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 DOHA 00000150 001.7 OF 005 -------------- (U) KEY POINTS -------------- -- 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. -------------- (SBU) COMMENT -------------- -- 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 DOHA 00000150 002.4 OF 005 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, DOHA 00000150 003.4 OF 005 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. -------------- 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 DOHA 00000150 004.4 OF 005 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. -------------- Qatar Considering Joining the Initiative -------------- ¶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. DOHA 00000150 005.4 OF 005 LeBaron