Catalysing transformative change in beneficial ownership transparency

  • Publication date: 01 September 2020
  • Authors: Open Ownership, Extractive Industries Transparency Initiative (EITI)

Executive summary

The Extractive Industries Transparency Initiative (EITI) and Open Ownership (OO) are partnering to develop and deliver Opening Extractives, a new global programme to bring about transformative change in the availability and use of beneficial ownership (BO) information for effective governance of natural resources across the value chain. In order to inform the design of this programme, which the organisations have been invited to submit as a proposal to the BHP Foundation, EITI and OO conducted primary and secondary research to ensure that the assumptions upon which the programme was being designed are valid, and to collect additional evidence to complement the knowledge and experience of both organisations.

The two main research objectives were to determine the process and criteria for selecting countries for the programme, and to understand the priorities, needs and demands of stakeholders involved in BO reform to inform the design of support services offered in the programme. Following a review of internal resources, data was collected by the EITI and OO research team, conducting 13 interviews with practitioners in six implementing countries, and an additional seven interviews with international beneficial ownership transparency (BOT) experts. Both EITI and OO wish to thank all those who volunteered their time to participate in the research, which due to the coronavirus crisis was conducted remotely, using digital collaborative tools.

The research highlights that implementing BOT in the extractive industry is challenging and complex, and the demand for technical assistance to overcome and break down these complexities is currently far larger than the supply. There is a complex political economy of incentives around the implementation of BOT that needs to be understood on a country by country basis. Despite the COVID-19 pandemic, which has caused delays whilst also providing new opportunities for engagement, the research underscored the timeliness and relevance of the new Opening Extractives programme.

The main implications for the design of the programme are that the aspects that make up political will should be factored into the programme design. One approach the programme could use to mitigate the risks associated with political will is to employ a ‘funnel’ approach to country selection. This involves commencing with small interventions in a larger number of countries, and using these to conduct initial scoping and assess political will. The findings and impact of initial interventions then inform decisions about scaling up interventions in a more limited number of countries.

The research found that it is not practicable to identify typical paths to implementation. The main implication for the programme’s technical assistance offering and beneficiaries is that support services are best designed as a menu. Whilst government is the primary beneficiary of interventions to advance BOT reforms, the programme should treat civil society and industry as primary beneficiaries due to the fact that CSOs and industry play a critical role as intermediaries and catalysts in implementation.

Overall, it appears that at the time research was conducted (May-July 2020), the coronavirus crisis caused delays to implementation in some countries whilst also creating new incentives for implementation in other countries. The programme will need to apply a “COVID-19 lens” to its design, and assess on a case by case basis how this affects both the country selection criteria as well as individual implementers and their paths to implementation. Whilst this research has shed some light on early and short-term impacts of COVID-19, there remain uncertainties in the long-term. The programme should build in continuous monitoring and analysis of the impact of COVID-19 on implementation.

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