Summary
The multi-stakeholder approach is central to the principles and operations of the EITI, and it is reflected in how the EITI is governed and implemented. EITI implementing countries establish a multi-stakeholder group (MSG) – comprised of representatives from government, companies, and civil society – to oversee EITI implementation. Although the mandate of the MSG varies across countries, it is the main decision-making body. It is responsible for setting objectives for EITI implementation and monitoring the disclosure of data in accordance with the EITI Standard, and it ensures that the data and analysis stemming from EITI reporting contributes to public debate and informs decision-making.
The EITI MSG is a crucial decision-making space for stakeholders to influence and shape decisions on natural resource governance in their country, and thereby provides opportunities for participation from a wide range of actors. EITI implementing countries should ensure that MSG nomination, selection and renewal procedures are in place to ensure inclusive participation and representation of all interested stakeholders. Doing so will help create conditions for a broader and more inclusive management of natural resources for the benefit of all citizens.
The MSG mandate must be clearly defined for a country to be accepted as an EITI implementing country and is critical for EITI implementation. While the MSG is mandated to determine the rules and procedures regarding its own work and decision-making, the EITI Standard contains minimum requirements related to the role, rights and responsibilities of the MSG that can help ensure efficient MSG oversight of the EITI implementation process.
This note provides guidance on how to establish and manage an effective EITI MSG, and Annexe A provides key considerations for developing Terms of Reference (ToRs) that establish the scope, roles and responsibilities of the MSG.
Overview of steps
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How to implement Requirement 1.4
Step 1: Conduct outreach to stakeholders
In establishing the MSG, the government must ensure that the invitation to participate in the group is open and transparent (Requirement 1.4.a.i). In practice, the invitation to participate in the EITI process is often made in the early stages of preparing for implementation. It generally begins with the government announcing its intention to implement the EITI and inviting relevant industry and civil society stakeholders to participate in the process.
In some cases, an informal working group or interim MSG is formed to oversee the country’s EITI candidature process. This typically involves conducting outreach to stakeholders, establishing procedures for nominating MSG members, forming MSG constituencies and developing the MSG ToRs and work plan. Special attention should be given towards including women’s organisations, indigenous groups and historically marginalised groups throughout the process of establishing an MSG. Some countries have found it useful to commission stakeholder assessments, political economy studies, feasibility studies and legal reviews as part of the preparations for EITI candidature.
Mexico: Reaching out to stakeholders and forming an MSG
Mexico conducted a thorough outreach process by raising awareness and consulting stakeholders from government, industry and civil society. The process was supported by external organisations with expertise in civil society engagement and policy-making.
The MSG’s government constituency included representatives from key ministries who agreed to rotate leadership of the constituency. The industry constituency included the state-owned enterprise PEMEX, the hydrocarbon companies’ association AMEXHI and the mining companies’ association CAMIMEX. The civil society constituency was formed on the basis of a thorough selection process coordinated by a steering group composed of three leading organisations and facilitated by a third party, Colaboración Civica. The process included several preparatory meetings and open applications.
United States: Conducting outreach to establish an MSG
In establishing the EITI MSG in the United States, the US government, with the help of a neutral facilitator, conducted extensive public outreach to identify relevant stakeholders in the country and understand how to form a representative and inclusive MSG. The process involved public listening sessions in areas hosting extractive activities and companies, a webinar to engage stakeholders remotely, workshops and a public comment period.
Step 2: Nominate MSG members
The MSG must be comprised of appropriate stakeholders (Requirement 1.4.a.ii), including but not necessarily limited to:
- Relevant government entities, which can also include parliamentarians.
- Industry, including private companies and state-owned enterprises.
- Civil society, including independent civil society groups and other groups such as unions and media outlets.
All stakeholders should be adequately represented. The concept of adequacy may be relevant where there is significant diversity of geographical areas and commodities produced. However, constituencies do not necessarily need to be equally represented numerically. Some countries that have numerous and diverse extractive companies, government agencies involved in revenue collection, or civil society groups working on extractives governance have applied a weighting system to determine the number of representatives from each constituency. Where a country has many interested stakeholders, the MSG can include full members as well as alternate members to maximise inclusion while ensuring efficiency in decision-making.
Each stakeholder group must have the right to appoint its own representatives (Requirement 1.4.a.ii). In addition, the government is required to ensure that senior government officials are represented on the MSG. In many countries, civil society coalitions and companies select their own representatives to join the MSG, for example by caucus or through an industry association. Sometimes public notices are issued requesting nominees.
