWYP) in 2002, took the company to inform the extractive industry payments to the government.

The drive for transparency is being addressed by development practitioners and academics. World Bank to review the practice of the extractive industries, and then Prime Minister Tony Blair launch transparency initiative in the extractive industries (Extractive Industries Transparency Initiative) or EITI, in forum World Summit for Sustainable Development, Johannesburg, 2002.

The following year, the G-8 issued a declaration entitled “Fighting Corruption and Improving Transparency” that prioritizes transparency in the extractive industries.Wave of transparency ultimately creating a global coalition from government, corporations, civil society organizations, investors and international financial institutions.

In Indonesia, the initiative of transparency in revenues from the extractive industry began in 2007 when the then Finance Minister, Sri Mulyani expressed support for the EITI to the representatives of Transparency International Indonesia. Vice Chairman of the Commission at the time, Erry Riyana Hardjapamekas and Deputy Commission for the Prevention of Waluyo reviewing the legal basis for the preparation of implementation. Regulation of the President of the EITI and discussed the Ministry of Energy and Mineral Resources (ESDM).

The next year then Coordinating Minister for Economic Affairs Boediono, leading the coordination meeting for the EITI, and finally in 2010 President Susilo Bambang Yudhoyono signed Presidential Decree No. 26 Year 2010 regarding Transparency Revenues and Revenue obtained from the Extractive Industries.

Fact of EITI

Why was Developed Countries have not entered the EITI extractive industries?

Concentration EITI is the country that has a reliance on extractive industries and weak governance of natural resources (governance) is. In the beginning of 2000s,  countries that implemented EITI were only developing countries mainly from Africa and South America. Today, several G8 country also implement EITI: USA, United Kingdom, and Germany.

EITI in Indonesia

136_thumb_EITI_Report_ProcessIndonesian state officially accepted as a Candidate Country EITI implementing announced on October 2010 in Dar-Es-Salaam, Tanzania in the EITI Board Meeting. The EITI Criteria compliance must be achieved within Indonesia 2.5 (two and a half) years.

In implementing the EITI, the Government of Indonesia is committed to disclose all taxes, royalties and fees received from oil, gas and mining.Companies operating in this sector will publish what they have paid to the government. These figures will be reconciled by an Independent Administrator, in a process overseen by representatives from government, industry and civil society organizations.

EITI requires active participation from a broad stakeholder. Stakeholders are defined as “individuals, communities, groups, and organizations that have an interest in the outcome of EITI, and those who can influence it”.

Multi-stakeholder Group (MSG) includes representatives from government, civil society and the private sector. Indonesia EITI implementation activities currently coordinated under the office of Deputy for Energy, Natural Resources and Environment, the Coordinating Ministry for Economic Affairs. To assist the implementation of EITI in Indonesia has established an office of the EITI Secretariat Indonesia under that agency.

REGULATION OF THE PRESIDENT (Decree) No.26/2010 on Transparency Revenues and Revenue gained from the Extractive Industries signed by President Susilo Bambang Yudhoyono on April 23, 2010.

This is a formal basis for the implementation of EITI in Indonesia with emphasis on the principles of the general welfare, good governance, transparency, sustainable development and the involvement of various stakeholders such as government agencies, NGOs, CSOs and businesses according to the principles and criteria of EITI.

Multi-stakeholder group in Indonesia manifested in a team that is governed by Presidential Decree No. 26 Year 2010, the Transparency Team. Transparency Team consists of the Steering and Executive Team.