Lessons for an accountable transition: Leveraging beneficial ownership information for natural resource governance


Experience in the extractive sector has generated lessons that can be used in other sectors and to support integrity in the energy transition.

The race to phase down fossil fuel production in line with COP28 commitments, [1] secure transition minerals such as lithium and cobalt, and invest in renewable energy technologies is essential to mitigating climate change. Annual investment in clean energy must reach USD 4.5 trillion to limit global warming to 1.5 degrees Celsius above pre-industrial levels. [2] At the same time, the rapid pace of investment in resources required to support the transition is heightening corruption and governance-related risks.

Experience in the extractive sector has shown that a lack of solid accountability mechanisms has facilitated countless cases of corruption and fraud. Large investments in and revenues generated from finite resources make the extractive sector particularly vulnerable to corruption, fraud, tax evasion and other illicit activities such as illegal mining and deforestation. Yet, with solid measures in place, responsible natural resource governance can lead to positive effects, including revenue generation, job creation and quality delivery of essential energy services.

This report uses cases in countries from Armenia to Zambia to show how information on beneficial owners – the people who ultimately own, control and benefit from companies and other corporate vehicles – has unlocked action to support integrity and accountability throughout the extractives value chain. It draws on experiences gained through the Opening Extractives programme, which has been accelerating the availability and use of beneficial ownership data in resource-rich countries since 2021, to highlight lessons that can be used in other sectors and to support integrity in the energy transition. [3]

First, the report details how information on beneficial owners can be used by licensing and contracting agencies to inform decisions on which corporate vehicles can hold a participating interest in an oil, gas or mining exploration or production license or contract. Examples of major risks that can be detected at this stage of the value chain include ownership concentration, conflicts of interest and the deliberate avoidance of criteria.

The report then highlights the importance of effectively managing extractive revenues, including for national development, and especially in contexts of rising levels of debt distress. Requiring the disclosure of beneficial ownership information and enabling its use at various stages of the extractives value chain is a key measure governments can take to improve integrity safeguards and support public financing. In doing so, they support government agencies, companies, investigative journalists and civil society to prevent opaque corporate structures from being used to hinder integrity and accountability.

While significant progress is still needed to ensure this information is effectively collected, published and used to the fullest extent to strengthen safeguards in the regulatory governance of the extractive sector, advances in transparency norms and in their application have generated valuable lessons. This report offers a set of actionable steps for policy makers and public agencies to take in order to improve the availability of beneficial ownership data and its use to take action for accountable natural resource extraction as the energy transition progresses.

Information on the people who ultimately own, control and benefit from corporate vehicles unlocks action to support integrity and accountability throughout the extractives value chain.

[1] United Nations Climate Change (no date), “COP 28: What Was Achieved and What Happens Next?”. Retrieved from: https://unfccc.int/cop28/5-key-takeaways.

[2] International Energy Agency (2023), Net Zero Roadmap: A Global Pathway to Keep the 1.5 °C Goal in Reach, p. 15. Retrieved from: https://iea.blob.core.windows.net/assets/4d93d947-c78a-47a9-b223-603e6c3fc7d8/NetZeroRoadmap_AGlobalPathwaytoKeepthe1.5CGoalinReach-2023Update.pdf.

[3] See: EITI and Open Ownership (2024), Opening Extractives: Progress Report 2022/23. Retrieved from: https://oo.cdn.ngo/media/documents/oe-progress-report-2022_23-2024-02.pdf.

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