The UK Government hosted the second high level international conference on Extractive Industries Transparency Initiative took place in Queen Elizabeth II Conference Center, London on 17 March 2005. The Conference which followed on from the first high level Lancaster House meeting of 17 June 2003 brought together some 300 representatives from international financial institutions, governments of about 40 countries, extractive industries and civil societies.

The main purpose of this year’s conference was to examine the progress in EITI implementation so far. It also provided an opportunity to consolidate and strengthen the international partnership of government, industry and civil society supporting EITI. Delegates warmly welcomed the encouraging progress that had been made by several countries to improve transparency in the management of oil, gas and mining revenues, noting in particular work of the four countries who piloted EITI- Azerbaijan, Ghana, the Kyrgyz Republic, Nigeria, they also pointed out the support given to EITI by companies, investors, non-governmental organizations, international organizations and by other countries.

Opening the conferencePresident of World Bank Mr. James Wolfensohn statedthat Transparency is fundamental to good governance and an essential starting point but it does not do the trick alone. It reduces the potential for waste, mismanagement, and corruption; fosters democratic debate on the use of revenues; and enhances macroeconomic management. He also argued that World Bank is not going to make investments in countries where EITI is not part of the process.

In hiswritten address to the conference participants Prime Minister Blair statedthat great progress had been made since the Lancaster House Conference in June. He particularly commended achievements of pilot countries Azerbaijan, Ghana, the Kyrgyz Republic, Nigeria. The Prime Minister also emphasized that their experiences had allowed to learn a great deal about successful implementation. He hoped this year many more countries will formally sign up to the Initiative, and will begin implementation.

A number of countries used the Conference as an opportunity to announce their plans to implement EITI and what had been achieved so far.The head of Azerbaijani delegation, Executive Director of The State Oil Fund and Chairman of The National Committee on EITI, Mr. Samir Sharifov informedthe conference participants about the EITI implementation process in Azerbaijan, which resulted in disclosure of the first ever transparency initiative report in the world . Mr. Sharifov also emphasized Azerbaijan’s readiness to share its relevant experience in EITI with other resource rich countries.

The Governments of Niger and Cameroon announced that they would now begin implementation of the Initiative. The Governments of Equatorial Guinea and the Democratic Republic of Congo also announced their commitment to the EITI Principles and will now consider how to move to full implementation. Several countries and international organizations including the United Kingdom, France, Norway, the United States of America, the International Monetary Fund, the World Bank, and the European Bank for Reconstruction and Development agreed to increase financial and technical support for EITI.

In conclusion, the Conference agreed a set of criteria and guidelines for implementing countries and companies, and endorsed the EITI Source book as guidance for countries and companies interested in supporting the initiative. The United Kingdom announced the formation of an International Advisory Group, which will develop an approach to the future management of international EITI support, incentives for implementation and a suitable process for validating implementation.

Moreover, participants expressed their confidence that EITI will continue to expand participation, and to broaden, deepen and strengthen implementation, in keeping with its voluntary nature. In close coordination with the international advisory group, EITI should proceed with further work to define and refine proposals on increasing revenue transparency in the extractive industries as part of the international effort to promote improved budget transparency and sound financial management and accountability. The next EITI Conference will take place in March 2006. By that time, participants will have agreed: an approach to the future management of international EITI support which recognizes specific country circumstances, builds on existing institutions and is sustainable; incentives for implementation where appropriate; and a suitable process for evaluating implementation.