EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE

UNCLAS SECTION 01 OF 05 DOHA 000150

SENSITIVE
SIPDIS

H PASS TO SFRC STAFF MEMBER JAY BRANEGAN

E.O. 12958: N/A
TAGS: ENRG EPET EINV EMIN EAGR QA AJ CH IN JA LI
TZ, RS
SUBJECT: EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE
GAINS MOMENTUM WITH QATAR-HOSTED CONFERENCE

REF: DOHA 128

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(U) KEY POINTS
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-- Qatar hosted the fourth global conference of the
Extractive Industries Transparency Initiative (EITI) Feb.
16-18, 2009. EITI is a voluntary coalition of countries,
companies and civil society organizations that seeks to
improve revenue transparency in the extractives sector. EITI
has made progress in the two years since the last conference
and now is being adopted in 26 countries.

-- Liberia's President Ellen Johnson Sirleaf, energy
ministers from Iraq and Qatar, and senior business leaders
made strong expressions of support for EITI. A diverse group
of representatives from governments, the private sector, and
civil society attended; however, despite USG and GOQ efforts,
China, India, and Russia were absent from the event.

-- Azerbaijan was approved as the first EITI compliant
country and Tanzania became the 25th EITI implementing
country. Japan announced that they will become an EITI
supporting country. The EITI also ratified a formal
governance structure and approved a new Board.

-- Opening the conference, Qatar's Energy Minister Abdullah
Al-Attiyah announced his country was considering joining EITI
as an implementing country, and that Qatar Petroleum may join
as a supporting company. Doing so would make Qatar the first
Gulf country to join EITI.

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(SBU) COMMENT
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-- The USG is an active supporter of EITI and sees it as an
important part of our anti-corruption and energy security
strategies. The 400 delegates from dozens of countries

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attending the meetings indicate that support continues to
build for EITI around the world.

-- Azerbaijan became the first EITI compliant country,
demonstrating that the initiative is making progress. 21
other implementing countries have until March 2010 to become
compliant. There is an EITI buzz among countries with
significant extractives sectors, and among the international
representatives who work with and lend to those countries
(e.g., the World Bank). International energy companies are
supportive of the initiative, as they see it as fostering
stable political environments. Donors also see EITI as
increasing confidence that their money is used effectively,
because increased transparency contributes to less corrupt
practices.

-- The U.S. seeks to increase awareness of the initiative and
strengthen bilateral engagement beyond EITI implementing
countries, particularly with emerging economies like India
and China. Interested missions can increase their knowledge
of EITI by accessing the EITI website: www.eitransparency.org
or by contacting EEB/ESC David Henry.

-- Qatar's hosting of this conference, without formally
committing itself to the initiative's principles, reflects a
certain dichotomy on the part of Qatar's Energy Minister. On
the one hand, he is believed to be personally committed to
stamping out corruption in Qatar and helping clean up the
energy sector worldwide. On the other hand, he may be
uncomfortable with the level of transparency suggested by
full compliance with the EITI principles.

-- Qatar's becoming an EITI implementing country would give
the initiative strong backing from the world's leading
oil-producing region.

-- However, whether Qatar will ultimately open its books, and
whether a viable multi-stakeholder group can be assembled in
Qatar (as called for by the initiative's validation process)
when there is not a single true NGO and little civil society,

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is another issue. In the meantime, Qatar hopes for
commercial benefit from being seen to support international
standards on transparency.

End Key Points and Comment.

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Conference Results
--------------


1. Qatar hosted February 16-18, 2009 the Fourth Global
Conference of the Extractive Industries Transparency
Initiative (EITI),attended by 400 delegates from 80
countries. The conference was officially opened by Qatar's
Deputy Prime Minister and Minister of Energy and Industry
Abdullah Al-Attiyah (standing in for the Amir),President of
Liberia Ellen Johnson-Sirleaf, President of Shell Jeroen van
der Veer, Open Society Institute Director George Soros, and
EITI Chairman Peter Eigen, all of whom gave strong
expressions of support for the initiative. The USG
delegation was led by EEB/ESC Deputy Assistant Secretary Doug
Hengel. Senate Foreign Relations Committee staff member Jay
Branegan also attended. Despite USG and GOQ efforts, China,
India, and Russia declined to attend or send observers.


2. At the Doha meetings, Azerbaijan was certified as being
the first EITI Compliant country, having successfully
completed EITI's validation process. EITI adopted a more
formal governance structure and a new EITI board was elected
in which the U.S. serves as an alternate. Tanzania was
admitted as an EITI candidate country and will have until
February 2011 to fully implement EITI. Japan expressed its
intention to become an EITI supporting country.


3. Iraq's Oil Minster gave a strong expression of support for
EITI and reiterated Iraq's intention to become an EITI
implementing country.


4. Representatives of the Publish What You Pay Coalition (a
collection of NGOs) used the conference to promote the

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Extractive Industries Transparency Disclosure Act, proposed
U.S. legislation that would require U.S.-listed companies to
report their country-by-country payments with the Securities
and Exchange Commission.

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Qatar Considering Joining the Initiative
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5. During his keynote address at the conference opening,
Deputy Prime Minister and Minister of Energy and Industry
Abdullah Al-Attiyah announced that Qatar is considering
becoming an implementing country of the EITI, and Qatar
Petroleum may join EITI as a supporting company. (Note:
Doing so would make Qatar the first Gulf country to join
EITI). From the Arab world, Yemen is a candidate country and
Iraq is in the process of becoming an EITI candidate. Qatar
also provided substantial financial support for the
conference.


6. After his prepared remarks, Al-Attiyah spoke energetically
about the need for transparency in the economic sector.
Referencing the financial crisis, he skewered rating agencies
for their inability to report accurately on the health of
financial institutions. Al-Attiyah appears to believe that
increasing transparency in Qatar will help support the Amir's
vision of developing the country's economy beyond oil and
gas, by attracting diverse investments which will help build
human capital. Al-Attiyah noted that commodity-based
economies tend to support "gold-rush" investment, and Qatar
"does not want to be a ghost country." (Note: See reftel for
Al-Attiyah's private comments on the initiative to DAS
Hengel.)


7. Following this conference, Qatar will host in November the
Sixth Global Forum Ministerial on Fighting Corruption and
Safeguarding Integrity, and the Conference of States Parties
to the UN Convention Against Corruption.


8. EEB has cleared this cable.

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LeBaron