Beneficial Ownership Transparency – Assessing Funder Contributions

In 2011-2012, a critical evaluation of EITI concluded that demanding revenue transparency fell short of achieving full transparency of the extractive industry’s value chain. The evaluation findings were accepted by all constituents of the EITI ranging from governments, to businesses, and civil society. Civil society organizations and coalitions, such as Publish What You Pay, Open Government Partnership, Global Witness, Natural Resource Governance Institute (known as Revenue Watch at the time), OpenOil, and OpenCorporates, among others stepped up as leaders to advocate for beneficial ownership transparency (BOT) as part of the broader movement for open and accountable management of natural and public resources.

During this time, there was an increased commitment to transparency by governments, such as the UK and Ukraine, against the backdrop of escalating anticorruption and tax justice movements worldwide.

The standard for beneficial ownership was first introduced to the EITI board in 2013 as a response to the critical evaluation, but did not translate into a clear commitment until 2016. Over the years leading up to the commitment, civil society organizations produced technical briefings, commissioned research, and publicized investigative journalism to increase awareness of the implications of beneficial ownership opacity in the extractive sector. Civil society leaders within EITI built relationships with individual champions across constituencies to form alliances and build consensus. Key moments of converting unlikely allies (e.g., the EITI representative from the Democratic Republic of Congo) were noted as critical moments to cultivate a “coalition of the willing” and change opinions. The combination of cross-constituent alliances, strategic coalitions of civil society organizations with complementary strengths and technical expertise, a conscientious effort to bring in community voices, growing evidence, increased global pressure, and supportive EITI leadership resulted in consensus for the EITI standard in 2016. All member countries were given a deadline to engage multistakeholder groups and submit an actionable roadmap of how they would meet the requirement by 2020.

• Grantee partners noted that donors contributed to building the field of beneficial ownership in civil society, mobilizing coordination to achieve the EITI standard requirement.
• Core funding allowed groups like Global Witness and NRGI to pursue long-term global reform efforts and to undertake timely, relevant interventions in dynamic country circumstances (both of which are essential for complex issues like BOT)
• Grantee partners emphasized the importance of long-term funding from donors, which was highly unusual compared to other civil society campaigns

• EITI requirement helped push forward the 5th Anti-Money Laundering Directive in the EU
• Built an evidence base for future legislation in other context
• Most BO reforms have included significantly more than just policy change, including CSO and government capacity development, increased multi-stakeholder dialogue on corruption risks, stronger regulations, and increased academic research and media analysis of corruption risks linked to hidden beneficial ownership

The EITI standard, required to be met by 2020, expanded beneficial ownership transparency for companies working in extractives sectors in 53 countries. The requirement mandated all member countries to develop roadmaps for either public registers or information included in EITI reports. EITI requirements have sparked reform in 20 countries now working on establishing public registers. BOT is regarded as one of the most legally complex issues that EITI has taken on, and grantee partners attribute the success of the outcome to the strategic coordination among civil society organizations, which is heavily enabled by long-term commitment from donors.

In a multi-stakeholder initiative like EITI, consensus was necessary to pass the requirement. Coordinated civil society coalitions leveraged technical expertise and evidence to build a “coalition of the willing” (strong allies across constituencies) and persuade others. Smaller, incremental changes were necessary to demonstrate early successes (e.g., pilot initiatives) before building consensus for a standard requirement. However, the downside to widespread consensus is the lack of customized solutions across different contexts.