Gender representation
Government, industry and civil society constituencies all have a responsibility to consider adequate gender representation on the MSG in accordance with the EITI Standard. MSGs may wish to track gender composition of members and alternates on a regular basis to report on progress towards gender inclusion. MSGs could also identify and document the limitations in achieving gender balance and outline key steps needed to overcome them. The EITI’s guidance on gender provides further examples of how MSGs can improve gender representation in EITI implementation.
Diversity and inclusion in MSGs
Nigeria
To guarantee regional diversity, Nigeria’s NEITI Act 2007 Section 6(v) provides for the representation of geo-political zones and regions in the MSG. Of the 15 MSG members, six are selected from different political zones.
Armenia
In Armenia, the civil society constituency is composed of one representative from the scientific community, one from a regional civil society group and three from national civil society groups.
Ghana
Ghana’s MSG guarantees two seats for subnational representatives. In 2021, the MSG included members from the Ellembelle District, representing oil and gas communities, and the Tarkwa Nsuem Municipal Assembly, representing mining communities. The MSG has also considered including traditional authorities (chiefs) into its subnational representation.
Guinea
In 2021, the civil society constituency in Guinea amended its ToRs to include a formal requirement that a third of MSG representatives be women.
Step 3: Agree Terms of Reference for the MSG, including decision-making procedures
Consensual decision-making is a core element in multi-stakeholder processes, and the MSG should agree and specify procedures for decision-making in the ToRs (Requirement 1.4.b.vi). The ToRs should at a minimum include: provisions on the role, responsibilities and rights of the MSG (Requirement 1.4.b.i-iii); the approval of work plans, EITI Reports and annual progress reports (Requirement 1.4.b.iv-v); and internal governance rules and procedures (Requirement 1.4.b.vi- viii).
Collaboration and cooperation to reach general agreement among all MSG members on all decisions is a fundamental part of the EITI process. The EITI Standard requires an inclusive decision-making process throughout implementation with each constituency being treated as a partner (Requirement 1.4.b.vi). Experience with implementation shows that where decisions are taken without consensus, stakeholders could lose trust in the EITI process and implementation may be jeopardised.
In agreeing procedures for decision-making, the MSG may wish to specify voting rules. Where the MSG decides that voting rules are needed, it is recommended that resolutions are adopted by a qualified majorityHideIn general, a qualified majority is a majority in a vote that reaches a pre-set threshold value larger than 50% and, often, follows rules on a minimum of votes from each of the constituent parts of the decision body. A qualified majority is often required instead of a simple majority for reaching a decision on important matters. and include support from all the constituencies. This is essential to ensure inclusive decision-making, including in cases where stakeholders have unequal numerical representation on the MSG. The MSG is also advised to agree quorum rules.
See Annexe A for considerations and guidance on developing MSG ToRs.
Zambia: Establishing clear selection and decision-making processes
In 2019, Zambia’s Validation found that the invitation to participate in the MSG was open and transparent, stakeholders were being adequately represented and the MSG ToRs were being followed. The ToRs and the MSG selection process were clear and understood by the MSG members, and decision-making was conducted in an inclusive way that treated each constituency as a partner.
Madagascar: Establishing processes, roles and responsibilities for MSG constituencies
Established by presidential decree in 2017, Madagascar’s MSG ToRs include calls for applications to be part of the industry and civil society’s constituencies. The roles of the MSG and national secretariat are clearly defined, as are processes related to working groups and observers. Constituencies appoint leads who are mandated to mobilise each constituency position after broader consultations. The ToRs also explain key terms such as Independent Administrator, EITI Champion, EITI, EITI Report and Validation.
Philippines: Establishing principles of engagement
The PH-EITI ToRs outline the mission and detailed objectives for EITI implementation as well as the principles for engagement between government, business and civil society stakeholders. These include integrity, inclusivity, commitment to consult, capacity building and empowerment. They also define the roles of the MSG as a whole and by each constituency and link the MSG’s work to national priorities.
Ecuador: Establishing constituency autonomy and independence
Ecuador’s MSG ToRs establish that representatives of each constituency are to be autonomous and independent. They also define the role of the MSG and the members’ rights and responsibilities. The ToRs include the obligation to declare potential conflicts of interest, define the observers’ policy and the functioning of selected working groups to ensure efficient MSG work, and regulate the functioning of a national secretariat to support the MSG.
Step 4: Consider establishing a legal basis for the MSG
In establishing the MSG, the government must consider establishing a legal basis for the group (Requirement 1.4.a.iii). In some countries, the EITI operates without a statutory basis (e.g. where stakeholders agree a Memorandum of Understanding). In other cases, presidential decrees or amendments to existing regulations and/or legislation have been necessary. When signing up to the EITI, governments should consider whether a formal legal basis is needed. Undertaking a legal review might help to identify potential legal obstacles to EITI implementation and what kinds of legal instruments, if any, are necessary to support implementation.
