Progress, Partnerships and Transparency
Peter J. Robertson, Vice Chairman
Oslo, Norway, Oct. 16, 2006
On behalf of Chevron, let me express our appreciation to our hosts in the Norwegian government for their hospitality as well as their strong commitment to promoting transparency. I think I speak for everyone in the room in saying we share that goal.
We have good reason to celebrate today. We've made a tremendous amount of progress over four short years.
First and foremost, credit is due to the countries who have been the pioneers. By its very nature, Extractive Industries Transparency Initiative (EITI) must be a voluntary, country-led initiative. EITI's credibility as a long-term initiative rests on the participation of countries.
Thus, we owe much to the governments of Nigeria and Azerbaijan for being the first countries to implement the EITI framework. President Obasanjo and Energy Minister Aliyev, Minister Ezekwesili and Director Movsumov, I salute you for your leadership.
I am delighted, too, that Kazakhstan has made a strong commitment to transparency. I know I speak for all of us that we look forward to EITI implementation there. Minister Izmukhambetov, Deputy Minister Akchulakov, congratulations for Kazakhstan's leadership.
Credit also goes to the International Advisory Group (IAG). Drawing on the power of a shared vision and voluntary collaboration, it has brought together a disparate group of interests and found common ground. We have found this common ground because governments, industry, civil society organizations and investors all recognized the benefits of transparency.
Back in 2002, we had little more than a concept and the shared recognition that transparency could help create a stable, long-term investment climate. We committed to the simple proposition of promoting transparency through the public disclosure of payments made by companies and revenues received by countries. We each saw this as an important pathway to improved governance.
The simplicity of that founding principle belied the complexity of the process that lay ahead.
IAG members — with different perspectives — sat down with a determination to find mutual understanding and to create a pragmatic way to implement the simple principle of transparency. The IAG worked through a difficult slate of issues to develop the Final Report. There have been tough debates. But the IAG succeeded because the debates were rooted in a genuine commitment to make progress on transparency.
The IAG partners are justified in feeling a great sense of satisfaction — for three achievements in particular.
First, building on the EITI principles and criteria, we now have the IAG final report.
Second, EITI has now agreed on a validation process. This process is central to EITI's future success. The validation guide provides necessary safeguards for protecting the interests of all stakeholders. It will highlight whether countries and companies are doing what they say they are doing.
The third achievement is the way in which this progress has occurred — by consensus of all the parties. This has not been easy, nor did we expect it to be, given the complexities of the underlying issues.
Consensus as a decision-making model can be difficult and time-consuming. Despite those inherent complications, we believe it is absolutely necessary for a voluntary organization like EITI to reach decisions through consensus. During EITI's development, consensus fostered frank and honest debate and, ultimately, a stronger outcome.
So, we have much to be proud of in only four short years. We've succeeded in getting disparate groups to the table to create a united effort to promote revenue transparency. We've succeeded with the validation guide in outlining tools and processes to implement EITI. And we've done all this through consensus decision-making.
While we feel a sense of accomplishment, we all recognize that more needs to be done. To be effective we have to stay focused, and we need to have clearly aligned priorities.
Let me offer my perspective on those priorities. EITI's immediate aim should be to ensure successful implementation of transparency in all countries that have already committed to transparency and the EITI process.
Success breeds success. And demonstrating that transparency works in these countries is the strongest single factor that will attract new members. Our objective should be to progress to the point that the benefits of inclusion and participation are self-evident.
A second priority should be expansion of membership. The fundamental fact is that EITI will gain greater credibility if it can attract additional member countries. Much valuable work has been done to promote a greater understanding of the benefits of participation in EITI. But more remains to be done.
There still remains skepticism about whether EITI, through transparency, will lead to improved governance. This isn't surprising, given the organization's newness and structure. Though aligned around a common goal, many of us haven't previously worked together toward a common objective.
It is an innovative partnership that still needs to prove itself.
But rather than dismissing our skeptics, we need to learn from them. We need to further our understanding of how we can clarify the objectives of EITI, how we can continue to bring clarity and simplicity to our own decision-making and work process, and how we can make EITI more inclusive. EITI can only achieve its true potential when it attracts the widest membership of producer countries and all companies operating in those countries.
We have a significant number of country members, all of which, I believe, are represented here today. But let us be frank. We still have a good distance to go before we can claim that we are truly a global initiative.
If in a few years we do not see more of the major producing countries committed to EITI, we will have to step back and seriously assess whether our EITI initiative has real global momentum.
And the third and most important priority is determining the scope and governance of EITI. With regard to scope, EITI's role and decision rights need to be absolutely clear and accepted.
In addition, the requirements and expectations that accompany participation must be transparent to existing and potential members. As we reach out to new members, it must be clear to them that EITI is a voluntary initiative dedicated solely to promoting revenue transparency.
It must also be clear that we respect the sovereign rights of participating countries and the sanctity of commercial contracts as enshrined in the EITI principles.
And this is a widely held view. The G8 leaders explicitly affirmed this vision of EITI in both 2003 and 2004. Individual countries must determine the appropriate remedies to address shortcomings. EITI should serve as a tool to encourage and foster improvements rather than admonishing participants.
Getting this definition of scope right for EITI is important, so that the initiative will stay focused on its core mission. Once we have clearly defined and articulated scope, then we can turn to governance.
So far, we have successfully applied the rule of consensus. We need to think long and hard about moving away from an approach that has served us so well.
So, to recap, we believe that the priorities for EITI going forward are very clear: the successful application of transparency in existing member countries, expanding our membership and defining scope, and designing a governance model that is attractive to new members.
This will be hard work but, in my company, we have learned from a great deal of trial and error that all projects benefit immensely from rigorous and thorough initial planning. This is the point at which the greatest value can be created.
We call this front-end loading and we've learned that the more successful we are in building the right foundation, the more successful we'll be in the long run.
So, let's define success for EITI.
I see that as when multiple producing countries — many more than we have today — will have achieved and documented revenue transparency. This will have brought them enhanced reputations, with access to greater global investment flows. This, in turn, will have improved their economies and their standards of living.
Let me express my company's appreciation for all those who have worked so hard to make the IAG successful. As oil and gas industry representatives serving on the IAG, Chevron and BP have worked closely with a larger industry group for guidance. And I know other constituencies have also reached out to secure input for the IAG.
Consultation and cooperation are at the heart of our progress. Chevron is pleased to have worked alongside so many of you during the past year.
My comments today are rooted in Chevron's deep commitment to the central purpose of EITI — promoting transparency through the public disclosure and comparison of payments made by companies and revenues received by countries — and we are committed to the success of this coalition.
These measures deserve your support, and this mission deserves our best efforts, now and for years to come.
Published: October 2006