Remarks on the Extractive Industries Transparency Initiative (EITI)

Good morning. Thank you. It is an honor to be here in this beautiful city. We are all here in a joint effort to make EITI a successful initiative with lasting impact. A lot of hard work has gone into EITI, and like other speakers, I‘d like to thank a few standouts.

First, the Government of Norway, from Prime Minister Stoltenberg to Foreign Minister Store on down, for not only hosting this event, but for epitomizing throughout the globe what EITI stands for -- good governance through transparency, particularly in the energy sector.

Second, the United Kingdom, particularly the Department for International Development, which has done so much to spearhead EITI and bring it to where we are today.

Third, thank you to the World Bank and other international financial institutions. Speakers today have been talking about a “triangle” of government, private sector, and NGOs that work to make EITI and other similar initiatives successful, but the appropriate metaphor is really a “square”, the fourth component being the IFIs.

Finally, special thanks to Peter Igen, whose energy and vision have done so much to make EITI a reality.

One of the important themes that came out of yesterday’s meeting was that “we have come a long way” not only in terms of EITI - which is only 4 years old - but also in terms of anti-corruption and good governance in general. Simon Taylor mentioned people laughing about this idea in 1997 -- they don’t now. While we certainly have much, much more work to do and while we certainly should not rest on our laurels, I am a firm believer that it is not only okay, but important to step back and recognize progress.

Not too long ago -- as recently as the 1970s, and even 1990s -- many in the international community took a rather benign view of corruption. The IFIs and others accepted corruption as part of doing business in the developing world, and developed world countries in some cases encouraged corruption by allowing tax deductions for bribes. This has all changed. No one seriously accepts such views today. Why? I would argue it’s due in large part to the courage and leadership of individuals and organizations represented in this room who have spoken out -- some risking their lives -- and laid bare the truth about corruption.

What is this truth? Many people yesterday put it in words much more eloquent than I can. “A curse”; “demoralizes societies”; “ruins economies”; “is the ‘#1 killer of development’”; “destroyer of freedom”; “inciter of civil war.” This is powerful stuff, this list of horribles. And so we have come together to move forward EITI and tackle corruption together.

The U.S. government strongly supports EITI. There is simple but powerful elegance to this initiative - make payment and revenues in extractive industries sectors transparent, and we can do much to prevent the list of horribles I just mentioned. But, as impressive as EITI is, it is obviously only part of the solution to issues of good governance, transparency and anti-corruption. We view EITI not as an isolated initiative, but as one that complements a variety of efforts and initiatives in the critically important area of promoting good governance globally.

A watershed in terms of these government initiatives occurred in 1977 when many still thought corruption was okay. The U.S. government enacted the Foreign Corrupt Practices Act, making it illegal -- a criminal offense -- to bribe foreign officials to obtain or retain business. And we have strongly encouraged others to do the same under similar laws. For example, the U.S. has strongly supported the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions/Peer Review Process. This is all part of a broader U.S. effort to highlight the importance of anti-corruption and good governance strategies and move these initiatives forward internationally.

I’d like to provide a few examples of how the U.S. has begun implementing the commitments we made at the G8 Summit in St. Petersburg. We recently launched a Global Kleptocracy Initiative whereby: our Justice Department prosecutes Kleptocrats -- grand scale corrupt officials; our Treasury Department denies safe haven for stolen assets, working with international financial centers; and we at the State Department revoke visas of corrupt officials while encouraging others to adopt similar policies. Since 2000, we have successfully led efforts to develop anti-corruption and transparency initiatives in all the key international economic organizations in which we participate, including OECD, G8, APEC, and Summit of the Americas.

The numerous bilateral investment treaties and free trade agreements we have negotiated over the past six years have strong transparency and anti-corruption provisions. Our Millennium Challenge Account initiative has dramatically increased U.S. foreign assistance for those countries that among other things have effective anti-corruption policies. In October of 2006 the U.S. Senate ratified the UN Convention against Corruption.

So, as I mentioned, the U.S. views EITI as an important component to a broad array of anti-corruption and good governance initiatives. The key question for us to consider is how to make EITI and other anti-corruption and transparency initiatives more effective. Many of you have been thinking about this question far longer than I have, but I’d like to suggest three factors to consider.

First, anti-corruption and transparency initiatives are one part of a broader strategy with a broader goal. Paul Wolfowitz yesterday started his speech by asking, “why are we here?” The answer is to reduce global poverty for those who are most vulnerable. Therefore, EITI and other transparency and anti-corruption initiatives must be incorporated with other policies, such as those encouraging private sector-led growth and debt relief to achieve this important goal of poverty reduction.

Second, we need to develop broad stakeholder constituencies. EITI, “the curious coalition” as one speaker yesterday called it, has done this remarkably well by bringing together governments, private sector, civil society, and IFIs, and is truly a model in this regard. Developing these diverse constituencies takes time, but this is ultimately the power behind this initiative.

Third, and most importantly, participant countries must be the true owners of EITI; without such ownership, EITI will have limited success. Last night I spoke with Nigeria’s Education Minister, Obi Ezekwesili, and told her how moved I was by her speech because there was no doubt she owned EITI and other anti-corruption initiatives.

If we consider these three factors: integrating EITI as part of a broader poverty reduction goal, broad stakeholder constituencies, and local ownership, we will be on our way to lasting and successful EITI accomplishments. The U.S. looks forward to moving EITI ahead with all the stakeholders gathered here today.