The implementation of the Extractive Industries Transparency Initiative (EITI) in Guyana will further enhance investor confidence in the country’s oil, gas and mining industries and will provide a framework for full accountability and transparency to all stakeholders, including civil society.
Guyana’s Minister of Natural Resources and the Environment, Robert Persaud, told Business Guyana on Saturday that countries such as Guyana, rich in natural resources, have tended to under-perform economically. These effects are not inevitable and it is hoped that by encouraging greater transparency in these resources, some of the potential negative impacts can be mitigated.
“The benefits for implementing countries include an improved investment climate by providing a clear signal to investors and international financial institutions that the government is committed to greater transparency. EITI also assists in strengthening accountability and good governance, as well as promoting greater economic and political stability. This, in turn, can contribute to the prevention of any potential conflict based around the oil, mining and gas sectors,” he said.
Guyana, with its rapidly expanding natural resources sector, committed to engaging EITI following a meeting on Friday, April 20, with the country’s President, Donald Ramotar, Minister Persaud, and EITI Head of Secretariat, Jonas Moberg.
The benefits to companies and investors, Persaud said, centre on mitigating political and reputational risks. Political instability caused by opaque governance is a clear threat to investments. In extractive industries, where investments are capital intensive and dependent on long-term stability to generate returns, reducing such instability is beneficial for business.
“Transparency of payments made to a Government can also help to demonstrate the contribution that their investment makes to a country. The benefits to civil society come from increasing the amount of information in the public domain about those revenues that governments manage on behalf of citizens, thereby making governments more accountable,” he pointed out.
The Extractive Industries Transparency Initiative (EITI) is a global transparency standard implemented in 35 countries. The EITI was launched by the UK government in 2002 and has grown into a multi-stakeholder standard, with strong support from civil society and the world’s largest oil, gas and mining companies.