Legal instruments for establishing MSGs
Several countries have used legal instruments to establish the EITI MSG. For example, the MSGs in Madagascar, Mauritania and Peru were created by presidential or ministerial decrees:
- Madagascar: Décret n° 2017-736 du 30 août 2017 portant institutionnalisation de l’Initiative pour la Transparence des Industries Extractives
- Mauritania: Décret n° 2009-231 portant création, organisation et fonctionnement du comité national de l’initiative sur la transparence des industries extractives
- Peru: Decreto Supremo que crea la Comisión Multisectotiral Permanente para el Seguimiento y Supervisión de la Transparencia en el empleo de lose recurso que obtiene el Estado por el desarrollo de la Industrias Extractivas Minera e Hidrocarburífera
MSGs in Liberia, Nigeria and Ukraine are established within a broader law that regulates EITI implementation:
- Liberia: LEITI Act (2009)
- Nigeria: NEITI Act (2007)
- Ukraine: Law 2545-VIII On ensuring transparency in extractive industries
Step 5: Consider establishing a national secretariat to support the MSG
In the majority of EITI implementing countries, the government establishes a national secretariat to support the MSG in carrying out the day-to-day activities related to EITI implementation. The national secretariat is often housed within the line ministry responsible for EITI implementation. The financial and human resources allocated to the activities of the national secretariat vary considerably across countries. In some cases, two or three staff members are sufficient to support implementation, while in other countries national secretariats include up to 50 staff.
The EITI has no requirements related to the establishment and operation of national secretariats, but in many countries the MSG has found it useful to specify the role and responsibilities of the national secretariat in the MSG ToRs. In the absence of a dedicated national secretariat, some MSGs are supported by staff from the host government agency or ministry which provide secretarial and coordination support.
Ecuador: Establishing the roles and responsibilities of the national secretariat
Ecuador’s ToRs provide for the establishment of a national secretariat and outline a clear division of functions and responsibilities between the MSG members, the MSG’s lead and the national secretariat. The national secretariat’s responsibilities include convening and documenting MSG meetings, submitting reports and studies for MSG approval, maintaining the national EITI website, coordinating and following up on the implementation of the EITI Ecuador work plan, coordinating a communications strategy and processing funding requests for EITI implementation.
Uganda: Leveraging the national secretariat for technical support
To support the MSG in developing and implementing a work plan that is aligned to national priorities and the EITI Standard, Uganda established a national secretariat with the requisite technical capacity. The Uganda national secretariat provides technical support and includes two economists, a governance specialist, a legal officer, a statistician and a communications officer. The MSG has established technical committees that work on various thematic issue
Absence of a national secretariat
As Mexico does not have an EITI national secretariat, the MSG is supported by staff in the government’s Secretary of Economy. In Cote d’Ivoire, the ToRs for the MSG establishes a “Technical Secretariat” but in practice this role is filled with officials from the host government agency. In Norway, staff in the Ministry of Petroleum coordinate EITI activities.
Mainstreaming multi-stakeholder consultation and oversight
In cases where EITI disclosures are systematically disclosed via government and company systems, implementing countries may consider opportunities for multi-stakeholder consultation and oversight using representative bodies outside of the EITI MSG. Using alternative and established channels for consultations and oversight (e.g. fora such as parliamentary committees and other public bodies that engage with extractives governance) can allow the MSG to transition from overseeing EITI reporting to holding wider discussions about governance reforms, embedding transparency and accountability mechanisms in government systems, and informing public debates and policy-making. For countries considering mainstreamed implementation, the role of the MSG is likely to evolve and vary from country to country. As more data is disclosed systematically, MSGs might consider undertaking more analysis and use of the data provided.
Integrating existing bodies into the consultation and oversight process of the EITI may be possible under certain conditions (see examples below). The approach should have the potential to increase stakeholder engagement and make strengthen constituencies’ participation. Such bodies must still maintain the same level of commitments, roles and responsibilities as set out in the EITI Standard.
A mainstreamed approach to MSG oversight would also require a request for adapted implementation. Where proposals for mainstreamed implementation do not retain conventional MSG oversight, care should be taken to ensure that the alternative processes for multi-stakeholder consultation and dialogue encompass:
- Opportunities for stakeholders to shape the scope and nature of extractives transparency;
- Opportunities for stakeholders to make recommendations for governance reform and be more involved in public policy processes;
- That all stakeholders have an opportunity to shape decisions, be heard and contribute.
Where these conditions are not met, adapted implementation requests to mainstream multi-stakeholder oversight will not be approved.
