The process of becoming compliant to the World Bank’s Extractive Industries Transparency Initiative (EITI) will make the Indian Ocean archipelago of Seychelles more visible to potential oil and gas investors and prevent corruption. This is the view of Ilhem Salamon, a senior oil and gas expert at the World Bank, who has been involved in the Seychelles’ compliance process since the island nation was accepted as an implementing member of the EITI standard in August last year.
Salamon and her colleague Gael Gregoire, a senior policy officer for the Environment, Social and Governance department at the International Finance Coporation, a subsidiary of the World Bank, met with members of the local press last week to answer questions about the EITI process. Seychelles joins 45 other EITI countries worldwide which are required to extensively disclose revenues from extractive industries and efforts taken to improve accountability in the exploitation of oil, gas and minerals.
Seychelles is required to publish its first annual EITI report by February 6, 2016, which will disclose all revenues and payments received from oil companies thus far. Although no hydrocarbons are currently being extracted from beneath the waters of the 115-island archipelago’s vast Exclusive Economic Zone (EEZ), there are three companies currently prospecting for oil, and another two companies applying for exploration licenses.
“EITI can also be used to attract private investors,” she said. “I can imagine that if I am a major oil company, just the prospect of doing petroleum development in Seychelles would be scary, because you don’t know how much civil society opposition you’re going to face, you don’t know if their position is going to be rational or irrational.”
Salamon added that using the EITI framework to look for good investors in the oil sector was an objective used by many countries in Eastern Europe and Latin America.
90 major oil and gas companies and 45 countries are members of the EITI, and Salamon said it was because it was simpler for them to make a decision to operate in a country which already has a platform with all the relevant stakeholders to engage in dialogue and negotiation as well as a booklet with all the laws, regulations and requirements set down by each member country.
The Extractive Industries Transparency Initiative (EITI) is a global Standard to promote open and accountable management of natural resources. It seeks to strengthen government and company systems, inform public debate, and enhance trust. In each implementing country it is supported by a coalition of governments, companies and civil society working together. Natural resources, such as oil, gas, metals and minerals, belong to a country’s citizens. Extraction of these resources can lead to economic growth and social development. However, when poorly managed it has too often lead to corruption and even conflict. More openness around how a country manages its natural resource wealth is necessary to ensure that these resources can benefit all citizens. Countries implementing the EITI disclose information on tax payments, licenses, contracts, production and other key elements around resource extraction.