The new EITI Rules (2011 Edition)

Background New edition of the EITI Rules agreed on 16 February 2011 Follows extensive consultation process, incorporating lessons from 20+ validations Secretariat has set out a timetable of training and capacity prioritisation to support countries through the transition.

Major changes 1.Requirements (not indicators) 2.MSG in sign-up 3.Time limit on candidature 4.Regular & timely reporting 5.Participation of civil society 6.Defining materiality 7.Reports based on audited accounts to international standards 8.Reporting requirements 9.Requirements for Compliant countries

EITI Requirements The EITI principles and criteria have not been modified A new chapter on EITI requirements that implementing countries have to meet in order to become EITI Compliant. The Validation Guide has also been revised, including standard terms of reference for validators

5 sign-up requirements 1.Government commitment to implement EITI 2.Commitment to work with industry and CSOs 3.A senior individual to lead implementation 4.Formation of a multi- stakeholder group (MSG) 5.MSG approved EITI workplan

Time limit on candidature Candidate status is for a finite period. Candidate countries have 18 months to publish an EITI report and two and a half years to submit a final validation report Candidacy may be extended for an additional 12 months. If a second validation does not verify compliance at the end of this period, the country will be delisted.

Regular & timely reporting Candidates required to produce their first EITI report within 18 months. Thereafter, EITI reports annually, covering data no older than the second to last complete accounting period. Countries that have not produced a report for more than two years may be suspended and delisted

Civil society participation Requirements 2, 4, 5 and 6 have been strengthened A new EITI Policy Note (#6) emphasizes “the free, full, independent, active and effective participation of civil society in EITI implementation”.

Defining materiality Requirement 9 clarifies the MSG’s mandate to agree a definition and incorporate it into the reporting templates. This includes requirements relating to in-kind payments, infrastructure provision or other barter-type arrangements.

Reports based on audited accounts to international standards It is a requirement that company and government reports are based on accounts audited to international standards Where this is not feasible, the MSG should agree a detailed approach to meet this objective over time. The rules provide more detailed guidance to MSGs.

Reporting requirements EITI reports must: Clearly define materiality List the revenue streams covered List which companies participated Note if any companies or government entities failed to participate Describe work to ensure disclosures are based on audited accounts to international standards; Describe the methodology adopted by the MSG and reconciler to identify and if necessary address discrepancies

Requirements for Compliant countries A new requirement that sets out the conditions for retaining Compliant status. Compliant countries are required to publish a report annually on the previous year’s activities, detailing progress in implementing the EITI and any recommendations from the validator.

Transition to the 2011 EITI Rules

Principles Implementing countries will need time to adjust as there are EITI reports, Validations and secretariat reviews underway based on the current version of the rules Ensure that the rules are at all times clear, predictable and do not impose significant additional obligations

Country Groups Reflects progress with EITI Reporting and Validation GroupStatusCountries 1 Compliant Azerbaijan, Liberia, Timor-Leste, Ghana, Mongolia, Kyrgyzstan, Niger, Nigeria, Central African Republic, Norway, Yemen 2 Candidate “close to compliant” Cameroon, Gabon, DR Congo, Kazakhstan, Mali, Mauritania, Peru 3 Candidate “meaningful progress” Congo, Sierra Leone 4 Candidate Validation deadlines in 2011 Madagascar, Tanzania, Albania, Burkina Faso, Mozambique, Zambia 5 Candidate Validation deadlines in 2012/13 Afghanistan, Iraq, Chad, Indonesia, Togo, Guatemala, Trinidad and Tobago, Guinea 6 Others Côte d'Ivoire

Group 1 - Compliant Azerbaijan, Liberia, Timor-Leste, Ghana, Mongolia, Kyrgyzstan, Niger, Nigeria, Central African Republic, Norway, Yemen Validation deadline – no change Complete EITI reporting in progress under the current rules. Next reporting cycle under the new rules. Must meet requirement 5(e) ‘regular and timely reporting’ by 31 December 2012 Must publish an annual report by 1 July 2012

Group 2 – Candidate, close to Compliant Cameroon, Gabon, DR Congo, Kazakhstan, Mali, Mauritania, Peru No change to the deadline to request a secretariat review Secretariat review will be conducted in accordance with the previous edition of the EITI Rules  If Compliant, treated as per Group 1  If not Compliant, candidacy renewed for 18 months. New validation required. Failure to achieve compliance within this period will result in delisting. Must meet requirement 5(e) ‘regular and timely reporting’ by 31 December 2012 or end of candidacy period (whichever is later).

Group 3 – Candidate, “meaningful progress” Congo, Sierra Leone Both have submitted applications to renew candidacy. The VC considers them satisfactory Candidacy extended for 18 months from date of Board decision, and required to undertake a new validation.  Failure to achieve compliance within this period will result in delisting. Must meet requirement 5(e) ‘regular and timely reporting’ by 31 December 2012 or end of candidacy period (whichever is later).

Group 4 – Candidate, Validation deadline in 2011 Madagascar, Tanzania, Albania, Burkina Faso, Mozambique, Zambia Deadlines for Albania, Burkina Faso, Mozambique and Zambia extended by 6 months Validations conducted in accordance with the previous edition of the EITI Rules.  If Compliant, treated as per Group 1  If meaning progress (not Compliant), candidacy renewed for 18 months. New validation required. Failure to achieve compliance within this period will result in delisting.  May request validation waiver. If requested in 2011 and granted, the secretariat review will be conducted in accordance with the old rules Must meet requirement 5(e) ‘regular and timely reporting’ by 31 December 2012 or end of candidacy period (whichever is later).

Group 5 – Candidate, Validation deadline in 2012/13 Afghanistan, Iraq, Chad, Indonesia, Togo, Guatemala, Trinidad and Tobago, Guinea Deadlines extended by 6 months Validations to be conducted in accordance with the new EITI Rules.  If Compliant, treated as per Group 1  If meaning progress (not Compliant), candidacy renewed for 18 months. New validation required (can request waiver). Failure to achieve compliance within this period will result in delisting. Must meet requirement 5(e) ‘regular and timely reporting’ by 31 December 2012 or end of candidacy period (whichever is later).

Group 6 – Others Côte d'Ivoire Submitted a final validation report in December It has not been possible to process that report. Secretariat drafting an option paper, likely to recommend that the Board agrees transitional arrangements that are consistent with Group 4, possibly with modifications that reflect the challenging political circumstances.

Group 6 – Others Côte d'Ivoire Submitted a final validation report in December It has not been possible to process that report. Secretariat drafting an option paper, likely to recommend that the Board agrees transitional arrangements that are consistent with Group 4, possibly with modifications that reflect the challenging political circumstances.

More information Download the Rules (English / Russian): RWI Factsheet: “The 2011 EITI Rules: A Guide to Civil Society” (English / Russian) eiti-rules-guide-civil-society