In addition to the above criteria, MSGs may also wish to consider stakeholders’ capacity to engage in extractives governance in their proposals for adapted implementation. Countries are encouraged to consider whether other institutions, bodies or mechanisms could be engaged in the multi-stakeholder approach.
Regular disclosure of extractive industry data is of little practical use without public understanding of what the figures mean and debate about how natural resource revenues can be used effectively. Relevant stakeholders should be engaged in dialogue about EITI data and findings emerging from EITI implementation. Countries could consider alternatives ways of using existing bodies, fora or channels at both national and subnational levels to spur debate and analysis of EITI data.
Opportunities to use existing bodies for consultation and dissemination of EITI data and findings
In Kazakhstan, there have been discussions about delegating the MSG’s responsibilities of disseminating and promoting use of data to public councils, which are comprised of government and civil society representatives and established by law at the regional and local levels. Although these councils do not adopt a multi-stakeholder approach, local stakeholders appear to consider them appropriate for the purpose of discussion and debate about EITI data.
In Mexico, the hydrocarbon licensing and regulatory body CNH (Comisión Nacional de Hidrocarburos) established a consultative body with external members to advise on the commission on licensing, contracting and monitoring of contract obligations by operators.
In various Latin American countries, the national Open Government Partnership (OGP) bodies are addressing governance and accountability issues in areas interlinked with the EITI. In Mexico, OGP commitments related to beneficial ownership are monitored by stakeholders also active in EITI work. In Honduras, the Ministry of Transparency and EITI Champion and civil society organisations engaged in the MSG are also involved in other initiatives like OGP and the Infrastructure Transparency Initiative (CoST).
In Norway, stakeholders agreed that various industry and civil society fora, conferences, parliamentary hearings and debates are better avenues for stakeholder input on natural resource governance than a designated EITI MSG. Norway’s request for adapted implementation, that does not include a designated EITI MSG, was approved by the EITI Board.
In the Philippines, provincial multi-stakeholder bodies are tasked to oversee the governance of the mining sector. These bodies are consulted and participate in the EITI’s dissemination activities at the subnational level.
In Timor-Leste, a multi-stakeholder consultative council advises parliament on the management of the Petroleum Fund. The council is comprised of representatives from government, industry, civil society and parliament. It has a statutory role in overseeing and advising on the policies and practices regarding the management of the revenue from oil and gas, and could constitute an alternative platform for future EITI-related dialogue.
Flexible reporting
The COVID-19 pandemic has posed new challenges for most EITI implementing countries, such as limitations on convening in-person meetings and disseminating information. In recognition of these challenges, the EITI Board agreed several measures to provide flexibility in EITI implementation and reporting, including guidance on convening MSGs.
In cases where MSGs are unable to convene meetings due to unexpected crises such as the COVID-19 pandemic, the EITI Board will take this into account during Validation when assessing whether the MSG approved key decisions relating to the EITI process. However, MSG chairs must demonstrate that they have taken “reasonable steps” to continue MSG activities, which could include:
- Circulating documents with sufficient notice prior to meetings or conference calls;
- Reaching out to MSG members by phone or online;
- Providing sufficient time for MSG members to provide input to draft documents;
- Requesting confirmation from MSG members from each constituency to approve decisions.
The approach approved by the Board on flexible reporting will be effective until the end of 2022. This allows countries to learn from lessons from implementing the EITI Standard through innovative ways during this time. Some early lessons have highlighted the increased engagement of MSGs in ensuring data is timely disclosed and disseminated. This, in turn, has improved the MSG oversight of the implementation of the EITI.
Argentina: Adopting a flexible approach to reporting
EITI-Argentina adopted a flexible approach for its 2018 EITI Report. The MSG was directly responsible for the oversight of data collection, drafting and preparing the report, with assistance from an external consultant who fulfilled a limited number of functions normally assigned to the Independent Administrator. The MSG’s approach combined systematic disclosure and the collection and publication of missing data points in a shorter report. This was supplemented with information on how COVID-19 impacted the extractive industries in 2020. The adoption of the flexible approach provided an opportunity to the MSG to be more directly involved in the EITI implementation beyond its oversight mandate.
Zambia: Adopting a flexible approach to reporting
Zambia EITI adopted a flexible approach for its 2019 EITI Report, which includes a risk-based approach to reconciliation and the impacts of COVID-19. The MSG administered a questionnaire to assess the government relief measures for companies. In preparation for the 2020 EITI Report, the MSG decided to be more involved in the production of the report, without the support of an external Independent Administrator. This has given the MSG an opportunity to strengthen its oversight and scrutiny of EITI disclosures.
