Benefits from implementing EITI
Most countries rich in oil, gas, and minerals have not done as well as they should have from their resources. Many have suffered from poor governance, under-performed economically and had a higher incidence of conflict. These effects are not inevitable and it is hoped that by encouraging greater transparency in countries rich in these resources, some of the potential negative impacts can be mitigated.
Benefits for implementing countries include an improved investment climate by providing a clear signal to investors and international financial institutions that the government is committed to greater transparency. For a relatively low cost, EITI also assists in strengthening licensing, record keeping and tax collection systems, and legal and fiscal frameworks. The EITI national platforms for accountability improve reforms and governance, as well as promoting greater economic and political stability. This, in turn, can contribute to the prevention of conflict based around the oil, mining and gas sectors.
Benefits to companies and investors include mitigating political and reputational risks as well as creating a level playing field in countries of operation. Political instability caused by opaque governance is a clear threat to investments. In extractive industries, where investments are capital-intensive and dependent on long-term stability to generate returns, reducing such instability is beneficial for business. Transparency of payments made to a government can also help to demonstrate the contribution that their investment makes to a country.
Benefits to civil society come from increasing the amount of information in the public domain about those revenues that governments manage on behalf of citizens, thereby making governments more accountable.