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AFRICA: E Guinea ejected from industry clean-up body

by Tom BurgisFinancial Times
April 16th, 2010

A pioneering initiative aimed at cleaning up the oil and mining industries has ejected Equatorial Guinea from its ranks following a board meeting seen as a test of its credibility.

The board of the Extractive Industries Transparency Initiative, a voluntary coalition of companies, governments, donors and civil society groups, had been under pressure from activists as it weighed whether to grant extensions to 17 states that had missed a deadline to have audits of their industries independently verified.

Launched in 2002, the initiative is designed to curb the corrosive effects of mining and oil extraction on poor countries where mineral riches are often found.

Peter Eigen, the initiative’s chairman, told the Financial Times that the board at its meeting in Berlin “applied the rules vigorously” but that Equatorial Guinea “got a fair hearing”.

Under the initiative’s rules, countries may only be granted extensions under “exceptional and unforeseeable circumstances”.

“We found that we had no such circumstances in Equatorial Guinea,” Mr Eigen said.

Activists had accused Equatorial Guinea of seeking an extension despite showing “no political will” to co-operate in the process. The decision to de-list the country will come as a blow to the West African oil producer, where US oil groups including Marathon and ExxonMobil are the leading operators.

After being embroiled in a series of corruption scandals, the government of Teodoro Obiang Nguema, the long-reigning dictator, has spent millions of dollars on Washington lobby groups in an effort to burnish its image abroad.

One of the companies representing the government did not immediately respond to a request for comment.

The EITI has emerged as a boon for countries seeking to attract investment. Liberia – along with Azerbaijan, one of only two nations to reach full compliance under the initiative – has made much of its status as it seeks to rebuild its war-ravaged economy.

The remaining 16 countries were granted extensions, mostly until September.

A request for temporary suspension by São Tomé e Príncipe – a tiny Gulf of Guinea island nation that has yet to start pumping oil – was not granted and it, too, was de-listed.

Some activists said the initiative had done just enough to ward off accusations that it was being too lenient.

However, one person familiar with the situation said civil society groups had questioned whether some countries – among them Peru, Sierra Leone, the Republic of Congo and its vast neighbour the Democratic Republic of Congo – merited the extensions they were granted.

“EITI needs to explain why it expelled some countries that failed to show commitment but extended the candidacies of others whose commitment was also questionable,” said Arvind Ganesan, director of the business and human rights programme at Human Rights Watch, the rights group. The board is expected to publish its minutes once they have been approved by its members.

“[The initiative] has scraped through the credibility test but it seriously needs to raise its game,” said Diarmid O’Sullivan, head of the oil and transparency campaign at Global Witness, a London-based campaign group, and a non-voting member of the EITI board.



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