Financial institutions with exposure to oil, gas and mining companies are putting pressure on the Canadian government to implement the Extractive Industries Transparency Initiative (EITI), a global reporting standard created to ensure that the immense wealth generated by the global extractive sector is handled more responsibly and distributed more equitably. Through the EITI, companies disclose payments to governments, which in turn disclose what they receive from companies. These figures are then reconciled during a multi-stakeholder process.
Last November, 17 of these financial institutions – managing a total of about US$75 billion in assets – sent the federal government a statement urging it to implement the EITI domestically, and to legally require more financial disclosure from Canadian companies, as the United States has done through the Dodd-Frank Wall Street Reform and Consumer Protection Act. “Although the initial focus of EITI was on emerging economies,” the statement reads, “it is increasingly relevant to developed countries as the extractive industry becomes more globalized.” It goes on to argue that the federal government’s implementation of EITI would both enhance the credibility of the initiative as well as “allow for a more informed public debate over the value of resource extraction in Canada.”
Canada is the largest financial donor country to the EITI, and national institutions already follow the spirit, if not the letter, of the EITI, says Line Prud’homme, spokesperson at Natural Resources Canada: “Canadian federal, provincial and territorial legislation and regulations, and applicable policies and rules of Canadian stock exchanges, combined with parliamentary and legislative reporting, already promote a high level of transparency and accountability – meeting or exceeding, in every instance, the goals of the EITI.” The precedent, however, is there; Norway is an EITI-compliant country, following its implementation of the financial reporting initiative and the independent validation of its practices.